On May 13, 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 first quarter ended March 31, 2025, and provided recent corporate highlights (Press release, Mereo BioPharma, MAY 13, 2025, View Source [SID1234652982]).

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"As we close out the first quarter of 2025, we continue to anticipate this will be an important, milestone-rich year for Mereo. The Phase 3 Orbit study of setrusumab in osteogenesis imperfecta remains on track to read-out either at the second interim analysis in mid-2025 or at the final analysis in the fourth quarter. We are continuing to invest in the pre-commercial activities for setrusumab to enable a successful launch in our European territory, following potential regulatory approvals," said Dr. Denise Scots-Knight, Chief Executive Officer of Mereo. "Further, alvelestat is now Phase 3 ready and we are finalizing the trial start-up activities to support our ongoing partnering process. Along with our late-stage pipeline, we believe that continued close management of our cash balance will enable us to support our operations into 2027."

First Quarter 2025 Highlights, Recent Developments, and Anticipated Milestones

Setrusumab (UX143)

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Continued progress in the two global Phase 3 studies led by our partner Ultragenyx:
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The randomized, placebo-controlled Phase 3 portion of the Orbit study (in patients aged 5 to 25 years) is progressing toward a second interim analysis (IA2) in mid-2025 or a final analysis in the fourth quarter of 2025. All patients have now been on therapy for at least 12 months, conduct of the study is going well and patient safety in the Phase 3 portion of the study is consistent with safety observed in the Phase 2.
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Patients in the Cosmic study (aged 2 to <7 years) are being treated with either setrusumab or intravenous bisphosphonates (IV-BP) therapy and will be evaluated in parallel with the Orbit interim analysis. If Orbit progresses to full study completion in the fourth quarter of 2025, Cosmic will also continue to a data read-out, to align with the Orbit read-out without spending alpha at the mid-year interim assessment.
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Continued pre-commercial activities in Europe to support potential launch, including engagement with regulatory/HTA bodies and real-world data collection efforts through the SATURN program.

Alvelestat (MPH-966)

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In first quarter of 2025, the European Commission granted Orphan Designation to alvelestat for the treatment of alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD). This adds to existing US FDA Orphan Drug and Fast Track designations.
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The start-up activities for the planned single, global Phase 3 pivotal study are ongoing.
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The Company remains in discussion with multiple potential development and commercialization partners.

First Quarter 2025 Financial Results

Total research and development ("R&D") expenses decreased by $0.1 million from $4.0 million in the first quarter of 2024 to $3.9 million in the first quarter of 2025. The decrease was primarily due to decreases of $1.2 million and $0.1 million in R&D expenses for alvelestat and etigilimab, offset by an increase of $1.3 million in R&D expenses for setrusumab. The decrease in program expenses for alvelestat was primarily due to undertaking reduced drug formulation and manufacturing activities in preparation for the Phase 3 study in the first quarter of 2025, compared to the first quarter of 2024. The increase in program expenses for setrusumab was primarily driven by amounts due under the manufacturing and supply agreement with our partner, Ultragenyx, ongoing activities related to real-world evidence programs and medical affairs activities in Europe and input into development, regulatory and manufacturing plans with Ultragenyx, who fund the global development of the program pursuant to our license and collaboration agreement.

General and administrative expenses increased by $1.4 million from $5.9 million in the first quarter of 2024 to $7.3 million in the first quarter of 2025. The increase was primarily due to the recognition of a $1.7 million reduction in expenses in the first quarter of 2024 for amounts received from our depository to reimburse certain expenses incurred by us in respect of our ADR program, partially offset by a net decrease in employee-related expenses and professional fees. A reimbursement in respect of our ADR program is anticipated in 2025.

Net loss for the first quarter of 2025 was $12.9 million, compared to $9.0 million during the first quarter of 2024, primarily reflecting an operating loss of $11.2 million and foreign currency translation loss.

As of March 31, 2025, the Company had cash and cash equivalents of $62.5 million, compared to $69.8 million as of December 31, 2024. 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 March 31, 2025 were 795,001,444. Total ADS equivalents as of March 31, 2025 were 159,000,288, with each ADS representing five ordinary shares of the Company.