JPMorgan downgrades Mersana after being ‘completely blindsided’

JPMorgan analyst Brian Cheng downgraded Mersana Therapeutics to Neutral from Overweight with a price target of $5, down from $11, following the partial clinical hold and the new Grade 5 bleeding events disclosed this morning. The analyst also removed the shares from the firm’s Analyst Focus List. The firm was “completely blindsided” by the new fatal bleeding cases. Even with the assumption that UPLIFT readout by early August will be positive from an efficacy standpoint, it is difficult to stand by a bullish thesis given concerns on its eventual approvability in the U.S. and commercial attractiveness with potential risks of black-boxed warnings, the analyst tells investors in a research note. JPMorgan believes these concerns “will linger for some time and will remain front-and-center.”