On November 9, 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 third quarter ended September 30, 2026, and provided an update on its late-stage programs.
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"During the third quarter, we have made meaningful progress on our two core programs, setrusumab and alvelestat. These developments have the potential to set the stage for a transformational 2027 for Mereo, our shareholders and the patients we aim to serve," said Denise Scots-Knight, Chief Executive Officer of Mereo BioPharma. "In collaboration with our partner Ultragenyx, we are continuing to work closely with the regulators, to determine the necessary data to support a regulatory submission for setrusumab in OI and if there is a potential path forward. We believe that the data from post-hoc fracture analyses presented at the recent American Society for Bone and Mineral Research (ASBMR) Annual Meeting further support setrusumab’s potential to provide meaningful benefit, particularly in pediatric, higher fracturing patients. We are also advancing our regulatory interactions on alvelestat for AATD-LD alongside Sentynl Therapeutics to streamline the Phase 3 design and are working to be in a position to initiate the Phase 3 study in early 2027. We continue to expect that our current cash position, which totaled $26.1 million as of September 30, will provide runway into late-2027, exclusive of the potential $40 million in upfront and R&D payments associated with the exercise of the alvelestat option by Sentynl and any other milestone payments which would further extend the runway."
Recent Developments and Anticipated Milestones
Setrusumab (UX143) for osteogenesis imperfecta (OI)
Following the results of the Orbit and Cosmic Phase 3 studies of setrusumab in OI, reported in December 2025, Mereo and its partner, Ultragenyx Pharmaceutical, Inc. (Ultragenyx), have engaged with regulatory agencies to determine a potential path forward for setrusumab in pediatric OI patients. These interactions have focused on understanding the necessary data to support a regulatory filing and if there is a potential path forward.
Data from pre- and post-hoc analyses from both the Orbit and Cosmic studies were presented at the 2026 ASBMR Annual Meeting held in October. These data included baseline characteristics, as well as annual fracture rate (AFR) analyses in certain patient subgroups. These pre- and post-hoc analyses on total fractures in patients enrolled with at least 3 fractures in the prior 2 years showed a meaningful benefit on fractures, bone mineral density and other endpoints in the two Phase 3 studies.
Alvelestat (MPH-966) for alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD)
In August, Mereo announced an option and license agreement with Sentynl Therapeutics, Inc. (Sentynl), a wholly owned subsidiary of Zydus Lifesciences Limited, which granted Sentynl the right to acquire a license for the U.S. commercial and global manufacturing rights to alvelestat for AATD-LD.
Should Sentynl exercise its option during the short option period, Mereo would receive $40 million in upfront and R&D payments which would provide funding for the Phase 3 study. Mereo would also be eligible to receive up to $435 million in regulatory and commercial milestones, as well as double-digit tiered royalties on U.S. net sales of alvelestat. Mereo will lead the global Phase 3 study and all regulatory interactions until study completion.
Since signing the option and license agreement, the companies have been collaborating to streamline the design of the planned Phase 3 study. In parallel, Mereo has been working to be in a position to initiate the Phase 3 study in early 2027.
Based on ongoing FDA interactions, Mereo expects to provide an update before the end of the year.
Vantictumab (OMP18R5) for autosomal dominant osteopetrosis type 2 (ADO2)
āshibio, Inc. (āshibio), Mereo’s development and commercial partner for vantictumab, reported clinical biomarker data from a legacy study of vantictumab in patients with cancer at the 2026 ASBMR Annual Meeting.
These data showed that low doses of vantictumab (0.5-5mg/kg) administered once weekly or once every two or three weeks, increased osteoclast activity without inhibiting osteoblast activity at these low doses.
Results were consistent with the findings from an ADO2 mouse study presented by āshibio at the 2025 ASBMR Annual Meeting showing that low doses of vantictumab increased osteoclast activity and rescued the osteopetrotic bone phenotype in this animal model.
āshibio is continuing to advance vantictumab toward clinical trials in patients with ADO2 and intends to initiate trials in the first half of 2028.
Third Quarter 2026 Financial Results
Total research and development ("R&D") expenses decreased by $2.2 million, from $4.3 million in the third quarter of 2025 to $2.1 million in the third quarter of 2026. The decrease was primarily due to reductions of $1.6 million in R&D expenses for setrusumab and $0.4 million for alvelestat. The decrease in program expenses for setrusumab was primarily driven by reductions of, and delays to, investment in manufacturing and ongoing activities, including medical affairs activities in Europe during the third quarter of 2026. The decrease in program expenses for alvelestat was primarily due to the completion of activities undertaken in 2025 in preparation for a potential Phase 3 study.
General and administrative ("G&A") expenses decreased by $1.1 million, from $6.0 million in the third quarter of 2025 to $4.9 million in the third quarter of 2026. The decrease was primarily due to reductions in investment in pre-commercial activities to lay the foundation for the potential commercial launch of setrusumab in Europe, and other realized net cost savings.
Net loss for the third quarter of 2026 was $5.9 million, compared to $7.0 million for the third quarter of 2025, primarily reflecting reductions in R&D and G&A expenses, partially offset by a lower net foreign currency translation gain.
As of September 30, 2026, the Company had cash and cash equivalents of $26.1 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 September 30, 2026 were 798,454,864. Total ADS equivalents as of September 30, 2026 were 159,690,972, with each ADS representing five ordinary shares of the Company.
(Press release, Mereo BioPharma, NOV 9, 2026, View Source [SID1234674528])