Mersana targets reporting initial Emi-Le expansion data in H2 2025 while achieving $15M GSK milestone

Earnings Call Insights: Mersana Therapeutics (MRSN) Q2 2025

MANAGEMENT VIEW

* Martin H. Huber, President, CEO & Director, opened by highlighting the progress on Emi-Le, the company's Dolasynthen ADC targeting B7-H4, emphasizing oral presentations at ASCO 2025 and ESMO Breast Cancer 2025 and strong enrollment in expansion cohorts. He stated, "At ASCO in Chicago, Dr. Erika Hamilton...presented data as of March 8 data cutoff across all patients...Safety and tolerability remained consistent with previously reported data."
* Huber detailed that, among 9 evaluable patients with ACC1 who received any dose of Emi-Le, 4 confirmed responses and one unconfirmed objective response were observed, resulting in a 56% objective response rate in ACC1 after the unconfirmed response was later confirmed.
* Huber pointed to the focus on triple-negative breast cancer (TNBC) patients previously treated with a topo-1 ADC, noting that the standard of care for these patients showed a 5% objective response rate, a progression-free survival (PFS) of 1.7 months, and an overall survival (OS) of 6.7 months. Among B7-H4 high TNBC patients who received an intermediate dose of Emi-Le, the objective response rate was 29%, median PFS was 16 weeks, and median OS was not reached as of the data cutoff.
* Huber confirmed progress in enrolling more than 45 patients across two Emi-Le dosing regimens and stated, "We remain on track to report initial clinical data from expansion in the second half of 2025."
* The CEO also discussed the market opportunity, referencing current and potential future size, and highlighted the potential for Emi-Le as a non-topo-1 agent in the evolving TNBC treatment landscape, citing, "Trodelvy is already expected to generate about $1 billion in global TNBC revenues in 2025."
* On XMT-2056, Mersana's Immunosynthen ADC targeting HER2, Huber announced, "In July, we achieved a $15 million development milestone under our agreement with GSK."
* Brian C. DeSchuytner, Senior VP, CFO & COO, reported, "We ended the second quarter of 2025 with $77 million in cash and cash equivalents. Net cash used in operating activities for the second quarter of 2025 was $22.6 million, which included $2.4 million in severance-related payments."
* DeSchuytner added, "We continue to expect that our capital resources will enable us to support our current operating plan commitments into mid-2026."

OUTLOOK

* Management reiterated that initial clinical data from the Emi-Le expansion cohorts is expected in the second half of 2025, with over 45 patients enrolled across two dosing cohorts.
* The capital resources are projected to support the current operating plan commitments into mid-2026, with no assumptions for additional milestone payments or collaboration proceeds.
* The company noted the evolving treatment landscape in TNBC and the potential for Emi-Le to address a growing post-topo-1 patient population if approved.

FINANCIAL RESULTS

* Mersana reported $77 million in cash and cash equivalents at the end of Q2 2025.
* Net cash used in operating activities for Q2 2025 was $22.6 million, which included $2.4 million in severance-related payments.
* In July, approximately $17.9 million was used to pay off the debt facility.
* Collaboration revenue for Q2 2025 was $3.1 million compared to $2.3 million for the same period in 2024, reflecting higher revenue from J&J and Merck KGaA collaborations, partially offset by reduced revenue from GSK.
* Research and development expenses were $16.2 million for Q2 2025, with $900,000 related to noncash stock-based compensation.
* General and administrative expenses for Q2 2025 declined to $7.4 million, with $1.1 million in noncash stock-based compensation.
* Restructuring charges of $3.9 million were incurred in the quarter.
* Net loss for the second quarter of 2025 was $24.3 million.

Q&A

* Tara Bancroft, TD Cowen, asked about expectations for the upcoming data and patient inclusion. Martin H. Huber responded that over 45 patients had been enrolled, with both dose A and B cohorts included, but the duration of follow-up would be longer for dose A. He added, "We would generally expect that about 40% to 50% of them will be in the B7-H4 high bucket."
* Bancroft pressed for efficacy benchmarks. Huber responded, "The efficacy for the standard of care in this setting is a 5% response rate and a 6- to 7-week PFS...if you have the 16 weeks and you have a response rate in the 20s, we believe that you would beat the standard of care."
* An unidentified analyst for Jonathan Chang, Leerink, asked about proteinuria mitigation. Huber explained Amendment 5, stating that ACE inhibitors or ARBs are started at treatment initiation to minimize proteinuria and that the amendment allows continued treatment despite isolated albuminuria.
* Charles Zhu, LifeSci Capital, asked about the B7-H4 high/low cutoff and clinical trade-offs between doses. Huber said the expansion data would help finalize the TPS cutoff and emphasized a data-driven approach to dose selection.
* Michael Schmidt, Guggenheim, inquired about patient distribution across cohorts and plans for Phase III. Huber answered that both cohorts have a reasonable number of patients, with shorter follow-up for dose B, and discussed the rationale for focusing on post-topo patients, referencing Fast Track designation and potential for broader enrollment.
* Additional questions centered on enrollment rates, milestone payments, and potential expansion into other indications, with management expressing satisfaction with progress and reiterating a breast cancer–focused approach for now.

SENTIMENT ANALYSIS

* Analysts appeared neutral to slightly positive, with questions focused on trial design, efficacy benchmarks, and operational progress, and no overt skepticism or negative tone in the discussion.
* Management maintained a confident and data-driven tone during the call, especially when discussing trial progress and milestones. Phrases like "we are confident" and "we believe" were used to project assurance regarding the company's approach and expectations for upcoming data, consistent with the previous quarter.
* Compared to the previous quarter, sentiment remained steady, with management continuing to address questions directly and analysts remaining focused on operational execution and trial benchmarks.

QUARTER-OVER-QUARTER COMPARISON

* The company maintained its guidance for reporting initial clinical data from the Emi-Le expansion in the second half of 2025, consistent with the prior quarter.
* Strategic focus remains centered on TNBC and breast cancer, with no new expansion into other tumor types, reflecting continued discipline following the Q1 restructuring.
* Key metrics such as cash runway, patient enrollment progress, and trial timelines remained stable; however, cash and cash equivalents decreased from $102.3 million in Q1 to $77 million in Q2, reflecting operational outflows and debt repayment.
* Analyst questions in both quarters centered on clinical data expectations, dose selection rationale, and operational milestones, with tone and sentiment largely unchanged.
* Management’s confidence in upcoming data and operational execution was consistent, with continued emphasis on the potential for Emi-Le in the evolving TNBC treatment landscape.

RISKS AND CONCERNS

* Proteinuria remains a clinical management focus, with mitigation strategies implemented through protocol Amendment 5. Huber explained that ongoing data will determine the effectiveness of these strategies, especially at higher doses.
* Enrollment and data follow-up duration could impact the size and maturity of the data set for the upcoming release, as management cautioned about variability in patient numbers and follow-up times.
* The company’s cash runway is supported through mid-2026 but is contingent on no additional milestone payments or collaboration proceeds not yet realized.
* Restructuring charges and a reduction in headcount were noted as part of ongoing cost control and operational prioritization.

FINAL TAKEAWAY

Mersana Therapeutics underscored progress in advancing the Emi-Le program for post-topo-1 TNBC, with over 45 patients enrolled in two dose expansion cohorts and initial clinical data on track for release in the second half of 2025. The company achieved a $15 million milestone for XMT-2056 with GSK, reported a $77 million cash position, and reaffirmed its cash runway into mid-2026. Focused execution and clinical data milestones remain central as the company positions Emi-Le for potential regulatory and commercial opportunities in a growing TNBC treatment landscape.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/mrsn/earnings/transcripts]

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