Mereo BioPharma Q2 2024 Financial Results and Corporate Update

Mereo BioPharma Group plc, a clinical-stage biopharmaceutical company focused on rare diseases, has released its financial results for the second quarter ending June 30, 2024, along with updates on its corporate milestones. The company reported cash and cash equivalents totaling $87.4 million, which includes net proceeds from a $50 million registered direct offering in June 2024. This financial position is expected to enable Mereo to sustain its operations through 2027, covering several critical junctures.

Dr. Denise Scots-Knight, CEO of Mereo, highlighted significant strides made during the quarter. Notably, the Phase 2 portion of the ongoing Phase 2/3 Orbit study in patients with Osteogenesis Imperfecta (OI) showed a sustained 67% reduction in annualized fracture rates following at least 14 months of treatment with setrusumab. This underscores the potential long-term clinical benefits of setrusumab for OI patients. The company is also advancing in its regulatory submissions to ensure that the AATD program for alvelestat is ready for Phase 3 by the end of the year, while ongoing discussions with potential partners continue.

In the second quarter of 2024, the Phase 3 Orbit and Cosmic studies for setrusumab in OI, conducted by Ultragenyx, were fully enrolled as of April 30, 2024. Positive 14-month results from the Phase 2 portion of the Orbit study were announced on June 11, 2024. The data revealed that setrusumab significantly reduced the incidence of fractures in OI patients and led to continued improvements in lumbar spine bone mineral density (BMD) at the 12-month mark. The median annualized rate of radiologically confirmed fractures was reduced from 0.72 to 0.00, reflecting a 67% reduction. Additionally, there were no treatment-related serious adverse events or hypersensitivity reactions associated with setrusumab.

Research from Mereo's osteogenesis imperfecta program has also been published, including 12-month results from the Phase 2b ASTEROID study and the initial publication from SATURN, a project aimed at creating a coordinated data set across multiple treatment centers in Europe to support pricing and reimbursement decisions.

Regarding alvelestat, Mereo continues to engage with potential partners for its development and commercialization. The company submitted validation work for SGRQ in AATD and the detailed Phase 3 package to the FDA by the end of Q2, aiming to start the Phase 3 study by the end of 2024.

Financially, Mereo reported a net loss of $12.3 million for the second quarter of 2024, up from $1.8 million in the same period in 2023. The increased loss was primarily due to a one-time milestone payment received in Q2 2023 and higher research and development (R&D) and general and administrative (G&A) expenses in Q2 2024. R&D expenses rose by $1.2 million, driven by preparatory work for the Phase 3 study of alvelestat and activities related to setrusumab. G&A expenses increased by $5.2 million, largely due to pre-commercial activities for setrusumab in Europe and a reduction in reimbursements from the company's depository.

As of June 30, 2024, Mereo's cash and cash equivalents stood at $87.4 million, up from $57.4 million as of December 31, 2023. The financial outlook suggests that the current cash balance will support the company’s clinical trials, operating expenses, and pre-commercial activities for setrusumab through 2027. This projection does not account for potential upfront payments from partnerships or business development activities for non-core programs.

Mereo BioPharma, headquartered in London, remains focused on developing innovative treatments for rare diseases. The company has two primary rare disease product candidates: setrusumab for OI and alvelestat for severe alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD). In addition, Mereo continues to explore partnerships and strategic collaborations to advance its pipeline and achieve its long-term goals.

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