Merus N.V. stock soars on breakthrough cancer trial: What drove MRUS to the top gainers list?

On May 23, 2025, shares of Merus N.V. (NASDAQ: MRUS) surged over 32%, making it the top gainer on the U.S. stock market. The dramatic rally was driven by promising new data from its petosemtamab clinical trial targeting head and neck cancers, in combination with Merck & Co.’s Keytruda. With analysts citing a potential shift in the oncology treatment paradigm, institutional and retail investors responded with strong buying activity.

MRUS closed at $55.14 on Friday, up from $41.60 the previous session, marking one of its most substantial single-day gains in over two years. With over 9.2 million shares traded—more than 15 times its average daily volume—the stock drew renewed attention from biotech investors, hedge funds, and oncology-focused funds.

Why Did MRUS Stock Rise on May 23, 2025?

The immediate catalyst for Merus’ rally was the presentation of positive clinical data from a Phase 1b/2 trial evaluating petosemtamab, a bispecific antibody targeting EGFR and LGR5, in combination with Keytruda (pembrolizumab) in recurrent or metastatic head and neck squamous cell carcinoma (HNSCC). The company reported a one-year survival rate of 79%, a figure that significantly outperforms historical benchmarks for existing second-line therapies in HNSCC. The trial also demonstrated durable responses, with manageable safety signals. This announcement triggered an influx of investor optimism, with many biotech analysts describing the data as transformational in the context of Merus’ pipeline.

Equity research firm Needham & Co. responded swiftly by raising their price target on MRUS to $88 and assigning a 60% probability of FDA approval for the drug. Several other brokerages followed suit with bullish commentary, citing the trial’s survival outcome as a potential game-changer in immuno-oncology combinations.

What Is Petosemtamab and Why Does It Matter?

Petosemtamab is a full-length IgG1 bispecific antibody that binds both EGFR and LGR5, believed to act through a dual mechanism of tumour targeting and immune modulation. Unlike other EGFR inhibitors, petosemtamab is designed to overcome resistance mechanisms by targeting cancer stem cells via LGR5.

In this trial, the synergy with Merck’s Keytruda, a PD-1 immune checkpoint inhibitor, appears to unlock additional tumour suppressive effects without adding substantial toxicity. Analysts noted that if these results are replicated in larger trials, petosemtamab could represent a first-in-class treatment approach, opening up Merus to multiple potential indications beyond head and neck cancer, including colorectal and non-small cell lung cancers.

With Merus retaining full rights to the compound, the commercial implications could be significant, particularly if Merck or another pharma giant enters into a co-development or licensing deal.

Institutional Sentiment and Fund Flows

Friday’s price surge was accompanied by a significant spike in trading volume, suggesting institutional participation. According to preliminary data from Nasdaq’s trade tape, block trades over 10,000 shares surged during mid-session, indicating hedge funds or healthcare-focused ETFs were building positions.

Moreover, the biotech sector (XBI ETF) showed relative strength on the day, with Merus acting as a bellwether for renewed interest in small and mid-cap biotech plays. Market sources also pointed to short covering activity, with MRUS previously having a short interest exceeding 10% of float, amplifying the day’s upward momentum.

How Does Merus Compare to Its Biotech Peers?

Merus stands out within the immuno-oncology space due to its bispecific antibody platform, which is structurally and mechanistically distinct from traditional checkpoint inhibitors and CAR-T therapies. While peers like Zymeworks, MacroGenics, and Immunocore also operate in the bispecific space, Merus’ petosemtamab has shown particularly encouraging monotherapy and combination results.

The company’s ability to achieve a strong survival benefit with limited toxicity, especially in heavily pre-treated cancer populations, places it in a favourable competitive position as larger pharma firms increasingly look for innovative, differentiated platforms to acquire or license.

MRUS Stock Technicals and Resistance Levels

From a technical standpoint, MRUS broke through multiple resistance zones, including its 200-day moving average, on heavy volume. The breakout above $50 established a new psychological support, and if momentum continues, analysts project potential upside to the $65–$70 range in the near term.

Relative Strength Index (RSI) moved into overbought territory, which may suggest consolidation is likely before the next leg up. However, the strength of the fundamental catalyst could override short-term technical signals.

What’s Next for Merus N.V.? Key Catalysts to Watch

Looking ahead, investors will be watching for a number of key developments. These include FDA pathway clarification, which could come in the form of Fast Track or Breakthrough Therapy designation, and updated trial data from larger cohorts or Phase 3 plans, potentially to be announced at ASCO 2025 or future oncology conferences. There is also the possibility of partnership or licensing announcements, particularly with Merck already involved in the trial, which could de-risk the program financially.

Merus had approximately $325 million in cash as of Q1 2025, providing an estimated runway of 18 to 24 months. However, expansion into larger-scale trials or multiple indications may lead to capital raises or non-dilutive funding options through grants or collaborations.

Expert Commentary: What Analysts Are Saying

Analysts from Needham, H.C. Wainwright, and Leerink issued post-trial commentary calling the data encouraging and clinically meaningful. In indirect statements, several expressed that Merus has transitioned from a high-risk, early-stage company to a clinical-stage biotech with a defined regulatory and commercial pathway.

While some remain cautious on valuation due to upcoming trial uncertainties, there is broad consensus that petosemtamab’s performance is a positive inflection point for the company.

Will MRUS Sustain Its Momentum?

While biotech stocks are notoriously volatile, the scale of Friday’s rally, coupled with high-quality clinical data and positive sentiment from both analysts and investors, suggests MRUS may maintain higher valuation support in the short to medium term.

The next few months will be critical as the company navigates regulatory interactions, potential collaborations, and readouts from other pipeline assets. Given Merus’ platform potential and early efficacy signals, further upside could materialize if it attracts partnership interest or expands its target indications.