On March 26, 2025 Mereo BioPharma Group plc (NASDAQ: MREO) ("Mereo" or the "Company"), a clinical-stage biopharmaceutical company focused on rare diseases, reported its financial results for the full year ended December 31, 2024, and provided recent corporate highlights (Press release, Mereo BioPharma, MAR 26, 2025, View Source [SID1234651463]).

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"2024 was a year of focused execution and strategic advancement at Mereo, driving our lead programs closer to key milestones," said Dr. Denise Scots-Knight, Chief Executive Officer of Mereo. "The Phase 3 Orbit study of setrusumab in osteogenesis imperfecta (OI) is set to read out at the upcoming second interim analysis mid-year or at the final analysis during the fourth quarter of 2025. This could set the stage for us, alongside our partner Ultragenyx, to file for regulatory approvals in the U.S. and EU. Our European pre-commercial activities are ongoing, where we are focused on laying the foundation for a successful and efficient commercial launch, following potential regulatory approval. On alvelestat, the recent receipt of European Orphan Designation and the Phase 3 readiness activities have been highly supportive for our ongoing partnering process. With a strong financial position, we look forward to a transformative 2025, focused on bringing life-changing therapies to patients with rare diseases."

2024 Highlights, Recent Developments, and 2025 Anticipated Milestones

Setrusumab (UX143)

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Continued progress in two global studies, the Phase 3 portion of Orbit (Phase 2/3) and Cosmic (Phase 3), of setrusumab in OI patients, led by our partner Ultragenyx.
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The Phase 3 portion of the Orbit Study is continuing to dose pediatric and young adult patients, with the second interim analysis expected mid-2025 and potential final analysis in the fourth quarter of 2025.
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Treatment is ongoing in the open-label Phase 3 Cosmic study evaluating setrusumab against intravenous bisphosphonate therapy in patients aged 2 to <7 years. Data from this study will be evaluated in parallel with the interim or final analysis from the Orbit study.
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Pre-commercial activities to lay the foundation for launch ongoing.
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Scientific advice obtained from GBA in Germany and NICE in the U.K.
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Progress on project SATURN with existing registries that are appropriate sources of data on the natural history of OI and longitudinal data with the standard-of-care.

Alvelestat (MPH-966)

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In the first quarter of 2025, the European Commission granted Orphan Designation to alvelestat for the treatment of AATD-LD. This designation followed a positive recommendation from the EMA Committee for Orphan Medicinal Products in January 2025.
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Alvelestat previously received Orphan Drug Designation and Fast Track Designation from the U.S. FDA in 2021 and 2022, respectively.
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The Company remains in discussion with multiple potential partners for the development and commercialization of alvelestat.

Full Year 2024 Financial Results

Total research and development ("R&D") expenses increased by $3.5 million from $17.4 million in 2023 to $20.9 million in 2024. The increase was primarily due to increases of $6.2 million and $2.6 million in R&D expenses for alvelestat and setrusumab, respectively, partially offset by a $5.5 million decrease in R&D expenses for etigilimab. The increase in program expenses for alvelestat is due to the preparatory work for the Phase 3 study. This principally comprised drug formulation and manufacturing activities, SGRQ validation activities and regulatory interactions. The increase in program expenses for setrusumab was primarily due to higher levels of ongoing activities in Europe, including real-world evidence programs and medical affairs activities, and amounts under the manufacturing and supply agreement with our partner, Ultragenyx, along with input into development, regulatory and manufacturing plans with Ultragenyx, who fund the global development of the program pursuant to our license and collaboration agreement. The reduction in program expenses for etigilimab was primarily due to the winding down and completion of the open label Phase 1b/2 basket study in combination with an anti-PD-1 in a range of tumor types.

General and administrative expenses increased by $8.0 million from $18.4 million in 2023 to $26.4 million in 2024. The increase primarily reflects $2.7 million higher pre-commercial activities to lay the foundation for the commercial launch of setrusumab in Europe, including activities to support pricing and reimbursement by HTA authorities and payor decision-makers in Europe. The remaining increase is driven by additional corporate expenses, including employee-related costs and legal and professional fees in respect of compliance with the U.S. domestic reporting regime, and reductions in reimbursements of certain expenses from our depository in respect of our ADR program and settlement of a claim under our D&O insurance policy in the prior year.

Net loss for the full year ended December 31, 2024 was $43.3 million, compared to $29.5 million during the comparable period in 2023, primarily reflecting an operating loss of $47.4 million, partially offset by interest income and the benefit from R&D tax credits.

As of December 31, 2024, the Company had cash and cash equivalents of $69.8 million, compared to $57.4 million as of December 31, 2023. The Company’s guidance remains unchanged, and it continues to expect, based on current operational plans, that its existing cash and cash equivalents balance will enable it to fund its currently committed clinical trials, operating expenses, and capital expenditure requirements into 2027. This guidance does not include any potential upfront payments associated with a partnership for alvelestat or business development activity around any of the Company’s non-core programs.

Total ordinary shares issued as of December 31, 2024 were 775,728,034. Total ADS equivalents as of December 31, 2024 were 155,145,606, with each ADS representing five ordinary shares of the Company.