Mersana Therapeutics(MRSN) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company ended the second quarter of 2025 with $77 million in cash and cash equivalents, with a net cash used in operating activities of $22.6 million, which included $2.4 million in severance payments [14] - Collaboration revenue for 2025 was $3.1 million, an increase from $2.3 million in the same period in 2024, primarily due to increased revenue from collaborations with J&J and Merck KGAA [15] - Research and development expenses for 2025 were $16.2 million, down from $17.2 million in 2024, attributed to lower headcount and related compensation costs [16] - General and administrative expenses decreased to $7.4 million from $10.5 million in 2024, mainly due to lower headcount and reduced consulting fees [17] - The net loss for the second quarter of both 2025 and 2024 was $24.3 million [18] Business Line Data and Key Metrics Changes - The company reported strong enrollment progress in the EMILY phase one trial, particularly in expansion cohorts targeting triple negative breast cancer (TNBC) [4][10] - Among evaluable patients with high B7-H4 tumor expression, the confirmed objective response rate (ORR) was 31% [5] - In patients with adenoid cystic carcinoma type one (ACC1), the ORR was 56% [6] Market Data and Key Metrics Changes - The market for topo one ADCs in TNBC is expected to grow significantly, with Trodelvy projected to generate about $1 billion in global revenues in 2025 [11] - The company believes the post-topo one TNBC opportunity is sizable and could expand as more agents move into earlier lines of therapy [11] Company Strategy and Development Direction - The company is focusing on addressing unmet needs in TNBC, particularly for patients previously treated with topo one ADCs [6][12] - The company is exploring the potential of EMILY as a second-line therapy for patients who have received prior topo one ADCs [12] - The company is also developing XMT-2056, an Immunosynthen ADC targeting HER2, with GSK holding an exclusive global license option [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing clinical trials and the potential for EMILY to meet significant unmet needs in the TNBC market [10][12] - The management highlighted the importance of the evolving treatment landscape and the potential for EMILY to address the needs of topo-experienced patients if approved [11] Other Important Information - The company incurred $3.9 million in restructuring charges primarily related to severance and benefit payments [17] - The company expects its capital resources to support its operating plan commitments into mid-2026 [14] Q&A Session Summary Question: Expectations for upcoming data in the second half - Management indicated that the data will be based on over 45 enrolled patients, with both dose A and B included, but cautioned about committing to an exact number due to treatment and scan requirements [21][22] Question: Good benchmark for efficacy - Management stated that a response rate in the 20s and a median PFS of 16 weeks would be a good benchmark, considering the standard of care has a 5% response rate and 6-7 weeks PFS [23] Question: Implementation of proteinuria mitigation strategies - Management confirmed that Amendment five was implemented to minimize proteinuria development, allowing patients to continue treatment despite isolated albuminuria [28] Question: Enrollment progress and potential next steps - Management reported that enrollment is going well, with no need for additional sites for the expansion, and they are focused on TNBC for the pivotal study [50][67] Question: Milestone payment details - The $15 million milestone payment is development-based, but further details remain confidential [58]