Mersana Therapeutics's stock craters after FDA halts trials of ovarian cancer treatment after patient deaths

By Ciara Linnane

Stock loses more than half its value, the worse one-day performance since going public five years ago

Mersana Therapeutics Inc.'s stock cratered on Thursday, after the U.S. Food and Drug Administration paused enrollment in two trials of a treatment for ovarian cancer after patients suffered bleeding events and five died.

The stock (MRSN) tumbled 58% to mark its biggest ever one-day percentage decline since the company went public in June of 2018.

Cambridge, Mass.-based Mersana said the FDA had placed a partial clinical hold on the trials dubbed Up-Next and Upgrade-A, which are evaluating its UpRi therapy as a treatment for platinum-sensitive ovarian cancer.

Platinum-sensitive ovarian cancer is one that recurs six months to a year after the last platinum-based chemotherapy.

"The partial clinical hold follows a submission by Mersana of a recent aggregate safety report of all patients dosed with UpRi (approximately 560 patients) evaluating bleeding events," the company said in a statement.

While data on the rate of bleeding in this type of ovarian cancer remains limited, the company assessed that serious bleeding events were occurring at a higher rate than expected in such patients.

And while most cases in the trial were deemed to be low-grade, five fatal events occurred. The causes are still under investigation.

"Patient safety is always at the forefront for us, and work is now underway to compile further analyses that may inform FDA," Chief Executive Anna Protopapas said in the statement.

For now, patients enrolled in the trial can continue to take the therapy.

JPMorgan added Mersana to its Focus List in early June, on expectations of a more favorable outcome for the trials.

"Net-net, we see significant upside potential if MRSN's study succeeds in platinum-resistant ovarian cancer," analyst Brian Cheng wrote in a note on the move. JPMorgan had an overweight rating on the stock.

All eight analysts that cover the company on FactSet rated it a buy.

Other drug companies working to develop ovarian cancer treatments include Immuogen Inc. (IMGN), which posted positive results from a Phase 3 trial in May.

Mersana stock was up 63% in the year through Wednesday's close, while the S&P 500 has gained 14%.

-Ciara Linnane

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06-15-23 1408ET

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