Mersana Therapeutics Announces 1-for-25 Reverse Stock Split

Rhea-AI Summary

Mersana Therapeutics (NASDAQ: MRSN), a clinical-stage biopharmaceutical company, has announced a 1-for-25 reverse stock split effective July 25, 2025. The split will reduce outstanding shares from 124.8 million to approximately 5.0 million.

The primary goal is to increase the per-share market price to regain compliance with Nasdaq's minimum bid price requirement. Trading on a split-adjusted basis will begin July 28, 2025, under the same ticker "MRSN". The split won't affect the number of authorized shares or par value, and proportionate adjustments will be made to equity incentive plans. Computershare Trust Company will serve as the exchange agent.

Positive

• Potential to regain Nasdaq compliance through increased share price
• Stockholder approval already obtained at Annual Meeting
• No change to company's market capitalization or enterprise value

Negative

• Indicates company's struggle to maintain minimum share price requirements
• May signal financial distress to market participants
• Could reduce stock liquidity due to fewer outstanding shares

Insights

Biotechnology Financial Analyst

Mersana's reverse split aims to maintain Nasdaq listing amid challenges, reducing 124.8M shares to 5M without changing company fundamentals.

Mersana Therapeutics' announcement of a 1-for-25 reverse stock split is primarily aimed at maintaining its Nasdaq Global Select Market listing by boosting its per-share price above minimum requirements. This move is typically a red flag indicating underlying financial challenges, as companies generally implement reverse splits when share prices have fallen significantly.

The mechanics are straightforward: every 25 shares will become 1 share, reducing outstanding shares from 124.8 million to approximately 5.0 million. While this mathematically increases the share price by 25x, it's crucial to understand this creates no fundamental value - the company's market capitalization remains unchanged.

For investors, this consolidation means holding fewer shares at a higher price. The split also adjusts equity incentive plans and outstanding equity awards proportionately, maintaining their relative value. No fractional shares will be issued; instead, affected shareholders will receive cash payments.

The reverse split comes at a critical juncture for Mersana, which is developing ADC therapeutics including Emi-Le targeting B7-H4 and XMT-2056 targeting HER2. The need for this financial maneuver suggests ongoing challenges in advancing these clinical programs to value-creating milestones. While maintaining Nasdaq listing provides continued access to capital markets, the underlying concerns that necessitated this action remain unaddressed.

CAMBRIDGE, Mass., July 24, 2025 (GLOBE NEWSWIRE) -- Mersana Therapeutics, Inc. (NASDAQ: MRSN), a clinical-stage biopharmaceutical company focused on the development of antibody-drug conjugates (ADCs) targeting cancers in areas of high unmet medical need, today announced that it will implement a 1-for-25 reverse stock split of the issued shares of the company’s common stock (the Reverse Stock Split), effective at 5:00 p.m. Eastern Time on July 25, 2025.

The Reverse Stock Split was approved by the company’s stockholders at the company’s Annual Meeting of Stockholders held on June 12, 2025, with the final ratio subsequently determined by the company’s Board of Directors. One of the primary goals of the Reverse Stock Split is to increase the per-share market price of the company’s common stock to enable the company to regain compliance with the minimum bid price requirement for continued listing on the Nasdaq Global Select Market.

The company’s common stock is expected to begin trading on a split-adjusted basis when the markets open on July 28, 2025 under the company’s existing ticker “MRSN” with the new CUSIP number 59045L 205.

At the effective time of the Reverse Stock Split, every 25 shares of the company’s issued and outstanding common stock will be automatically reclassified and combined into one share of common stock. This will reduce the number of outstanding shares of Mersana’s common stock from approximately 124.8 million shares to approximately 5.0 million shares. The Reverse Stock Split will not change the number of authorized shares of the company’s common stock or the par value of the common stock. In addition, proportionate adjustments will be made to the number of shares of common stock available for issuance under the company's equity incentive plans and the number of shares underlying, and the exercise prices of outstanding equity awards under such plans, in accordance with their respective terms and as described in the company's proxy statement for its 2025 Annual Meeting of Stockholders as filed with the Securities and Exchange Commission (SEC) on April 29, 2025 (the Proxy Statement).

No fractional shares will be issued if, as a result of the Reverse Stock Split, a stockholder would otherwise become entitled to a fractional share because the number of shares of common stock they hold before the Reverse Stock Split is not evenly divisible by the split ratio. Instead, each such stockholder will be entitled to receive a cash payment in lieu of a fractional share.

Computershare Trust Company, N.A. is acting as the exchange agent and transfer agent for the Reverse Stock Split. Stockholders holding their shares electronically are not required to take any action to receive post-split shares. Stockholders owning shares through a bank, broker or other nominee will have their positions adjusted to reflect the Reverse Stock Split and will receive payment for any fractional shares in accordance with their respective bank's, broker's or nominee's particular processes.

Additional information regarding the Reverse Stock Split can be found in the Proxy Statement.

About Mersana Therapeutics
Mersana Therapeutics is a clinical-stage biopharmaceutical company focused on the development of novel antibody-drug conjugates (ADCs) and driven by the knowledge that patients are waiting for new treatment options. The company has developed proprietary cytotoxic (Dolasynthen) and immunostimulatory (Immunosynthen) ADC platforms that have generated a pipeline of wholly-owned and partnered product candidates with the potential to treat a range of cancers. Its pipeline includes Emi-Le (emiltatug ledadotin; XMT-1660), a Dolasynthen ADC targeting B7-H4, and XMT-2056, an Immunosynthen ADC targeting a novel epitope of human epidermal growth factor receptor 2 (HER2). Mersana routinely posts information that may be useful to investors on the “Investors & Media” section of its website at www.mersana.com.

Forward-Looking Statements
This press release contains “forward-looking” statements and information within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as “aims,” “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “plans,” “possible,” “potential,” “seeks,” “will” and variations of these words or similar expressions, although not all forward-looking statements contain these words. Forward-looking statements in this press release include, but are not limited to, statements regarding the Reverse Stock Split and the timing thereof; the impact of the Reverse Stock Split on stockholders; the potential impact of the Reverse Stock Split on the company's share price; and the potential for the company to regain compliance with the minimum bid price requirement for continued listing on the Nasdaq Global Select Market. Mersana may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements, and you should not place undue reliance on these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements as a result of various factors, including, among other things, risks related to the trading prices and volatility of Mersana’s common stock, and other important factors, any of which could cause Mersana’s actual results to differ from those contained in the forward-looking statements, that are described in greater detail in the section entitled “Risk Factors” in Mersana’s Quarterly Report on Form 10-Q filed with the SEC on May 15, 2025, as well as in other filings Mersana may make with the SEC in the future. Any forward-looking statements contained in this press release speak only as of the date hereof, and Mersana expressly disclaims any obligation to update any forward-looking statements contained herein, whether because of any new information, future events, changed circumstances or otherwise, except as otherwise required by law.

Contact:
Jason Fredette
617-498-0020
jason.fredette@mersana.com

FAQ

What is the ratio of Mersana Therapeutics (MRSN) reverse stock split?

Mersana Therapeutics announced a 1-for-25 reverse stock split, meaning every 25 shares will be combined into one share.

When will MRSN's reverse stock split take effect?

The reverse stock split will be effective at 5:00 p.m. Eastern Time on July 25, 2025, with split-adjusted trading beginning on July 28, 2025.

How many shares will Mersana Therapeutics have after the reverse split?

The number of outstanding shares will be reduced from approximately 124.8 million to 5.0 million shares after the reverse split.

Why is Mersana Therapeutics doing a reverse stock split?

The primary goal is to increase the per-share market price to regain compliance with Nasdaq's minimum bid price requirement for continued listing on the Nasdaq Global Select Market.

What happens to fractional shares in MRSN's reverse split?

Stockholders entitled to fractional shares will receive a cash payment in lieu of fractional shares, as the number of shares must be evenly divisible by 25.