Merus N.V. (MRUS) Stock Analysis and Metrics

Sector: Healthcare Industry: Biotechnology CIK: 0001651311

P/B 8.99

P/E -18.29

P/S 99.92

Market Cap 6.97 Bn

ROIC (Qtr) -46.50

Div Yield % 0.00

Rev 1y % (Qtr) 3.21

Total Debt (Qtr) 12.32 Mn

Debt/Equity (Qtr) 0.02

About

Merus N.V., a clinical-stage oncology company, is at the forefront of developing innovative antibody therapeutics through its proprietary Biclonics and Triclonics technology platforms. The company's primary focus is on creating bispecific and trispecific antibodies, which are engineered to bind to multiple targets simultaneously, offering various mechanisms of action. These mechanisms include blocking oncogenic growth factor signaling and engaging the adaptive immune response. Merus has established a strong presence in the biotechnology industry...

Merus N.V., a clinical-stage oncology company, is at the forefront of developing innovative antibody therapeutics through its proprietary Biclonics and Triclonics technology platforms. The company's primary focus is on creating bispecific and trispecific antibodies, which are engineered to bind to multiple targets simultaneously, offering various mechanisms of action. These mechanisms include blocking oncogenic growth factor signaling and engaging the adaptive immune response. Merus has established a strong presence in the biotechnology industry and has operations in multiple countries.

The company generates revenue primarily through the development and potential commercialization of its antibody candidates. Merus' product portfolio includes MCLA-158 (petosemtamab), MCLA-128 (zenocutuzumab), MCLA-129, and MCLA-145. These candidates are designed to treat various types of cancer, including solid tumors, head and neck squamous cell carcinoma, and non-small cell lung cancer.

Within the industry, Merus competes with several other companies specializing in antibody therapeutics. The company's competitive advantage lies in its proprietary Biclonics and Triclonics technology platforms, which allow for the generation of a diverse array of antibody binding domains against virtually any target. Merus' pipeline of full-length, human, multispecific antibody candidates is a testament to the company's innovative approach in the field.

As for the company's customers, Merus primarily caters to the pharmaceutical industry, research institutions, and ultimately, cancer patients. The company's commitment to innovation and the development of life-saving therapies is evident in its robust product pipeline and strategic collaborations.

Merus' product portfolio includes the following brand names and trade names: MCLA-158 (petosemtamab), MCLA-128 (zenocutuzumab), MCLA-129, and MCLA-145. These names represent the company's dedication to innovation and the development of novel therapies for various types of cancer.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 367.49M provide 133.05x coverage of short-term debt 2.76M, demonstrating strong liquidity position and minimal refinancing risk.
Operating cash flow of (317.27M) provides exceptional 10.30x coverage of interest expenses (30.79M), showing strong debt service capability.
Strong tangible asset base of 902.45M provides 73.27x coverage of total debt 12.32M, indicating robust asset backing and low credit risk.
Tangible assets of 902.45M provide exceptional 15.76x coverage of deferred revenue 57.27M, showing strong service capability backing.
Free cash flow of (317.87M) provides exceptional 10.32x coverage of interest expense (30.79M), showing strong debt service ability.

Cons

Investment activities of (93.55M) provide weak support for R&D spending of 328.49M, which is -0.28x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Operating cash flow of (317.27M) provides insufficient coverage of deferred revenue obligations of 57.27M, which is -5.54x, raising concerns about future service delivery capabilities.
The company's operating cash flow of (317.27M) shows concerning coverage of stock compensation expenses of 72.01M, with a -4.41 ratio indicating potential earnings quality issues.
Free cash flow of (317.87M) provides weak coverage of capital expenditures of 607000, with a -523.68 ratio suggesting additional external financing needs for growth initiatives.
Operating cash flow of (317.27M) provides minimal -28.07x coverage of tax expenses of 11.30M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer Comparison

Companies in the Biotechnology

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	SMMT	Summit Therapeutics Inc.	1,349.40 Bn	-1,464.17	0.00	0.01 Bn
2	ONC	BeOne Medicines Ltd.	437.43 Bn	6,381.20	87.97	1.90 Bn
3	VRTX	Vertex Pharmaceuticals Inc / Ma	116.09 Bn	31.59	9.90	1.83 Bn
4	REGN	Regeneron Pharmaceuticals, Inc.	78.10 Bn	17.06	5.48	2.71 Bn
5	ALNY	Alnylam Pharmaceuticals, Inc.	55.87 Bn	1,282.42	17.40	3.21 Bn
6	ARGX	Argenx Se	52.85 Bn	35.08	27,559.65	-
7	BNTC	Benitec Biopharma Inc.	41.75 Bn	-998.33	0.00	0.00 Bn
8	INSM	INSMED Inc	37.80 Bn	-31.93	84.56	0.74 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	7.23	12.31
EV to Cash from Ops.	-20.61	23.25
EV to Debt	530.86	738.44
EV to EBIT	-16.32	-9.16
EV to EBITDA	-18.39	6.95
EV to Free Cash Flow [EV/FCF]	-20.57	21.90
EV to Market Cap	0.94	65.67
EV to Revenue	93.73	227.32
Price to Book Value [P/B]	8.99	22.34
Price to Earnings [P/E]	-18.29	-11.77

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	0.00	-11.94
Dividend Payout Ratio %	0.00	0.16
Dividend per Basic Share	0.00	0.01
FCF Dividend Payout Ratio %	0.00	-0.14
Interest Coverage	13.01	841.00

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	62.55	-27.13
Cash and Equivalents Growth (1y) %	-15.13	734.65
Dividend Growth (1y) %	0.00	0.01
EBIAT Growth (1y) %	-59.09	-46.93
EBITDA Growth (1y) %	-61.23	-1.68
EBIT Growth (1y) %	-59.21	-56.45
EBT Growth (1y) %	-55.96	-12.70
EPS Growth (1y) %	-34.18	-28.31
FCF Growth (1y) %	-102.28	-31.90
Gross Profit Growth (1y) %	59.20	226.84

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.08	0.14
Cash Payout Ratio	0.00	0.00
Cash Ratio	4.23	3.85
Current Ratio	7.97	7.27
Debt to Equity Ratio	0.02	0.40
Interest Cover Ratio	13.01	841.00
Times Interest Earned	13.01	841.00

Profitability

Metric	Value	Industry
EBITDA Margin %	-570.80	-18,234.31
EBIT Margin %	-574.26	-18,580.80
EBT Margin %	-530.13	-19,488.74
Gross Margin %	100.00	-7.59
Net Profit Margin %	-546.30	-19,439.22

Merus N.V. (NASDAQ: MRUS)