On February 28, 2023 Merus N.V. (Nasdaq: MRUS) (Merus, the Company, we, or our), a clinical-stage oncology company developing innovative, full-length multispecific antibodies (Biclonics and Triclonics), reported financial results for the fourth quarter and full year and provided a business update (Press release, Merus, FEB 28, 2023, View Source [SID1234627904]).
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"We are making significant progress across our clinical pipeline of important and potentially clinically meaningful new cancer therapeutic candidates, all from our own Biclonics antibody technologies," said Bill Lundberg, M.D., President, Chief Executive Officer of Merus. "With continued enrollment to support a potential Zeno BLA submission in NRG1+ cancer, a clinical update on petosemtamab in the first half of the year and a planned MCLA-129 clinical update in the second half, 2023 promises to be a transformative year for Merus, as we strive to bring novel and highly innovative medicines to patients."
Zenocutuzumab (Zeno or MCLA-128: HER2 x HER3 Biclonics): NRG1+ cancer and other solid tumors
Enrollment continues in the eNRGy trial of Zeno monotherapy in NRG1+ cancer; and a phase 2 trial of Zeno in combination with androgen deprivation therapy (ADT) in castration resistant prostate cancer (CRPC), and in combination with afatinib in NRG1+ non-small cell lung cancer (NSCLC)
In October 2022, Merus met with the U.S. Food and Drug Administration (FDA) regarding a potential Biologics License Application (BLA) filing for Zeno in NRG1+ cancer. Based on the FDA feedback, Merus believes multiple registrational paths remain viable, and has decided the optimal approach is to sequence its development plan by first seeking a potential application for NRG1+ lung and/or pancreatic cancer, which could then be followed by a potential tissue agnostic filing. The Company believes Zeno has the potential to be both first in class and best in class, and a new standard of care for the treatment of NRG1+ cancer.
As of year end 2022, over 150 patients with NRG1+ cancer have been treated with Zeno monotherapy in our eNRGy trial and Early Access Program (EAP). Merus plans to provide an update on the potential registrational path and timeline in NRG1+ cancer in the first half of 2023 and a clinical update on Zeno in NRG1+ cancer at a major medical conference in 2023.
Further, Merus is evaluating Zeno in combination with an ADT (enzalutamide or abiraterone) in men with CRPC, irrespective of NRG1+ status. Merus plans to provide initial clinical data on Zeno in CRPC in the second half of 2023.
Merus is also evaluating Zeno in combination with afatinib in patients with NRG1+ NSCLC.
Petosemtamab (MCLA-158: EGFR x LGR5 Biclonics): Solid Tumors
Enrollment continues in dose expansion in the phase 1 trial; clinical update planned for 1H23
Petosemtamab is in clinical development in the expansion part of a phase 1 open-label, multicenter trial in advanced solid tumors, including previously treated head and neck squamous cell carcinoma (HNSCC). Merus previously reported early interim clinical data on petosemtamab in patients with advanced HNSCC at the AACR (Free AACR Whitepaper)-NCI-EORTC Virtual AACR-NCI-EORTC (Free AACR-NCI-EORTC Whitepaper) International Conference on Molecular Targets and Cancer Therapeutics (EORTC-NCI-AACR) (Free ASGCT Whitepaper) (Free EORTC-NCI-AACR Whitepaper) in October 2021. Among 10 patients, seven patients were evaluable for efficacy analysis by investigator assessment. Three of seven patients were observed to achieve a partial response, with one of these three observed to achieve complete response after the data cutoff date. Tumor reduction was observed in the target lesions of all seven patients.
Merus plans to provide a clinical update on petosemtamab in the first half of 2023 at a medical conference. The planned update will include data from approximately 40 patients with HNSCC with meaningful clinical follow up, and data from patients with gastro-esophageal cancer, to inform clinical development strategy.
Merus further plans to provide a regulatory path update on petosemtamab in the first half of 2023.
MCLA-129 (EGFR x c-MET Biclonics): Solid Tumors
Enrollment continues in the expansion cohorts in the phase 1/2 trial; clinical update planned for 2H23
MCLA-129 is in clinical development in a phase 1/2, open-label clinical trial evaluating MCLA-129 monotherapy in patients with EGFRex20 NSCLC, MetEx14 NSCLC, and in HNSCC, as well as MCLA-129 in combination with Tagrisso (osimertinib), a third generation EGFR TKI, in patients with treatment-naïve EGFR mutant (m) NSCLC and in patients with EGFRm NSCLC that have progressed on Tagrisso.
In October 2022, Merus presented initial clinical data on MCLA-129 at the 34th EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) AACR-NCI-EORTC (Free AACR-NCI-EORTC Whitepaper) International Conference on Molecular Targets and Cancer Therapeutics (EORTC-NCI-AACR) (Free ASGCT Whitepaper) (Free EORTC-NCI-AACR Whitepaper). Twenty patients were treated across dose levels of 100 mg-1500 mg. As of an August 15, 2022 data cutoff date, in early interim data, 18 evaluable patients were observed to have clinical activity at a variety of dose levels with two confirmed partial responses and four additional patients with >20% target lesion tumor shrinkage based on investigator review. From this interim data, MCLA-129 was observed to be well tolerated with no dose limiting toxicities.
Merus plans to provide an initial clinical data update from the expansion cohorts, and a further clinical development strategy update in the second half of 2023.
MCLA-129 is subject to a collaboration and license agreement with Betta Pharmaceuticals Co. Ltd. (Betta), which permits Betta to develop MCLA-129 and potentially commercialize exclusively in China, while Merus retains global rights outside of China.
MCLA-145 (CD137 x PD-L1 Biclonics): Solid Tumors
Enrollment continues in the phase 1 trial including in combination with Keytruda (pembrolizumab), a PD-1 inhibitor
MCLA-145 is in clinical development in a global, phase 1, open-label, clinical trial evaluating MCLA-145 in patients with solid tumors. The trial consists of a dose escalation phase, followed by a planned dose expansion phase. Merus is also evaluating the combination of MCLA-145 with Keytruda, with enrollment ongoing.
Collaborations
Incyte Corporation
Since 2017, Merus has been working together with Incyte Corporation (Incyte) under a global collaboration and license agreement focused on the research, discovery and development of bispecific antibodies utilizing Merus’ proprietary Biclonics technology platform. The agreement grants Incyte certain exclusive rights for up to ten bispecific and monospecific antibody programs. The collaboration is progressing, with multiple programs in various stages of preclinical development. Further, Incyte announced, in 2023, that INCA32459, a novel Lag3xPD-1 bispecific antibody developed through the collaboration is currently being evaluated in clinical studies. In January 2023, Merus achieved a milestone payment of $2.5 million related to this program. For each program under the collaboration, Merus receives reimbursement for research activities and is eligible to receive potential development, regulatory and commercial milestones and sales royalties for any products, if approved.
Loxo Oncology at Lilly
In January 2021, Merus and Loxo Oncology at Lilly, a research and development group of Eli Lilly and Company (Lilly), announced a research collaboration and exclusive license agreement to develop up to three CD3-engaging T-cell re-directing bispecific antibody therapies utilizing Merus’ Biclonics platform and proprietary CD3 panel along with the scientific and rational drug design expertise of Loxo Oncology at Lilly. The collaboration is progressing with multiple active research programs underway.
Ono Pharmaceutical
In March 2018, the Company granted Ono Pharmaceutical Co., Ltd. (Ono) an exclusive, worldwide, royalty-bearing license, with the right to sublicense, research, test, make, use and market a limited number of bispecific antibody candidates based on Merus’ Biclonics technology platform directed to a particular undisclosed target combination. In the fourth quarter of 2022, Merus achieved a milestone payment of €1.0 million from Ono for preclinical advancement of a lead candidate arising from this license.
Corporate Update
In January 2023, Merus announced the promotion of Peter B. Silverman as Chief Operating Officer. Mr. Silverman adds this title to his role as Executive Vice President, General Counsel. Mr. Silverman is an accomplished healthcare leader, with demonstrated success in progressing Merus across multiple business functions during his tenure at the company. Since Mr. Silverman joined Merus in 2017, he has made significant contributions to enhance the company’s platform technology and intellectual property portfolio, advance our strategic collaborations, and has overseen the company’s general and administrative functions, which have been instrumental in fostering the company’s growth. We congratulate him on his well-deserved promotion and believe it will strengthen the organizational structure that will allow us to better maximize the exciting opportunities that lie ahead.
Cash Runway, existing cash, cash equivalents and marketable securities expected to fund Merus’ operations into second half 2025
As of December 31, 2022, Merus had $326.7 million cash, cash equivalents and marketable securities. Based on the Company’s current operating plan, the existing cash, cash equivalents and marketable securities are expected to fund Merus’ operations into second half 2025.
Full Year 2022 Financial Results
Collaboration revenue for the year ended December 31, 2022 decreased $7.5 million as compared to the year ended December 31, 2021, primarily as a result of decreases in Lilly revenue of $3.4 million and Incyte revenue of $3.2 million. The decrease in Lilly revenue was primarily due to a decrease in upfront payment amortization of $3.7 million, partially offset by an increase in reimbursement revenue of $0.3 million.
Research and development expense for the year ended December 31, 2022 increased $51.2 million as compared to the year ended December 31, 2021, primarily as a result of increases in external clinical services and drug manufacturing costs, including costs to fulfill our obligations under our collaboration agreements, related to our programs of $34.3 million, personnel related expenses including stock-based compensation of $11.3 million due to an increase in employee headcount, facilities cost of $2.6 million, and consultancy costs of $2.0 million.
General and administrative expense for the year ended December 31, 2022 increased $11.3 million as compared to the year ended December 31, 2021, primarily as a result increases in stock-based compensation of $4.0 million, consultancy costs of $3.6 million, and personnel related costs of $2.3 million.
Other income, net consists of interest earned on our cash and cash equivalents held on account, accretion of investment earnings and net foreign exchange gains or losses on our foreign denominated cash, cash equivalents and marketable securities, and payables and receivables.
MERUS N.V.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except per share data)
2022 2021
ASSETS
Current assets:
Cash and cash equivalents $ 147,749 $ 241,435
Marketable securities 142,480 168,990
Accounts receivable 4,051 1,697
Accounts receivable (related party) — 4,609
Prepaid expenses and other current assets 12,163 7,448
Total current assets 306,443 424,179
Marketable securities 36,457 20,297
Property and equipment, net 12,222 3,549
Operating lease right-of-use assets 12,618 3,733
Intangible assets, net 1,950 2,347
Deferred tax assets 2,041 417
Other assets 4,811 2,078
Total assets $ 376,542 $ 456,600
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 9,834 $ 13,237
Accrued expenses and other liabilities 35,590 22,506
Income taxes payable 2,400 —
Current portion of lease obligation 1,684 1,494
Current portion of deferred revenue 29,418 16,613
Current portion of deferred revenue (related party) — 18,048
Total current liabilities 78,926 71,898
Lease obligation 11,790 2,257
Deferred revenue, net of current portion 38,771 10,962
Deferred revenue, net of current portion (related party) — 55,282
Total liabilities 129,487 140,399
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common shares, €0.09 par value; 67,500,000 and 67,500,000 shares authorized as at December 31, 2022 and 2021, respectively; 46,310,589 and 43,467,052 shares issued and outstanding as at December 31, 2022 and 2021, respectively 4,751 4,481
Additional paid-in capital 870,874 787,869
Accumulated deficit (598,122 ) (466,928 )
Accumulated other comprehensive (loss) income (30,448 ) (9,221 )
Total stockholders’ equity 247,055 316,201
Total liabilities and stockholders’ equity $ 376,542 $ 456,600
MERUS N.V.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Amounts in thousands except per share data)
Year Ended December 31,
2022 2021 2020
Collaboration revenue $ 41,586 $ 19,503 $ 3,363
Collaboration revenue (related party) — 29,604 26,580
Grant revenue — — —
Total revenue 41,586 49,107 29,943
Operating expenses:
Research and development 149,424 98,187 70,040
General and administrative 52,200 40,896 35,781
Total operating expenses 201,624 139,083 105,821
Operating loss (160,038 ) (89,976 ) (75,878 )
Other income (loss), net:
Interest (expense) income, net 2,722 (129 ) 300
Foreign exchange (losses) gains, net 26,022 24,663 (9,432 )
Other (losses) gains, net 1,059 (1,135 ) —
Total other income (loss), net 29,803 23,399 (9,132 )
Loss before income tax expense (130,235 ) (66,577 ) (85,010 )
Income tax expense 959 239 503
Net loss $ (131,194 ) $ (66,816 ) $ (85,513 )
Other comprehensive income (loss):
Currency translation adjustment (21,227 ) (18,292 ) 7,485
Comprehensive loss $ (152,421 ) $ (85,108 ) $ (78,028 )
Net loss per share allocable to common stockholders:
Basic and diluted $ (2.92 ) $ (1.73 ) $ (2.92 )
Weighted-average common shares outstanding:
Basic and diluted 44,919,084 38,638,434 29,256,203