Dynamic Top Pick List update Removing Merus

Last week, Merus announced solid interim Phase 2 data to be presented at the ASCO 2025 conference with its lead asset petosemtamab in combination with current standard of care Keytruda for first-line treatment of patients with head and neck cancer (PD-L1+ refractory/ metastatic (r/m) head and neck squamous cell carcinoma (HNSCC)), a cancer type that is notoriously hard to treat.
The updated dataset contains more patients than last year's presentation and featured a 63% overall response rate (27/43 patients), of which 6 were complete responses. The median progression-free survival of treated patients was 9 months, and after 12 months 79% patients were still alive. Responses were observed across different patient subsets, and the treatment revealed no new safety signals.
On essentially every metric, the updated data are significantly better than the current standard of care, Keytruda monotherapy, which in its pivotal KEYNOTE-048 trial featured a 19% overall response rate and 3.2 month median progression-free survival. As such, the data support petosemtamab's potential to outperform Keytruda monotherapy and become the new gold standard in head and neck cancer.
As a result, Merus' share price has shot up significantly overnight, fulfilling our investment thesis for inclusion in our Dynamic Top Pick List. While we continue to remain bullish on Merus' long-term trajectory, especially now that it could become an attractive takeover candidate for (big) pharma, we lock in our gains for now and look out to the next clinical catalyst, likely an update on its other ongoing clinical trials with petosemtamab later this year.