What happened

Shares of Mersana Therapeutics (MRSN 16.63%), a clinical-stage biopharmaceutical company, are falling after the company released clinical-trial results for its lead candidate. Investors weren't thrilled with the data and pushed the stock 14.9% lower as of 3:13 p.m. EST on Tuesday.

So what 

Mersana's stock price has been erratic as investors, agitated by the coronavirus pandemic, waited for phase 1 data from the company's new lead candidate, XMT-1536. That's why results that weren't great were enough to push the stock lower today.

Person holding a downward sloping arrow.

Image source: Getty Images.

The company abandoned its previous lead candidate, XMT-1522, after a disappointing risk-to-benefit ratio in a phase 1 study with breast cancer patients led Mersana's former collaboration-partner Takeda to walk away from the program.

Since the company's fallout with Takeda, investors were easily frightened by less-than-encouraging safety and efficacy data that the company presented from a phase 1 ascending-dose study with XMT-1536 and patients with a variety of solid tumors. The trial included 59 patients treated with seven ascending dosages of XMT-1536, an antibody that releases a small dose of lethal chemotherapy when it encounters cells with a surface protein called NaPi2b.

The stock is getting pressured today because none of the patients treated with XMT-1536 achieved complete remission, and it looks like the drug shrank tumors for just five patients. Moreover, just two of those partial responses are ongoing.

Now what

Mersana did its best to focus on arguably positive signals that aren't going to persuade any deep-pocketed drugmakers like Takeda back to the deal table. That won't stop the company from enrolling another 90 patients into the study, and Mersana expects to provide interim data from the expansion portion in the second quarter.

Until Mersana can show stronger signals of efficacy for one of its novel new cancer drug candidates, investors should probably watch the company's story unfold from a safe distance.