Merus 2025 Q1 Earnings Revenue Surges 236% Despite Widening Losses

Merus (MRUS) reported its fiscal 2025 Q1 earnings on May 07th, 2025. The company saw a significant increase in revenue but faced widening losses. While the revenue surged by 236% to $26.49 million, the net loss expanded to $96.47 million. This performance was below market expectations. Merus maintained its operational guidance, projecting its current cash reserves to sustain operations into 2028, despite increasing expenses. The company continues to advance its clinical trials, with expectations to enroll substantially by the end of 2025.

Revenue
Merus saw a significant increase in revenue, reaching $26.49 million in Q1 2025, up from $7.89 million in the same quarter last year. This impressive growth was driven primarily by commercial material revenue and higher collaboration revenue, reflecting the company's strategic advancements and partnerships.

Earnings/Net Income
Merus reported a net loss of $96.47 million for Q1 2025, significantly higher than the $34.46 million loss in Q1 2024. The company's EPS fell to a loss of $1.40 per share, indicating worsening financial performance.

Price Action
The stock price of Merus edged down by 0.83% during the most recent trading day, fell 13.36% over the full trading week, but gained 3.46% for the month-to-date.

Post-Earnings Price Action Review
In the past five years, investing in Merus (MRUS) shares after a revenue drop quarter-over-quarter has provided a return of 2.48% over 30 days, underperforming the benchmark by 81.61%. This strategy displayed a low Sharpe ratio of 0.04, reflecting poor risk-adjusted returns, with a maximum drawdown of -15.51% and volatility at 10.95%. The compounded annual growth rate (CAGR) stood at 0.49%, showcasing the strategy's limited success relative to broader market performance.

CEO Commentary
"We are very much looking forward to sharing the robust updated interim phase 2 data, on the entire 45 patient data set at 2025 ASCO®. We believe based on these interim data that petosemtamab continues to demonstrate substantial clinical activity superior to historical controls based on the magnitude and consistency of efficacy across ORR, PFS and OS in the overall population and within important subgroups of HPV disease and PD-L1 expression levels," said Bill Lundberg, M.D., President, Chief Executive Officer of Merus. "Additionally, I’m thrilled by the team’s execution in our two phase 3 trials and expect both trials to be substantially enrolled by year end 2025."

Guidance
Based on the Company’s current operating plan, existing cash, cash equivalents, and marketable securities are expected to fund Merus’ operations into 2028. The Company anticipates providing initial clinical data for petosemtamab in mCRC in the second half of 2025.

Additional News
Merus recently announced a collaboration with Biohaven to co-develop three novel bispecific antibody drug conjugates (ADCs), building on Merus' Biclonics® technology. This partnership merges Merus' platform with Biohaven's ADC expertise. Additionally, Merus gained Breakthrough Therapy designation from the FDA for petosemtamab in combination with pembrolizumab for first-line treatment of PD-L1 positive head and neck squamous cell carcinoma. Merus also participated in the 24th Annual Needham Virtual Healthcare Conference, showcasing its innovative multispecific antibodies and strategic advancements in oncology.