Mereo BioPharma Reports Second Quarter 2025 Financial Results and Provides Corporate Highlights

Rhea-AI Summary

Mereo BioPharma (NASDAQ: MREO) has reported its Q2 2025 financial results and provided corporate updates. The company maintains a strong financial position with $56.1 million in cash as of June 30, 2025, expected to fund operations into 2027. Key highlights include the progression of two Phase 3 studies for setrusumab in osteogenesis imperfecta, with final analyses expected around year-end 2025.

Financial results show R&D expenses increased to $5.4 million in Q2 2025 from $4.9 million in Q2 2024, while G&A expenses decreased to $5.5 million from $7.9 million. The company reported a net loss of $14.6 million for Q2 2025, compared to $12.3 million in Q2 2024. The Orbit study's Data Monitoring Committee confirmed setrusumab's acceptable safety profile, allowing the study to proceed to final analysis.

Positive

• None.

Negative

• Net loss increased to $14.6M from $12.3M year-over-year
• R&D expenses increased by $0.4M compared to Q2 2024
• Significant foreign currency transaction loss of $5.4M

Insights

Biotech & Clinical Trials Expert

Mereo's Phase 3 setrusumab trials continue with positive safety profile and final readouts expected by year-end, with $56.1M cash runway into 2027.

Mereo BioPharma's second quarter results highlight continued progress in their rare disease pipeline with two critical Phase 3 readouts approaching. The company's lead asset setrusumab for osteogenesis imperfecta (OI) – a rare genetic bone disorder – recently passed a key safety review by the Data Monitoring Committee for the Phase 3 Orbit study, allowing the trial to proceed to final analysis. This positive safety signal is encouraging, though efficacy data remains pending.

Both the Orbit trial (in pediatric/young adult patients) and the Cosmic trial (in young pediatric patients) are approaching final analyses around year-end 2025, representing potential inflection points for Mereo. The statistical threshold for success has been set at p<0.04 for Orbit and p<0.05 for Cosmic, standard benchmarks that suggest the company is pursuing robust efficacy demonstrations.

While Ultragenyx leads global development, Mereo retains European commercial rights and is wisely laying groundwork through the SATURN program to collect natural history data and build health economic models – essential components for European regulatory approval and reimbursement discussions.

For alvelestat, their AATD-lung disease candidate, Mereo continues partnership discussions while preparing for Phase 3. The company has strategically reduced spending on this program ($1.5 million decrease) while maintaining development momentum, suggesting a disciplined approach to resource allocation while they seek a partner.

With $56.1 million in cash as of June 30 and a reduced quarterly burn rate, Mereo appears sufficiently funded through their key clinical milestones into 2027, providing valuable runway during a critical period for data readouts and potential partnership developments.

Financial Analyst

Mereo shows disciplined financial management with $56.1M runway into 2027, though Q2 net loss widened to $14.6M despite reduced G&A expenses.

Mereo's financial position demonstrates careful capital stewardship with $56.1 million in cash as of June 30, 2025, providing runway into 2027 – a critical buffer for a clinical-stage biotech facing pivotal data readouts. This extended cash runway gives the company significant operational flexibility through its upcoming Phase 3 readouts without immediate financing pressure.

The quarter's financial results show mixed signals. R&D expenses increased moderately by $0.4 million to $5.4 million, primarily driven by a $2.2 million increase in setrusumab-related expenses as the company ramps up European pre-commercial activities. This investment signals confidence in the program's potential commercial value in Europe, where Mereo retains rights.

Notably, the company achieved significant G&A expense reduction of $2.4 million (down to $5.5 million), partly through a $1.9 million reimbursement from their ADR program depository. This cost discipline is commendable, though the $14.6 million net loss (up from $12.3 million in Q2 2024) was impacted by a $5.4 million foreign currency transaction loss – highlighting the company's exposure to currency fluctuations.

Cash burn appears manageable, with a $13.7 million reduction in cash position from December 2024's $69.8 million. The company's strategy of seeking partnerships for alvelestat and focusing resources on setrusumab appears financially sound. Any partnership deal for alvelestat would represent upside to the current financial outlook, potentially extending runway further or accelerating development timelines.

Data from Phase 3 Orbit and Cosmic studies of setrusumab in osteogenesis imperfecta expected around year-end 2025

Cash of $56.1 million as of June 30, 2025, expected to support operations into 2027 

LONDON, Aug. 12, 2025 (GLOBE NEWSWIRE) -- Mereo BioPharma Group plc (NASDAQ: MREO) (“Mereo” or the “Company”), a clinical-stage biopharmaceutical company focused on rare diseases, today announced its financial results for the second quarter ended June 30, 2025, and provided recent corporate highlights. 

“We look forward to the final analysis for the two ongoing Phase 3 studies for setrusumab in osteogenesis imperfecta, the Phase 3 Orbit study in pediatric and young adult patients, and the Phase 3 Cosmic study in young pediatric patients, around the end of the year. We continue to be excited about the potential of setrusumab to reduce fractures and improve other functional parameters for individuals living with osteogenesis imperfecta,” said Dr. Denise Scots-Knight, Chief Executive Officer of Mereo. “In parallel with the advancement of setrusumab, we are continuing to advance partnering discussions around alvelestat, our first-in-class oral small molecule for AATD-lung disease, and to ready the program for Phase 3 initiation. Our prudent management of our cash and resources means we are well positioned through these key milestones to support our operations into 2027.”

Second Quarter 2025 Highlights, Recent Developments, and Anticipated Milestones 

Setrusumab (UX143) for osteogenesis imperfecta (OI)

• The Phase 3 Orbit and Cosmic studies, led by our partner Ultragenyx, evaluating setrusumab in pediatric and young adult patients and young pediatric patients with OI, are progressing towards their final analyses around the end of 2025. The randomized, placebo-controlled Phase 3 portion of the Orbit study was evaluated by the Data Monitoring Committee at an interim analysis in July 2025 and they informed Ultragenyx that setrusumab demonstrated an acceptable safety profile and that the study should continue to the final analysis. Data from the Cosmic study were not analyzed at the interim timepoint, consistent with the statistical analysis plan.

• Patients will continue dosing in both the Phase 3 Orbit and Cosmic studies, with the final analyses to be conducted after patients have been on therapy for at least 18-months. The threshold for the Phase 3 Orbit final analysis is p<0.04 and for the Phase 3 Cosmic final analysis is p<0.05.

• Pre-commercial efforts continue in Europe where Mereo holds commercial rights. These include continuation of the SATURN program, working with existing OI datasets to better understand the natural history and the unmet medical need in pediatrics and adults and to generate data to support the health economic model, both important to support the assessment by Regulatory and Health Technology Assessment (HTA) bodies and payors. In addition, the activities to define the treatment landscape, including the number of treatment centers and the patient journey from childhood to adulthood, are being extended beyond the five major countries in Europe.
  
  

Alvelestat (MPH-966) for alpha-1-anti-trypsin deficiency lung disease (AATD-LD)

• Activities to support initiation of the planned single, global Phase 3 pivotal study are ongoing.

• The Company continues to be actively engaged with multiple potential partners regarding development and commercialization of alvelestat.
  
  

Second Quarter 2025 Financial Results 

Total research and development (“R&D”) expenses increased by $0.4 million from $4.9 million in the three months ended June 30, 2024, to $5.4 million in the three months ended June 30, 2025. The increase was primarily due to increases of $2.2 million in R&D expenses for setrusumab offset by decreases of $1.5 million and $0.2 million in R&D expenses for alvelestat and etigilimab, respectively. The increase in program expenses for setrusumab was primarily driven by amounts due under the manufacturing and supply agreement with our partner, Ultragenyx, as well as ongoing activities related to real-world evidence programs and medical affairs activities in Europe. This is in addition to costs we incur in relation to our collaboration with Ultragenyx, who fund the global development of the program, including input into development, regulatory and manufacturing plans. The decrease in program expenses for alvelestat was primarily due to the completion of the drug formulation and manufacturing activities undertaken in preparation for the Phase 3 study in the three months ended June 30, 2024.

General and administrative (“G&A”) expenses decreased by $2.4 million from $7.9 million in the second quarter of 2024 to $5.5 million in the second quarter of 2025. The decrease was primarily due to the recognition of a $1.9 million reduction in expenses in the three months ended June 30, 2025 for amounts received from our depository to reimburse certain expenses incurred by us in respect of our ADR program as well as lower professional fees.

Net loss for the second quarter ended June 30, 2025 was $14.6 million, compared to $12.3 million during the comparable period in 2024, primarily reflecting a foreign currency transaction loss of $5.4 million and increases in R&D expenses, offset by a decrease in G&A expenses and $0.5 million in revenue from a one-time milestone payment for the achievement of a clinical milestone on leflutrozole.

As of June 30, 2025, the Company had cash and cash equivalents of $56.1 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 payments associated with a potential partnership for alvelestat or business development activity around any of the Company’s non-core programs. 

Total ordinary shares issued as of June 30, 2025, were 795,001,444. Total ADS equivalents as of June 30, 2025, were 159,000,288, 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 for the treatment of alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD). The Company’s partner, Ultragenyx Pharmaceutical, Inc., has completed enrollment in the Phase 3 portion of a pivotal Phase 2/3 study in pediatrics and young adults (5 to 25 years old) for setrusumab in OI and in the Phase 3 study in pediatric patients (2 to <7 years old). The partnership with Ultragenyx includes potential additional milestone payments of up to $245 million 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 European Commission (“EC”) and the FDA, PRIME designation from the EMA, and has Breakthrough Therapy designation and rare pediatric disease designation from the FDA. Alvelestat has received Orphan Designation for AATD from the EC and the FDA, and Fast Track designation from the FDA for AATD-LD. Following results from ASTRAEUS and ATALANTa in AATD-lung disease, the Company has aligned with the FDA and the EMA on the primary endpoints for a Phase 3 pivotal study which, if successful, could enable full approval in both the U.S. and Europe. Mereo has also entered into an exclusive global license agreement with ReproNovo SA, a reproductive medicine company, for the development and commercialization of leflutrozole, a non-steroidal aromatase inhibitor for the treatment of infertility in men with low testosterone. In addition, Mereo has two oncology product candidates, etigilimab, an anti-TIGIT; and navicixizumab for the potential treatment of late-line ovarian cancer. Navicixizumab has been partnered with Feng Biosciences, Inc. in a global licensing agreement that includes milestone payments and royalties.

Forward-Looking Statements

This press release contains “forward-looking statements” that involve substantial risks and uncertainties. All statements other than statements of historical fact contained herein are forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States 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 enrollment 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 Annual Report on Form 10-K, as well as discussions of potential risks, uncertainties, and other important factors in the Company’s subsequent filings 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

MEREO BIOPHARMA GROUP PLC CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) (Unaudited)
		June 30,				December 31,
		2025				2024
Assets
Current assets:
Cash and cash equivalents		$	56,125			$	69,802
Prepaid expenses and other current assets			2,545				2,175
Research and development incentives receivables			2,751				2,786
Total current assets			61,421				74,763
Property and equipment, net			218				257
Operating lease right-of-use assets, net			522				727
Intangible assets, net			470				643
Total assets		$	62,631			$	76,390
Liabilities
Current liabilities:
Accounts payable		$	1,138			$	2,440
Accrued expenses			5,041				4,071
Convertible loan notes – current			—				5,535
Operating lease liabilities – current			601				707
Other current liabilities			777				1,095
Total current liabilities			7,557				13,848
Warrant liabilities – non-current			545				821
Operating lease liabilities – non-current			—				187
Other non-current liabilities			352				565
Total liabilities		$	8,454			$	15,421
Shareholders’ Equity
Ordinary shares, par value £0.003 per share; 795,001,444 shares issued at June 30, 2025 (December 31, 2024: 775,728,034)		$	3,132			$	3,059
Additional paid-in capital			546,331				539,642
Accumulated deficit			(486,643	)			(462,883	)
Accumulated other comprehensive loss			(8,643	)			(18,849	)
Total shareholders’ equity			54,177				60,969
Total liabilities and shareholders’ equity		$	62,631			$	76,390

MEREO BIOPHARMA GROUP PLC CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except per share amounts) (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Revenue		$	500			$	—			$	500			$	—
Operating expenses
Cost of revenue			(132	)			—				(132	)			—
Research and development			(5,373	)			(4,946	)			(9,303	)			(8,939	)
General and administrative			(5,494	)			(7,868	)			(12,766	)			(13,777	)
Loss from operations			(10,499	)			(12,814	)			(21,701	)			(22,716	)
Other income/(expenses)
Interest income			589				559				1,248				1,175
Interest expense			(24	)			(331	)			(204	)			(641	)
Changes in the fair value of warrants			(101	)			(69	)			315				(517	)
Foreign currency transaction (loss)/gain, net			(5,326	)			31				(8,091	)			644
Benefit from research and development tax credit			745				369				930				847
Net loss before income tax			(14,616	)			(12,255	)			(27,503	)			(21,208	)
Income tax benefit			—				—				—				—
Net loss		$	(14,616	)		$	(12,255	)		$	(27,503	)		$	(21,208	)
Loss per share – basic and diluted		$	(0.02	)		$	(0.02	)		$	(0.03	)		$	(0.03	)
Weighted average shares outstanding – basic and diluted			799,435,329				711,770,804				794,022,295				706,407,371
Net loss		$	(14,616	)		$	(12,255	)		$	(27,503	)		$	(21,208	)
Other comprehensive income/(loss) – Foreign currency translation adjustments, net of tax			6,647				5				10,206				(793	)
Total comprehensive loss		$	(7,969	)		$	(12,250	)		$	(17,297	)		$	(22,001	)

FAQ

What were Mereo BioPharma's (MREO) key financial results for Q2 2025?

Mereo reported cash of $56.1M, net loss of $14.6M, R&D expenses of $5.4M, and G&A expenses of $5.5M for Q2 2025.

When will Mereo BioPharma's Phase 3 setrusumab trial results be available?

Final analyses for both the Phase 3 Orbit and Cosmic studies are expected around year-end 2025.

How long can Mereo BioPharma fund its operations with current cash?

The company's current cash balance of $56.1M is expected to fund operations into 2027, excluding potential partnership payments or business development activities.

What was the outcome of the interim analysis for MREO's Orbit study?

The Data Monitoring Committee confirmed that setrusumab demonstrated an acceptable safety profile and recommended the study continue to final analysis.

What are Mereo BioPharma's plans for alvelestat?

Mereo is preparing for a single, global Phase 3 pivotal study while actively engaging with potential partners for development and commercialization of alvelestat in AATD-lung disease.