Mereo BioPharma(MREO) - 2025 Q2 - Quarterly Results

Executive Summary & Corporate Update Introduction & Key Headlines Mereo BioPharma reported Q2 2025 results, anticipating setrusumab Phase 3 data by year-end, with cash into 2027 - Mereo BioPharma announced Q2 2025 financial results and corporate highlights[1] - Phase 3 Orbit and Cosmic studies for setrusumab in osteogenesis imperfecta (OI) are expected to release data around year-end 2025[1] Cash Position (June 30, 2025) | Metric | Amount (Millions USD) | | :----- | :-------------------- | | Cash | $56.1 | - Existing cash is expected to support operations into 2027[1] CEO Commentary CEO anticipates setrusumab Phase 3 results, notes alvelestat partnering, and confirms strong financials - CEO anticipates final analysis for setrusumab's Phase 3 Orbit and Cosmic studies around year-end, highlighting its potential to reduce fractures and improve functional parameters for OI patients[2] - Partnering discussions for alvelestat, a first-in-class oral small molecule for AATD-lung disease, are advancing, with preparations for Phase 3 initiation underway[2] - Prudent cash and resource management positions the company well to support operations into 2027 through key milestones[2] Operational Highlights & Milestones Setrusumab (UX143) for osteogenesis imperfecta (OI) Program Update Setrusumab Phase 3 studies advance to year-end 2025 final analyses; interim safety confirmed - Phase 3 Orbit and Cosmic studies for setrusumab are progressing towards final analyses around the end of 2025[5] - The Data Monitoring Committee evaluated the Orbit study at an interim analysis in July 2025, confirming an acceptable safety profile and recommending continuation to final analysis[5] - Pre-commercial efforts continue in Europe, including the SATURN program to understand natural history and unmet medical needs in OI, and activities to define the treatment landscape[5] Alvelestat (MPH-966) for alpha-1-anti-trypsin deficiency lung disease (AATD-LD) Program Update Alvelestat's global Phase 3 study initiation is underway, with active partnering discussions - Activities to support the initiation of the planned single, global Phase 3 pivotal study for alvelestat are ongoing[5] - The Company continues to be actively engaged with multiple potential partners regarding development and commercialization of alvelestat[5] Second Quarter 2025 Financial Review Revenue Mereo BioPharma recognized $0.5 million Q2 2025 revenue from a leflutrozole milestone, up from zero in 2024 Revenue (Three Months Ended June 30) | Metric | 2025 (Thousands USD) | 2024 (Thousands USD) | Change (YoY) | | :------ | :------------------- | :------------------- | :----------- | | Revenue | $500 | $0 | +$500 | - Revenue in Q2 2025 included a $0.5 million one-time milestone payment for the achievement of a clinical milestone on leflutrozole[7] Operating Expenses Q2 2025 R&D expenses rose to $5.4 million (setrusumab), G&A fell to $5.5 million (reimbursement, fees) Research and Development (R&D) Expenses (Three Months Ended June 30) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | R&D | $5.4 | $4.9 | +$0.4 | - Increase in R&D expenses was primarily due to a $2.2 million increase for setrusumab, offset by decreases of $1.5 million for alvelestat and $0.2 million for etigilimab[4] - Increased setrusumab expenses were driven by manufacturing and supply agreement amounts with Ultragenyx, and ongoing real-world evidence and medical affairs activities in Europe[4] General and Administrative (G&A) Expenses (Three Months Ended June 30) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | G&A | $5.5 | $7.9 | -$2.4 | - Decrease in G&A expenses was primarily due to a $1.9 million reduction from reimbursement for ADR program expenses and lower professional fees[5][6] Net Loss Q2 2025 net loss rose to $14.6 million due to foreign currency loss and R&D, partially offset by G&A and revenue Net Loss (Three Months Ended June 30) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (YoY) | | :------- | :------------------ | :------------------ | :----------- | | Net Loss | $(14.6) | $(12.3) | $(2.3) | - The increase in net loss was primarily due to a $5.4 million foreign currency transaction loss and increased R&D expenses[7] - The increase in net loss was partially offset by a decrease in G&A expenses and $0.5 million in revenue from a leflutrozole milestone payment[7] Cash Position and Outlook Cash was $56.1 million as of June 30, 2025, projected to fund operations into 2027 Cash and Cash Equivalents | Date | Amount (Millions USD) | | :------------- | :-------------------- | | June 30, 2025 | $56.1 | | Dec 31, 2024 | $69.8 | - The Company's guidance remains unchanged, expecting existing cash to fund clinical trials, operating expenses, and capital expenditure requirements into 2027[8] - This guidance excludes any payments associated with a potential partnership for alvelestat or business development activity around non-core programs[8] Share Information As of June 30, 2025, Mereo BioPharma had 795 million ordinary shares issued, equivalent to 159 million ADSs Shares Issued (June 30, 2025) | Metric | Count | | :---------------------- | :------------ | | Ordinary Shares | 795,001,444 | | ADS Equivalents | 159,000,288 | | Ordinary Shares per ADS | 5 | About Mereo BioPharma Mereo BioPharma is a clinical-stage biopharmaceutical company focused on rare diseases, with key candidates and strategic partnerships - Mereo BioPharma is a clinical-stage biopharmaceutical company focused on developing innovative therapeutics for rare diseases[10] - Key product candidates include setrusumab for osteogenesis imperfecta (OI) and alvelestat for alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD)[10] - Setrusumab has received Orphan Designation (EC, FDA), PRIME designation (EMA), Breakthrough Therapy designation (FDA), and rare pediatric disease designation (FDA)[10] - Alvelestat has received Orphan Designation (EC, FDA) and Fast Track designation (FDA) for AATD-LD[10] - The company has partnerships with Ultragenyx for setrusumab (potential milestones up to $245M plus royalties) and Feng Biosciences for navicixizumab[10] Forward-Looking Statements This section contains standard forward-looking statements, which involve substantial risks and uncertainties - The press release contains forward-looking statements involving substantial risks and uncertainties, identified by words like 'believe,' 'expect,' 'anticipate,' and similar expressions[11] - These statements are based on current expectations, beliefs, and assumptions, but actual results could differ materially due to known and unknown risks[11](index=11&type=