Mereo BioPharma Group plc (NASDAQ: MREO) (“Mereo” or the
“Company”), a clinical-stage biopharmaceutical company focused on
rare diseases, today announced its unaudited interim financial
results for the six months ended June 30, 2023 and provided an
update on recent corporate highlights.
“The first half of 2023 was highlighted by
significant updates on each of our lead rare disease programs, as
we announced, alongside our partner Ultragenyx, positive data from
the dose-selection Phase 2 portion of the Phase 2/3 Orbit study of
setrusumab in osteogenesis imperfecta (OI), and we received
regulatory guidance around the pivotal study design for alvelestat
in Alpha-1 Antitrypsin Deficiency-Associated Lung Disease
(AATD-LD),” said Dr. Denise Scots-Knight, Chief Executive Officer
of Mereo. “With the two Phase 3 setrusumab studies underway, which
triggered a $9 million milestone payment from Ultragenyx, and with
continued progress being made on the alvelestat program, we believe
we are well positioned with several important potentially value
creating inflection points expected in the coming quarters. With
cash and short-term deposits of $53.1 million (£42.1 million) as of
June 30, 2023, and with the subsequent milestone payment from our
partner Ultragenyx, plus the sale of common stock under our
at-the-market offering program, we continue to expect that we have
sufficient runway to fund operations into 2026.”
First Half 2023 Highlights, Recent
Developments and Anticipated Milestones
Setrusumab (UX143)
- With our partner Ultragenyx, we
reported positive data from the Phase 2 portion of the Phase 2/3
Orbit study of setrusumab in OI patients aged five to <26 years
old. Setrusumab demonstrated statistically significant increases in
levels of serum P1NP, a sensitive marker of bone formation, and a
substantial and significant improvement in bone mineral density
(BMD) by 3 months in these pediatric patients. All 24 patients are
now enrolled in a Phase 2 open-label extension study, with
additional data expected to be shared by Ultragenyx in mid-October
2023.
- Ultragenyx dosed the first patients
in both registrational trials evaluating setrusumab in pediatric
and young adult patients with OI – the Phase 3 portion of the Orbit
study in patients aged 5 to <26 years old and the Phase 3 Cosmic
study in patients aged 2 to <7 years old.
- The IMPACT Survey, a research
initiative led by the Osteogenesis Imperfecta Federation Europe
(OIFE), the OI Foundation and Mereo exploring the impact of OI on
people’s lives, will publish additional data over the next several
months. The survey was designed to capture data supporting the
availability of potential future treatments for OI.
Alvelestat (MPH-966)
- We received clear guidance from the
U.S. Food and Drug Administration (FDA) and European Medicines
Agency (EMA) that a single, global, 12-18 month placebo-controlled
Phase 3 study in approximately 200 patients, if successful, could
be sufficient to support full marketing approvals of alvelestat for
AATD-LD in both the United States (U.S.) and European Union
(EU).
- The independent primary endpoints
of the proposed Phase 3 study are the change in a Patient-Reported
Outcome (PRO) as guided by the FDA, which is proposed to be the St.
George’s Respiratory Questionnaire (SGRQ) Activity domain, and
change in lung density measured by CT scan, as guided by the
EMA.
- Two abstracts were presented in an
oral and a poster session, respectively, at the American Thoracic
Society (ATS) 2023 annual meeting in May 2023.
- Data from the ongoing
placebo-controlled Phase 2 investigator-led study in AATD-LD
(ATALANTa), studying the 120mg dose of alvelestat including in
patients who may be on augmentation therapy, is expected in the
coming weeks.
Etigilimab (MPH-313)
- The
Phase 1b portion of the ACTIVATE open-label trial investigating
etigilimab (anti-TIGIT) in combination with nivolumab has been
completed. The basket study enrolled 76 patients in a range of
tumor types not typically responsive to anti-PD(L)-1 monotherapy
including gynecologic and rare tumors. Preliminary efficacy data,
showing that some patients achieved clinical benefit associated
with prolonged duration on study, supports continued evaluation in
tumor types not typically responsive to anti-PD(L)1
monotherapy.
- An
abstract entitled “Safety and efficacy of etigilimab with nivolumab
in select recurrent/advanced solid tumors” has been accepted for a
mini-oral presentation at the upcoming European Society for Medical
Oncology (ESMO) Annual Meeting, being held October 20-24, 2023 in
Madrid, Spain.
-
Etigilimab, in combination with nivolumab, is also being studied in
an ongoing investigator-led single-arm, two-stage, open-label Phase
1b/2 trial in a subtype of platinum-resistant recurrent ovarian
cancer (clear cell ovarian cancer) at the MD Anderson Cancer
Center, financed by the Cancer Focus Fund with the next stage being
the expected expansion of enrollment from the initial 10 patients
to 20 patients.
First Half 2023 Financial
Results
Revenue was £7.1 million ($9.0 million) for the
six months ended June 30, 2023, representing a one-time milestone
payment upon dosing of the first patient in the Phase 3 portion of
the Orbit study in patients aged five to under 26 in accordance
with the collaboration and license agreement with Ultragenyx. This
payment was received in July 2023.
Total research and development expenses
decreased by £5.4 million, or 41%, from £13.3 million for the six
months ended June 30, 2022 to £7.9 million for the six months ended
June 30, 2023. R&D expenses relating to etigilimab decreased by
£4.4 million. The decrease was primarily due to the winding down of
the open label Phase 1b/2 basket study in combination with an
anti-PD-1 in a range of tumor types. R&D expenses relating to
alvelestat decreased by £0.9 million. R&D expenses for the
six-month periods ended June 30, 2023 and 2022 were primarily
related to activities associated with the preparation for the Phase
3 study of alvelestat including CMC and drug formulation
activities, and costs associated with the completion of the Phase 2
proof-of-concept study in AATD-LD, respectively. R&D expenses
relating to setrusumab decreased by £0.4 million due to timing of
activities.
Administrative expenses increased by £0.7
million, or 8%, from £8.8 million for the six months ended June 30,
2022 to £9.5 million for the six months ended June 30, 2023. This
increase was principally due to professional fees associated with
various corporate transactions in the period.
Net loss attributable to equity holders for the
six months ended June 30, 2023 was £11.0 million, compared to £19.2
million during the comparable period in 2022, primarily reflecting
an operating loss of £9.9 million and net foreign exchange loss of
£1.4 million.
As of June 30, 2023, the Company had cash and
short-term deposits of £42.1 million ($53.1 million). In July 2023,
the Company received a $9.0 million (£7.1 million) milestone
payment from its partner, Ultragenyx and gross proceeds of $12.0
million (£9.3 million) through an “at-the-market” offering pursuant
to an Open Market Sale Agreement with Jefferies LLC.
The Company’s guidance remains unchanged at this
point, and it continues to expect that its existing cash and
short-term deposits will enable it to fund its currently committed
clinical trials, operating expenses and capital expenditure
requirements into 2026.
Total ordinary shares outstanding at August
31, 2023 were 701,217,089. Total ADS equivalents at August 31,
2023 were 140,176,617, with each ADS representing five ordinary
shares of the Company.
About Mereo BioPharma
Mereo BioPharma is a biopharmaceutical company
focused on the development of innovative therapeutics for rare
diseases. The Company has two rare disease product candidates,
setrusumab for the treatment of osteogenesis imperfecta (OI) and
alvelestat primarily for the treatment of severe
alpha-1-antitrypsin deficiency-associated lung disease (AATD-LD).
The Company’s partner, Ultragenyx Pharmaceutical, Inc., has
initiated a pivotal Phase 2/3 pediatric study in young adults (5 to
<26 years old) for setrusumab in OI and a Phase 3 study in
pediatric patients (2 to <7 years old) in the first half of
2023. The partnership with Ultragenyx includes potential milestone
payments of up to $245 million (following the recent $9 million
milestone) and royalties to Mereo on commercial sales in Ultragenyx
territories. Mereo has retained EU and UK commercial rights and
will pay Ultragenyx royalties on commercial sales in those
territories. Setrusumab has received orphan designation for
osteogenesis imperfecta from the EMA and FDA, PRIME designation
from the EMA and has pediatric disease designation from the FDA.
Alvelestat has received U.S. Orphan Drug Designation for the
treatment of AATD, Fast Track designation from the FDA, and
positive data were reported from a Phase 2 proof-of-concept study
in North America, Europe and the UK. In addition to the rare
disease programs, Mereo has two oncology product candidates in
clinical development. Etigilimab (anti-TIGIT) has completed a Phase
1b/2 basket study evaluating its safety and efficacy in combination
with an anti-PD-1 in a range of tumor types including three rare
tumors and three gynecological carcinomas - cervical, ovarian, and
endometrial and is an ongoing Phase 1b/2 investigator led study at
the MD Anderson Cancer Center in clear cell ovarian cancer;
Navicixizumab, for the treatment of late line ovarian cancer, has
completed a Phase 1 study and has been partnered with OncXerna
Therapeutics, Inc. in a global licensing agreement that includes
payments of up to $300 million in milestones and royalties.
Forward-Looking Statements
This press release contains “forward-looking
statements,” including the Company’s expectations regarding its
proposed Phase 3 study evaluating a single dose of alvelestat
versus placebo, the expectations regarding a study in pediatric
patients evaluating setrusumab, and the Company’s pipeline of
product candidates. All statements other than statements of
historical fact contained in this press release are forward-looking
statements within the meaning of Section 27A of the U.S Securities
Act of 1933, as amended, and Section 21E of the U.S Securities
Exchange Act of 1934, as amended. Forward-looking statements
usually relate to future events and anticipated revenues, earnings,
cash flows or other aspects of our operations or operating results.
Forward-looking statements are often identified by the words
“believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,”
“should,” “would,” “could,” “may,” “estimate,” “outlook” and
similar expressions, including the negative thereof. The absence of
these words, however, does not mean that the statements are not
forward-looking. These forward-looking statements are based on the
Company’s current expectations, beliefs and assumptions concerning
future developments and business conditions and their potential
effect on the Company. While management believes that these
forward-looking statements are reasonable as and when made, there
can be no assurance that future developments affecting the Company
will be those that it anticipates. All of the Company’s
forward-looking statements involve known and unknown risks and
uncertainties some of which are significant or beyond its control
and assumptions that could cause actual results to differ
materially from the Company’s historical experience and its present
expectations or projections. Such risks and uncertainties include,
among others, the uncertainties inherent in the clinical
development process; the Company’s reliance on third parties to
conduct and provide funding for its clinical trials; the Company’s
dependence on enrolment of patients in its clinical trials; and the
Company’s dependence on its key executives. You should carefully
consider the foregoing factors and the other risks and
uncertainties that affect the Company’s business, including those
described in the “Risk Factors” section of its latest Annual Report
on Form 20-F, reports on Form 6-K and other documents furnished or
filed from time to time by the Company with the Securities and
Exchange Commission. The Company wishes to caution you not to place
undue reliance on any forward-looking statements, which speak only
as of the date hereof. The Company undertakes no obligation to
publicly update or revise any of our forward-looking statements
after the date they are made, whether as a result of new
information, future events or otherwise, except to the extent
required by law.
Mereo BioPharma Contacts: |
|
|
Mereo |
|
+44 (0)333 023 7300 |
Denise Scots-Knight, Chief Executive Officer |
|
|
Christine Fox, Chief Financial Officer |
|
|
|
Burns McClellan (Investor Relations Adviser to
Mereo) |
|
+01 646 930 4406 |
Lee Roth |
|
|
Investors |
|
investors@mereobiopharma.com |
Consolidated Statements of Comprehensive
Loss
|
Six months ended June
30,2023£’000 |
Six months ended June
30,2022£’000 |
Revenue |
7,128 |
|
- |
|
Cost of revenue |
(2,455) |
|
352 |
|
Research and development expenses |
(7,898) |
|
(13,322) |
|
Administrative expenses |
(9,548) |
|
(8,840) |
|
Other operating income |
2,864 |
|
- |
|
Operating loss |
(9,909) |
|
(21,810) |
|
Finance income |
550 |
|
173 |
|
Finance costs |
(1,498) |
|
(1,859) |
|
Changes in the fair value of financial instruments |
365 |
|
1,210 |
|
Net foreign exchange (loss)/gain |
(1,445) |
|
1,582 |
|
Other income |
- |
|
811 |
|
Loss before tax |
(11,937) |
|
(19,893) |
|
Taxation |
907 |
|
735 |
|
Loss for the period, attributable to equity holders of the
parent |
(11,030) |
|
(19,158) |
|
Items that may be reclassified subsequently to profit or loss: |
|
|
Currency translation of foreign operations |
1,493 |
|
(1,775) |
|
Total comprehensive loss for the period, attributable to
equity holders of the parent |
(9,537) |
|
(20,933) |
|
Basic loss per share for the period (in £) |
(0.02) |
|
(0.03) |
|
Diluted loss per share for the period (in £) |
(0.02) |
|
(0.03) |
|
Consolidated Balance Sheets
|
June 30, 2023£’000 |
December 31, 2022£’000 |
Assets |
|
|
Non-current assets |
|
|
Property, plant and equipment |
1,565 |
|
1,831 |
|
Intangible assets |
24,845 |
|
24,116 |
|
|
26,410 |
|
25,947 |
|
Current assets |
|
|
Prepayments |
1,376 |
|
3,125 |
|
R&D tax credits |
2,203 |
|
1,296 |
|
Other taxes receivable |
643 |
|
614 |
|
Trade and other receivables |
7,893 |
|
762 |
|
Cash and short-term deposits |
42,113 |
|
56,334 |
|
|
54,228 |
|
62,131 |
|
Total assets |
80,638 |
|
88,078 |
|
Equity and liabilities |
|
|
Non-current liabilities |
|
|
Provisions |
411 |
|
- |
|
Convertible loan notes |
3,665 |
|
- |
|
Warrant liability |
166 |
|
129 |
|
Lease liability |
973 |
|
1,222 |
|
Other liabilities |
220 |
|
182 |
|
|
5,435 |
|
1,533 |
|
Current liabilities |
|
|
Trade and other payables |
1,911 |
|
3,078 |
|
Accruals |
4,786 |
|
4,491 |
|
Provisions |
4,701 |
|
4,822 |
|
Convertible loan notes |
4,186 |
|
11,085 |
|
Warrant liability |
- |
|
402 |
|
Lease liability |
488 |
|
466 |
|
Other liabilities |
1,386 |
|
333 |
|
|
17,458 |
|
24,677 |
|
Total liabilities |
22,893 |
|
26,210 |
|
Net assets |
57,745 |
|
61,868 |
|
Equity |
|
|
Issued capital |
1,930 |
|
1,875 |
|
Share premium |
257,343 |
|
254,303 |
|
Other capital reserves |
134,999 |
|
132,680 |
|
Employee Benefit Trust shares |
(1,058 |
) |
(1,058 |
) |
Other reserves |
7,401 |
|
7,401 |
|
Accumulated losses |
(342,194 |
) |
(331,164 |
) |
Translation reserve |
(676 |
) |
(2,169 |
) |
Total equity |
57,745 |
|
61,868 |
|
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