Mereo BioPharma Prices $50M Direct Offering of ADS at Market

LONDON, June 14, 2024 – Mereo BioPharma Group plc (NASDAQ: MREO), a biopharmaceutical company specializing in rare diseases, has announced the pricing for an underwritten offering of 12,531,300 American Depositary Shares (ADSs). Each ADS is priced at $3.99, aligning with the Nasdaq rules for direct offerings. Before underwriting discounts, commissions, and expenses, the gross proceeds from this offering are projected to be around $50 million. Each ADS corresponds to five ordinary shares of Mereo.

The net proceeds from this offering will primarily support the setrusumab program, which includes supply and pre-launch activities in Europe. Additionally, funds will be allocated for working capital and other corporate objectives. The offering is anticipated to close around June 17, 2024, pending standard closing conditions.

New investors such as Frazier Life Sciences, Deerfield Management, and Perceptive Advisors, along with existing shareholders like Rubric Capital Management, Rock Springs Capital, and Janus Henderson Investors are participating in this offering. Jefferies, Leerink Partners, and Cantor are acting as joint book-running managers.

A shelf registration statement on Form S-3 (File No. 333-279433) related to this ADS offering was declared effective by the SEC on May 22, 2024. The offering will be conducted solely by means of a prospectus supplement and the accompanying prospectus, both forming part of the registration statement. A final prospectus supplement outlining the terms of the offering will be filed with the SEC and made available on their website.

Mereo BioPharma is committed to developing innovative therapies for rare diseases. The company has two main product candidates: setrusumab for osteogenesis imperfecta (OI) and alvelestat for severe alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD). In collaboration with Ultragenyx Pharmaceutical, Inc., Mereo has completed enrollment in the Phase 3 portion of a pivotal Phase 2/3 pediatric study for setrusumab in young adults and a Phase 3 study in younger pediatric patients.

Ultragenyx is expected to make additional milestone payments up to $245 million to Mereo, along with royalties on commercial sales in Ultragenyx territories. Mereo retains commercial rights in the EU and UK and will pay royalties to Ultragenyx for sales in these regions. Setrusumab has been granted orphan designation for OI by both the EMA and FDA, PRIME designation by the EMA, and pediatric disease designation by the FDA.

Alvelestat has received U.S. Orphan Drug Designation for AATD treatment and Fast Track designation from the FDA. Following positive results from ASTRAEUS and ATALANTa studies in AATD-lung disease, the company has aligned with both the FDA and EMA on primary endpoints for a Phase 3 pivotal study that could lead to full approval in the U.S. and Europe.

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