On August 11, 2026 Mereo BioPharma Group plc (NASDAQ: MREO) ("Mereo" or the "Company"), a clinical-stage biopharmaceutical company focused on rare diseases, reported financial results for the second quarter ended June 30, 2026, and provided an update on recent corporate highlights.
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The Company is also updating its previous cash runway guidance. As of June 30, 2026, cash and cash equivalents were approximately $30 million, which are expected to fund operations into late-2027.
"The partnership with Sentynl Therapeutics which we announced earlier today marks a significant milestone for our alvelestat program and for the Company as a whole. We are now working together to refine the design of the global Phase 3 study for our potential first-in-class oral therapy for AATD-LD and look forward to a continued close collaboration during the short option period. Assuming exercise of the license option by Sentynl, we plan to initiate the Phase 3 trial in early 2027," said Denise Scots-Knight, Chief Executive Officer of Mereo BioPharma. "Additionally, alongside our partner Ultragenyx, we have had initial regulatory interactions on setrusumab with the FDA and the MHRA and we expect to be in a position to provide an update on the potential path forward by the end of this year. We finished the quarter with approximately $30 million in cash. Thanks to our careful expense management, we now expect that this cash will provide runway into late-2027, exclusive of the potential $40 million in upfront and R&D payments that we are eligible to receive on exercise of the alvelestat option by Sentynl."
Second Quarter 2026 Highlights, Recent Developments, and Anticipated Milestones
Setrusumab (UX143)
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The Orbit and the Cosmic Phase 3 studies did not achieve statistical significance against the primary endpoints of reduction in annualized clinical fracture rate, however, both achieved high statistical significance against the key secondary endpoint of improvement in bone mineral density, as well as reductions in vertebral fractures and improvements in patient reported outcomes (PROs) associated with disease severity, pain / discomfort and daily activities, with these PRO improvements achieving statistical significance in the Orbit study. Setrusumab also achieved meaningful reductions in fractures in certain bones and in patients with higher fracture frequencies. Both studies demonstrated a safety profile consistent with that observed in previous trials.
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Mereo and its partner, Ultragenyx Pharmaceutical, Inc. ("Ultragenyx"), are engaged with regulatory agencies to determine a potential path forward for setrusumab in pediatric OI patients and, to-date, have held discussions with the regulators in the U.S. and the U.K. The FDA indicated openness to considering alternative approaches to fracture analysis, with additional conversations needed to further define what additional clinical data would be needed to support a potential BLA. In recent communications with the MHRA, they encouraged further dialogue on any future development proposal, and we plan to have further interactions following the FDA discussions.
Alvelestat (MPH-966)
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Mereo recently announced an option and license agreement with Sentynl Therapeutics, Inc. (Sentynl), a wholly owned subsidiary of Zydus Lifesciences Limited. Sentynl has the right to acquire a license for the U.S. commercial and global manufacturing rights to alvelestat for AATD-LD.
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Sentynl is a California-based, commercial-stage biopharmaceutical company with three currently approved products for rare diseases.
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Under the agreement, the companies will collaborate to refine the design of the planned global Phase 3 trial of alvelestat and to advance the manufacturing during the short option period.
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Mereo will receive a non-refundable option fee and, on option exercise, would also be eligible to receive $40 million in upfront and R&D payments, up to $435 million in regulatory and commercial milestone payments, as well as double-digit tiered royalties on U.S. net sales of alvelestat.
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Mereo will lead the global Phase 3 study and regulatory interactions until study completion and will retain rest-of-world commercial rights for alvelestat.
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On exercise of the option by Sentynl, the agreement provides funding for the global Phase 3 study, which could be initiated early in 2027.
Vantictumab (OMP18R5)
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āshibio, Inc. (āshibio), Mereo’s development and commercial partner for vantictumab, is continuing to advance toward initiation of a Phase 2 clinical trial in autosomal dominant osteopetrosis Type 2 (ADO2).
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āshibio is responsible for the global clinical development of vantictumab. Mereo has retained European commercial rights to the product, with āshibio holding commercial rights for the rest of the world.
Second Quarter 2026 Financial Results
Total research and development ("R&D") expenses decreased by $3.6 million, from $5.4 million in the second quarter of 2025 to $1.8 million in the second quarter of 2026. The decrease was primarily due to a reduction of $2.6 million in R&D expenses for setrusumab and $1.0 million for alvelestat. The decrease in program expenses for setrusumab was primarily driven by reduction of, and delays to, investment in manufacturing and ongoing activities, including medical affairs activities in Europe during the second quarter of 2026. The decrease in program expenses for alvelestat was primarily due to completion of activities undertaken in preparation for the potential Phase 3 study during 2025.
General and administrative ("G&A") expenses decreased by $0.3 million, from $5.5 million in the second quarter of 2025 to $5.2 million in the second quarter of 2026. The decrease was primarily due to reductions of approximately $2.2 million driven by delays to investment in pre-commercial activities to lay the foundation for the potential commercial launch of setrusumab in Europe and other realized cost savings. These decreases were partially offset by the recognition of a $1.9 million reduction in expenses in the second quarter of 2025 for amounts received from our depository to reimburse certain expenses incurred by us in respect of our ADR program, whereas the corresponding amount in the current year was recognized in the first quarter of 2026.
Net loss for the second quarter of 2026 was $7.0 million, compared to $14.6 million for the second quarter of 2025, primarily reflecting reductions in R&D and G&A expenses and a lower net foreign currency translation loss.
As of June 30, 2026, the Company had cash and cash equivalents of $30.1 million, compared to $41.0 million as of December 31, 2025. The Company expects, 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 late 2027. This guidance does not include any future potential payments associated with business development activity around any of the Company’s programs.
Total ordinary shares issued as of June 30, 2026 were 798,093,044. Total ADS equivalents as of June 30, 2026 were 159,618,608, with each ADS representing five ordinary shares of the Company.
(Press release, Mereo BioPharma, AUG 11, 2026, View Source [SID1234669949])