TIDMMPH
RNS Number : 9047U
Mereo BioPharma Group plc
30 October 2017
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER
THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF
THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN
Mereo BioPharma Group plc
("Mereo" or "Mereo BioPharma" or the "Company" or the
"Group")
Mereo BioPharma announces agreement with AstraZeneca AB
("AstraZeneca")
for an exclusive license and option to acquire AZD9668
Highlights
-- Potential novel oral therapy for the orphan disease alpha-1 antitrypsin deficiency
-- Substantive and supportive clinical data package available
from studies in linked respiratory diseases; c.1,000 patients have
been treated with the drug with positive data on safety, tolerance
and efficacy
-- Initial upfront consideration and planned Phase II study to
be funded from the Company's existing resources
-- AstraZeneca to become a shareholder in Mereo
London, 30 October 2017 - Mereo BioPharma Group plc (AIM: MPH),
a clinical stage, UK-based, biopharmaceutical company focused on
rare and specialty diseases, today announces that it has reached an
agreement with AstraZeneca for an exclusive license, including an
option to acquire, AZD9668, an oral inhibitor of neutrophil
elastase. Under the exclusive license the Company plans to conduct
a Phase II study for the treatment of alpha-1 antitrypsin
deficiency ("AATD"), a congenital orphan condition. The Company has
the right to exercise its option to acquire AZD9668 after the
initiation of pivotal studies.
Denise Scots-Knight, CEO of Mereo BioPharma Group plc
commented:
"We are delighted to have closed this agreement with AstraZeneca
for AZD9668 in furtherance of our stated strategy of building a
portfolio of products focussed on rare and speciality diseases. We
believe that this neutrophil elastase inhibitor has potential as an
effective, orally available treatment for alpha-1 antitrypsin
deficiency, an undertreated orphan condition that results in
progressive lung destruction. The structure of this license and
option agreement allows us to complete the Phase II study with our
existing resources before triggering additional payments to acquire
the asset outright."
"AstraZeneca has generated a substantial clinical data package
on AZD9668 which includes extensive Phase II studies in several
respiratory conditions that will inform the initial Phase II
clinical study we are planning for AATD. We believe that the
neutrophil elastase inhibitor AZD9668 could provide a new
innovative approach for the treatment of AATD, which affects
approximately 100,000 patients in the US and 120,000 patients in
Europe."
"As part of this agreement, we also welcome AstraZeneca as
another large pharma shareholder in the Company, alongside
Novartis."
Kumar Srinivasan, Vice President of Scientific Partnering &
Alliances at AstraZeneca added:
"This transaction reaffirms AstraZeneca's commitment to patients
by re-positioning an asset into an orphan indication with a high
unmet need. We will continue to divest or out-license deprioritized
assets where we believe it will help accelerate the development of
new medicines."
Professor Sandy Sandhaus MD, PhD, FCCP said:
"Alpha-1 antitrypsin deficiency is a debilitating disease with
limited treatment options. Available data to date suggests AZD9668
may be effective in treating this condition. I welcome Mereo's
clinical development programme that will evaluate its potential in
this setting."
Robert A. (Sandy) Sandhaus, MD, PhD, FCCP is Professor of
Medicine at National Jewish Health in Denver CO and a leading
expert in the treatment of AATD. He is also the Medical Director at
AlphaNet, a patient advocacy organisation for patients with AATD,
and Clinical Director of the Alpha-1 Foundation that promotes
research and development of new therapies for the treatment of
AATD.
A conference call for analysts will be held today at 1pm GMT see
below for details.
Outline of deal terms
Mereo has acquired the license and option to acquire AZD9668 for
an initial upfront payment totalling USD $5 million, in a
combination of USD $3 million in cash and the issue of 490,798 new
ordinary shares in the capital of the Company ("New Ordinary
Shares") to satisfy the balance of the upfront payment.
Additional deferred payments in cash and in new ordinary shares
would be payable on certain milestones based on completion and
success of the proof of concept study in AATD and upon the
initiation of a potentially pivotal study in this indication.
Additional global filing and approval milestones are payable
following successful pivotal data. Under the agreement, following
product launch, if approved, the Company will pay AstraZeneca
commercial milestones, sales-related payments and royalties, each
in line with rates for analogous licensing deals for drugs at this
stage of development.
The cash element of the upfront payment for the option purchase
and the initial Phase II study will be funded from the Company's
existing financial resources.
Application will be made for the New Ordinary Shares to be
admitted to trading on the AIM market operated by the London Stock
Exchange and admission is expected to become effective and dealings
in the New Ordinary Shares on the London Stock Exchange are
expected to commence on or around 3 November 2017. The New Ordinary
Shares, when issued, will rank pari passu with the existing
ordinary shares in the capital of the Company.
Following the issue of the New Ordinary Shares, which is
expected to take place later today, the total number of shares in
issue will be 71,094,974 ordinary shares, each with voting rights.
Therefore, the total number of voting rights in the Company with
effect from such date will be 71,094,974. This figure may be used
from such date by shareholders in the Company as the denominator
for the calculations by which they will determine if they are
required to notify their interest, or a change to their interest,
in the Company under the Financial Conduct Authority's Disclosure
Guidance and Transparency Rules.
About AATD
AATD is a genetic disorder that affects approximately 100,000
patients in the United States and 120,000 patients in Europe
[rarediseases.org/rare-diseases/alpha-1-antitrypsin-deficiency]. It
can cause severe debilitating conditions such as chronic liver
disease but, most notably, pulmonary emphysema, which is a
life-threatening disease. Pulmonary emphysema results in
irreversible destruction of the tissues supporting the function of
the lungs and causing severe shortness of breath and wheeze.
Patients typically present between the ages of 20 and 50 and have
both a significantly reduced quality of life and a reduced life
expectancy.
The lung damage in AATD results from loss of the normal
protective effect of alpha-1 antitrypsin against the damaging
enzymes released during inflammation, specifically neutrophil
elastase.
Current standard of care for AATD varies from country to
country. Protein replacement therapy, involving weekly infusions of
plasma-derived alpha 1 antitrypsin is approved but is only
reimbursed in the United States and some European countries. By
suppressing neutrophil elastase through a more easily administered
oral treatment, Mereo believes AZD9668 has significant
differentiation from the current protein replacement therapy.
AstraZeneca has conducted a number of Phase I and Phase II
clinical studies with AZD9668 in respiratory conditions that share
some common pathology with AATD, specifically chronic obstructive
pulmonary disease ("COPD"), cystic fibrosis and bronchiectasis.
Approximately 1,000 patients have been treated with the drug in
clinical studies to date. These studies have shown AZD9668 to be
safe and well-tolerated. They have also generated signals of
efficacy in lung function and biomarker data that are consistent
with an elastase-mediated mechanism of action.
Mereo intends to initiate a Phase II study in AATD in 2018. This
Phase II study is expected to be a 12-week randomized, placebo
controlled, study that will evaluate two doses of AZD9668 in
approximately 150 patients with the PiZZ and NULL genetic
mutations. These mutations are seen in the more severely affected
patients who have very low (PiZZ) or zero (NULL) alpha-1
antitrypsin levels. Mereo expects to leverage the internal
expertise and respiratory disease key opinion leader network that
it has assembled for the development of acumapimod to develop
AZD9668.
Analyst conference call
A conference call for analysts will be held today at 1pm GMT. To
participate please dial:
United Kingdom: +44 3333000804
United States: +1 6319131422
PIN: 33714203#
For Further Enquiries:
Mereo BioPharma Group plc +44 (0)333 023 7319
Denise Scots-Knight, Chief
Executive Officer
Richard Jones, Chief Financial
Officer
Nominated Adviser and Joint
Broker
Cantor Fitzgerald Europe +44 (0)20 7894 7000
Phil Davies
Will Goode
Joint Broker
RBC Capital Markets +44 (0)20 7653 4000
Rupert Walford
Laura White
Public Relations Adviser to
Mereo BioPharma
FTI Consulting +44 (0)20 3727 1000
Ben Atwell
Simon Conway
Brett Pollard
US Public Relations Advisor
to Mereo BioPharma +01 (0) 212 213
Burns McClellan 0006
Lisa Burns
Steven Klass
About Mereo
Mereo BioPharma is an innovative biopharma company established
to address the R&D and financial challenges faced by an
increasing number of large pharma and biotech companies. Mereo
focuses on developing and optimizing the value of novel medicines
acquired from large pharma and biotech designed to address
significant unmet medical needs in rare and specialty disease
areas.
Mereo is comprised of a strong team with broad operational
capabilities and the financial resources to conduct comprehensive
clinical studies. The Company plans to build a rare and orphan
commercial business combined with plans to partner where
appropriate.
Mereo's existing portfolio consists of three mid-late stage
clinical assets that were acquired from Novartis in July 2015 each
with proof of concept data in the indication that Mereo is now
developing. BPS-804 is being developed for the prevention of
fractures resulting from osteogenesis imperfecta (brittle bone
disease); acumapimod (BCT-197), is being developed to treat
inflammation in patients with an AECOPD; and BGS-649 is a
once-weekly oral novel therapy that restores the patient's own
testosterone in men with hypogonadotropic hypogonadism.
In H1 2016 the Company initiated a Phase 2 study with acumapimod
and a Phase 2b study with BGS-649. Mereo recently announced
commencement of the first potentially pivotal Phase 2b trial for
BPS-804 and completion of enrolment of both the acumapimod Phase 2
study and the BGS-649 Phase 2b study. The acquisition of AZD9668 is
in furtherance of the Company's objective to build a portfolio of
additional rare and specialty products acquired from large
pharmaceutical and biotechnology companies. The Company continues
to actively evaluate other opportunities with this product
profile.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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