Mural Oncology (NASDAQ: MURA, $1.12, Market Capitalization $19.30 million), a clinical-stage oncology company focused on discovering and developing immunotherapies, provided an update on the Phase 3 ARTISTRY-7 trial of Nemvaleukin in combination with KEYTRUDA® (pembrolizumab) in patients with Platinum-Resistant Ovarian Cancer (PROC). Based on overall survival data observed in the interim analysis, Mural halted the phase 3 ovarian cancer trial involving nemvaleukin alfa. (for more information, visit spinoffresearch.com). Given the setback, the market reacted negatively, and the stock nosedived ~71%. However, Nemvaleukin will continue to be evaluated in a potentially registrational phase 2 trial, ARTISTRY-6, cohort 2, in mucosal melanoma. The topline data readout is expected in 2Q25. Moreover, the preliminary data readouts for less-frequent intravenous dosing of nemvaleukin in patients with cutaneous melanoma are expected in 2Q25 for cohort 3 of ARTISTRY-6 (monotherapy) and in 2H25 for cohort 4 of ARTISTRY-6 (combination therapy), subject to patient enrolment.
Earlier in 4Q24, the Company expanded its pipeline by nominating two development candidates, one for its interleukin-18 (IL-18) program and another for its IL-12 program. MURA-8518 is designed to be a half life extended, binding protein-resistant IL-18 in order to overcome the native cytokine’s limitations as a therapeutic. Mural expects to submit an Investigational New Drug (IND) Application or Clinical Trial Application (CTA) for a phase 1 trial of MURA-8518 in 4Q25. MURA-7012 is comprised of targeted split IL-12 sub-units that preferentially self-assemble at the tumor site and are designed to limit systemic exposure.
Valuation and Recommendation
Our fair value estimate for Mural Oncology is $2.75 per share (Previously: $12.00 per share), based on a terminal growth rate of 2% and WACC of 14.01%. The downgrade in our target price factors in the recent announcement of the termination of the Phase 3 trial of ARTISTRY-7. The trial investigated the efficacy of nemvaleukin alfa with Merck & Co., Inc.’s (MRK) Keytruda against chemotherapy for the treatment of platinumresistant ovarian cancer (PROC). The company stated that the combination therapy failed to demonstrate a statistically significant improvement in overall survival (OS) (the primary endpoint) compared to the standard of care, due to which the company’s potential for revenue has declined. Due to this, the stock took a significant hit and has fallen by ~71% since the announcement.
Due to the termination of ARTISTRY-7 for ovarian cancer, the company now looks forward to a top-line data readout for ARTISTRY-6, cohort 2 in mucosal melanoma in 2Q25. Along with that, Nemvaleukin is also set for preliminary data readouts in 2Q25 for less-frequent intravenous dosing in ARTISTRY-6 cohort 3 and 2H25 for ARTISTRY 6 cohort 4, both targeting cutaneous melanoma. Mural also expanded its pipeline in 4Q24 by nominating two development candidates, named MURA-8518 and MURA- 7012. As of FY24, Mural Oncology has spent ~$607 million from FY21 to FY24, which implies the company is heavily investing in its pipeline drug, Nemvaleukin. Furthermore, the company stated that the current cash, cash equivalents, and marketable securities of $144.4 million are expected to fund its operations into 1Q26, and the company has not provided any updates on the new cash injection. As the bulk of cash would be used for operational purposes, we have assumed a net cash of $14 million (~10% of cash) in our DCF valuation model. In view of its high-risk business model and no further indication of cash injection or plans to raise capital, the stock offers an asymmetric binary payout depending on the success of ongoing trials on Nemvaleukin candidates for melanoma therapy. We maintain our ‘Long Term High Risk Buy’ rating on Mural Oncology Plc with an implied upside of 145.4% from the current market price of $1.12 as of 4/9.
About the ARTISTRY-7 Trial
ARTISTRY-7 was a phase 3 trial comparing nemvaleukin in combination with pembrolizumab vs. investigator choice single-agent chemotherapy in patients with platinum-resistant epithelial ovarian, fallopian tube, or primary peritoneal cancer. This trial completed enrollment with 456 patients, and its primary endpoint was overall survival (OS). In the interim analysis of ARTISTRY-7, the safety profile was generally consistent with previously reported data. However, the Company noted that in the prespecified interim analysis conducted by the independent data monitoring committee, nemvaleukin in combination with pembrolizumab did not achieve a statistically significant improvement in overall survival versus the investigator’s choice of chemotherapy alone, and the company believed the study was highly unlikely to achieve success at the final analysis. Median overall survival was 10.1 months for patients treated with nemvaleukin in combination with pembrolizumab and 9.8 months for patients treated with investigator’s choice chemotherapy (hazard ratio: 0.98).
Next Steps & Milestones:
Despite the ARTISTRY-7 trial setback, Mural Oncology has set several key milestones in its development trajectory over the next year.
2Q25: Top-line data readout of Cohort 2 of ARTISTRY-6, Mural’s potentially registrational phase 2 trial of nemvaleukin monotherapy in patients with unresectable or metastatic mucosal melanoma previously treated with immune checkpoint blockade. Nemvaleukin has been granted an Orphan Drug Designation by the FDA for the treatment of mucosal melanoma.
1H25: Preliminary data readout of Cohort 3 of ARTISTRY-6, an evaluation of a less frequent intravenous (LFIV) dose of nemvaleukin monotherapy in patients with cutaneous melanoma. The company is conducting a trial to evaluate the activity and further characterize the safety of nemvaleukin with LFIV dosing in patients with cutaneous melanoma.
2H25: Preliminary data readout of Cohort 4 of ARTISTRY-6, an evaluation of an LFIV dose of nemvaleukin in combination with pembrolizumab in patients with cutaneous melanoma.
1H26: Submission of Investigational New Drug or Clinical Trial Application for a phase 1 trial of MURA-8518, its IL-18 development candidate.
These milestones reflect Mural’s commitment to addressing unmet medical needs in oncology and advancing innovative immuno-oncology therapies.
Financial & Market Outlook:
• Mural Oncology is positioned to address large unmet medical needs in mucosal and cutaneous melanoma, which has limited therapeutic options. According to Bloomberg Intelligence report, the global market for melanoma drugs can reach nearly $11 billion in 2027 from $8 billion in 2023, and without risk adjustment for pipeline products and key line extensions, sales are projected to pass $12 billion by 2030. The company expects nemvaleukin to be a key asset for driving growth.
• With an adequate cash runway into 1Q26, the company is well-positioned to continue its clinical development programs. At the end of FY24, the Company reported a cash balance is $144.4 million.
4Q24
On 3/11, the company released its 4Q and FY24 results. For 4Q24, Research and Development (R&D) expenses were $28.7 million in 4Q24 compared to $42.2 million in 4Q23. The decrease was primarily due to lower employee-related expenses, including a non-cash share-based employee compensation charge in 4Q23, as a result of the impact of the modification of share-based awards in connection with the separation from Alkermes. Moreover, the timing of patient enrolment in the ARTISTRY-7 trial and the winding down of the ARTISTRY-1 and ARTISTRY-2 trials during 2024 also contributed to the lower R&D expenses in 4Q24. General and Administrative (G&A) expenses were $7.2 million in 4Q24 compared to $16.2 million in 4Q23. The decline in G&A expense was attributable to a decreased employee-related expenses compared to those previously allocated to Mural Oncology by Alkermes prior to the separation and to one time increases in employee-related expenses in 2023, including a non-cash share-based employee compensation charge in 4Q23 as a result of the impact of the modification of share based-awards in connection with the separation. Ultimately, the Company’s net loss declined to $34.3 million in 4Q24, compared to $59.5 million in 4Q23, which included the one-time charges of ~$11.7 million related to the separation from Alkermes and conversion of Alkermes employee equity awards into Mural equity. Although loss per share improved to $2.01 in 4Q24 compared to $3.57 in 4Q23, it was a miss as compared to the consensus estimate of $2.10 per share.
FY24
Research and Development (R&D) expenses were $110.7 million in FY24 compared to $165.5 million in the prior-year period. The decrease was primarily due to lower employee-related expenses compared to the personnel previously allocated to Mural by Alkermes prior to the separation. The decline in R&D expenses was due to decreased spending on the ARTISTRY-1 and ARTISTRY-2 trials as activities related to these trials wound down in 2023 and lower manufacturing spending on other programs. General and Administrative (G&A) expenses were $27.6 million in FY24 compared to $30.7 million in the prior-year period. The decrease in G&A expense was primarily attributable to lower employee-related expenses, partially offset by costs associated with operating as a standalone company after the Separation. Ultimately, the Company’s net loss declined to $128.5 million in FY24, compared to $207.4 million in FY23, which included one-time charges related to the separation from Alkermes and the conversion of Alkermes employee equity awards into Mural equity. Consequently, loss per share improved to $7.58 in FY24 compared to $12.43 in FY23. The cash balance at the end of FY24 was ~$144.4 million.
Valuation
In recent developments, MURA terminated the Phase 3 trial of ARTISTRY-7, the Nemvaleukin candidate for ovarian cancer. We have adjusted our model to factor in this development, and our revenue model is driven by Nemvaleukin’s ARTISTRY-6 cohort 2, cohort 3 and cohort 4 candidates, currently in potential registration, for the monotherapy of patients with mucosal & cutaneous melanoma. Mural expects topline readouts for ARTISTRY-6 cohort 2 in 2Q25 and preliminary data read-outs for ARTISTRY-6 cohort 3 and cohort 4 candidates for cutaneous melanoma in 2Q and 2H25. Mural also expanded its pipeline in 4Q24 by nominating two development candidates, named MURA-8518 and MURA-7012, designed to deliver a more sustained immune response and leverage native IL-12’s anti-tumor potency while mitigating its hallmark toxicity. With the ovarian cancer terminated, the company now majorly focuses on melanoma therapy. According to Bloomberg, the market for melanoma drugs can reach nearly $11 billion in 2027 from $8 billion in 2023. We estimate Nemvaleukin to achieve ~$40.2 million in net revenue by 2032 with ~0.5% market share.
DCF Valuation – Using a discounted cash flow methodology, our fair value estimate for Mural Oncology stands at $2.75 (Previously: $12.00) per share. The downgrade in our target price factors in the recent announcement of the termination of the Phase 3 trial of ARTISTRY-7. Our DCF thesis assumes a terminal growth rate of 2%, WACC of 14.01% and a share count of 17.2 million. The company stated that the current cash, cash equivalents, and marketable securities of $144.4 million are expected to fund its operations into 1Q26, and the company has not provided any outlook on whether further cash will be injected. As the bulk of cash would be used for operational purposes, we have assumed a net cash of $14 million (~10% of cash) in our DCF valuation model. Our implied equity value for Mural Oncology stands at $47 million, which is mostly due to the present value of our estimated terminal cash flow at $26 million.
Risk to Target Price/Valuation – For Mural Oncology, clinical outcomes from clinical trials, especially for products such as nemvaleukin, could impact how investors view its outlook.
Company Description
Mural Oncology
Mural Oncology is leveraging its novel protein engineering platform to develop cytokine-based immunotherapies for cancer treatment. By combining its expertise in cytokine biology, immune cell modulation, and protein engineering platforms, MURA is developing medicines to deliver meaningful and clinical benefits to people with cancer. The company’s mission is to broaden the potential and reach of cytokine-based immunotherapies to improve the lives of patients. MURA’s lead candidate, nemvaleukin, is currently in potentially registrational trials in mucosal and cutaneous melanoma. Mural Oncology has its registered office in Dublin, Ireland, and its primary facilities in Waltham, Mass.