265444 Mereo Biopharma Cover.qxp 29/03/2023 18:05 Page 1
Company Number 09481161
MEREO BIOPHARMA GROUP PLC
Annual Report and Accounts
Year ended December 31, 2022
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MEREO BIOPHARMA GROUP PLC
CONTENTS
Directors, secretary and advisers
Strategic Report
Directors’ Remuneration Report
Directors’ Report
Statement of Directors’ Responsibilities
Financial Statements
Independent auditor’s report
Consolidated Statement of Comprehensive Income/(Loss)
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
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3
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MEREO BIOPHARMA GROUP PLC
DIRECTORS, SECRETARY AND ADVISERS
Directors Dr. Denise Scots-Knight (Chief Executive Officer)
Michael Wyzga (Chairman)
Dr. Jeremy Bender
Dr. Anders Ekblom
Dr. Pierre Jacquet
Dr. Annalisa Jenkins
Dr. Deepa Pakianathan
Justin Roberts
Dr. Daniel Shames
Marc Yoskowitz
Company Secretary Charles Sermon
Registered Office 4th Floor, One Cavendish Place
London
W1G 0QF
Company Number 09481161
Auditors BDO LLP
Level 12, Thames Tower
Reading, Berkshire
RG1 1LX
Solicitors Latham & Watkins LLP
99 Bishopsgate
London EC2M 3XF
Registrars Link Group
10th Floor, Central Square
29 Wellington Street
Leeds, LS1 4DL
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MEREO BIOPHARMA GROUP PLC
STRATEGIC REPORT
Introduction
Mereo BioPharma Group plc (the “Company”, “Mereo” or “Parent Company”) is a public limited company
incorporated under the laws of England and Wales and is listed on the Nasdaq Global Market (“NASDAQ”).
The Company is a “quoted company” for the purposes of the Companies Act 2006 (the “Companies Act”).
The Directors present their strategic report together with the directors’ remuneration report, directors’ report,
audited consolidated financial statements of Mereo BioPharma Group plc and its subsidiaries (collectively,
the “Group”), audited company financial statements and auditors’ report for the year ended December 31,
2022. The Company has also filed with the U.S. Securities and Exchange Commission (the “SEC”) its Annual
Report on Form 20-F for the year ended December 31, 2022, which contains additional disclosures regarding
some of the matters discussed in this report.
Business overview and strategy
We are a biopharmaceutical company focused on the development of innovative therapeutics for rare
diseases. We have developed a robust portfolio of clinical stage product candidates. Our two rare disease
product candidates are setrusumab for the treatment of osteogenesis imperfecta (OI) and alvelestat for the
treatment of severe alpha-1-anti-trypsin deficiency- associated lung disease (AATD-LD) and Bronchiolitis
Obliterans Syndrome (BOS) following allogenic stem cell transplant.
Following the announcement of the results for setrusumab in a Phase 2b study in adults with OI which
demonstrated a dose dependent statistically significant increase in bone mineral density and bone strength,
we announced a strategic partnership with Ultragenyx in December 2020 for the development of setrusumab
in children and adults with OI. Ultragenyx initiated a pivotal, Phase 2/3 pediatric and young adult study
(5-25 years old) in the first half of 2022, with the Phase 3 transition expected in mid-2023. Ultragenyx also
intends to initiate a study of pediatric patients under age five with OI in the first half of 2023.
We announced successful completion of a Phase 2, dose-finding study for alvelestat in AATD-LD in May
2022 which demonstrated statistically significant changes in Neutrophil Elastase (NE) activity and
biomarkers of disease severity at different time points up to 12 weeks. Further, in October 2022 we
announced that Fast Track designation was granted by the U.S. Food and Drug Administration (FDA) for
alvelestat in AATD-LD, along with additional program updates. In March 2023, we announced the outcome
of the end-of-Phase 2 discussions with the FDA and the EMA (Scientific Advice) and based on clear
recommendations from both Agencies, we are designing a single, global, Phase 3 study evaluating the 240
mg dose of alvelestat versus placebo in patients with AATD-LD to support applications for full marketing
approvals in both the U.S. and EU. Alvelestat is also in an ongoing Phase 2 investigator-led study in AATD,
including in patients who may be on augmentation therapy. This study has enrolled 60 patients with data
expected in mid 2023. Following successful completion of a Phase 1b investigator-sponsored study in
patients with BOS following allogenic stem cell transplant, a Phase 2 study was initiated in the second half
of 2022.
Our oncology product candidate, etigilimab (an anti-TIGIT antibody), has completed a Phase 1a dose
escalation clinical trial in patients with advanced solid tumors and has been evaluated in a Phase 1b study
in combination with nivolumab in select tumor types. We have completed Simon Stage 1 of the open label
Phase1b/2 basket study (the ACTIVATE study) evaluating etigilimab in combination with nivolumab in three
rare tumors, two specific subtypes of soft-tissue sarcomas, uveal melanoma and testicular germ cell cancer,
three gynecological carcinomas, cervical, ovarian and endometrial carcinomas, and any solid tumor with
high mutation burden, all in the recurrent/metastatic setting. Etigilimab, in combination with nivolumab, is
also in an ongoing investigator-led Phase 1b/2 study in clear cell ovarian cancer at The University of Texas
MD Anderson Cancer Center, financed by the Cancer Focus Fund.
We plan to develop our product candidates through the next key clinical milestone and then partner where
it makes sense strategically to do so, but also in select cases for our rare disease product candidates, to
develop them through regulatory approval and potentially commercialization.
Our second oncology product, navicixizumab for the treatment of late line ovarian cancer, has completed a
Phase 1b study and was partnered in January 2020 for further development with OncXerna on a global basis.
We plan to partner or sell our other two product candidates acumapimod for the treatment of AECOPD and
leflutrozole for the treatment of male infertility, recognizing the need for greater resources to take these
product candidates to market.
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MEREO BIOPHARMA GROUP PLC
STRATEGIC REPORT
Our strategy is selectively to acquire and develop product candidates for rare diseases that have already
received significant investment from large pharmaceutical and biotechnology companies and that have
substantial pre-clinical, clinical and manufacturing data packages. Since our formation in March 2015, we
have successfully executed on this strategy by acquiring six clinical-stage product candidates of which four
were in oncology and rare diseases. Four of our six clinical-stage product candidates were acquired from
large pharmaceutical companies and two were acquired in the Merger. We aim to efficiently develop our
product candidates through the clinic and have successfully commenced or completed large, randomized
Phase 2 clinical trials for five of our product candidates.
Rare diseases represent an attractive development and, in some cases, commercialization opportunity for
us since they typically have high unmet medical need and can utilize regulatory pathways that facilitate
acceleration to approval and to the potential market. Development of products for oncology and rare diseases
both involve close collaboration with key opinion leaders and investigators. Development of rare disease
products generally involves close coordination with the patient organizations and patients are treated at a
limited number of specialized sites which helps identification of the patient population and enables a small
targeted sales infrastructure to commercialize the products in key markets.
Our team has extensive experience in the pharmaceutical and biotechnology sector in the identification,
acquisition, development, manufacturing and commercialization of product candidates in multiple
therapeutic areas including oncology and rare diseases. Our senior management has long- standing
relationships with senior executives of large pharmaceutical and biotechnology companies which we believe
enhances our ability to form strategic partnerships on our product candidates and to identify and acquire
additional product candidates.
Our Pipeline
The following tables summarize our pipeline for our product candidates. We have global commercial rights
to alvelestat, etigilimab, acumapimod and leflutrozole and commercial rights to setrusumab in Europe and
the U.K. We granted Ultragenyx an exclusive license to develop and commercialize setrusumab in the U.S.
and rest of the world, and we have licensed global rights for navicixizumab to OncXerna.
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Non-Core Programs Available for Partnering
Product candidate / indication
Phase 1a
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Acumapimod
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Leflutrozole
HH Infertility
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MEREO BIOPHARMA GROUP PLC
STRATEGIC REPORT
Core Rare Disease Product Candidates
Setrusumab (BPS-804/UX143): Setrusumab is a novel antibody designed to inhibit sclerostin, a protein that
inhibits the activity of bone-forming cells. Inhibiting sclerostin has been shown to promote increases in bone
mineral density through stimulation of bone-formation (through osteoblasts) and inhibition of
bone-resorption (through osteoclasts). We are developing setrusumab as a treatment for OI, a rare genetic
disease that results in bones that can break easily and is commonly known as brittle bone disease. OI is a
debilitating orphan disease for which there are no treatments approved by the FDA or EMA. It is estimated
that OI affects a minimum of 25,000 people in the United States and approximately an aggregate of 32,000
people in Germany, Spain, France, Italy and the United Kingdom. We believe setrusumab’s mechanism of
action is well suited for the treatment of OI and has the potential to become a novel treatment option for
patients that could reduce fractures and improve patient quality of life.
Prior to our acquisition of setrusumab, Novartis conducted four clinical trials in 106 patients and healthy
volunteers. In 2016, we obtained orphan drug designation in OI for setrusumab in the United States and the
EU and, in November 2017, it was accepted into the Priority Medicines scheme (“PRIME”) of the EMA. In
September 2020 we received rare pediatric disease designation for setrusumab in OI from the FDA. In
November 2019 we reported top-line data on a Phase 2b clinical trial of setrusumab for adults with OI. The
Phase 2b was a dose ranging study with three blinded arms at high, medium and low doses to establish the
dose response curve and an open label arm at the top dose. Setrusumab demonstrated statistically
significant improvements in bone formation biomarkers and bone mineral density (measured by Dual Energy
X-ray Absorptiometry) and a trend to a reduction in fractures at the high dose, compared to the other doses,
even though the study was not powered for fracture reduction. The results support the progression of
setrusumab into a pediatric pivotal study in OI. The data was also presented, as a podium presentation, at
the American Society of Bone and Mineral Research (“ASBMR”) in October 2021.
In December 2020 we announced a partnership with Ultragenyx for the development of setrusumab for OI.
Under the terms of the partnership, Ultragenyx will lead future global development of setrusumab in both
pediatric and adult patients. We granted Ultragenyx an exclusive license to develop and commercialize
setrusumab in the US and rest of the world, excluding Europe and the U.K. where we retain commercial rights.
Each party will be responsible for post-marketing commitments in their respective territories.
Ultragenyx made an upfront payment of $50 million to Mereo and will fund global development of the
program until approval and has agreed to pay a total of up to $254 million upon achievement of certain
clinical, regulatory and commercial milestones. Ultragenyx will pay tiered double digit percentage royalties
to us on net sales outside of Europe and the U.K. and we will pay a fixed double digit percentage royalty to
Ultragenyx on net sales in Europe and the U.K. Under the terms of our 2015 agreement with Novartis, we will
pay Novartis a percentage of proceeds, subject to certain deductions, with Mereo receiving a substantial
majority of the payments from Ultragenyx.
Ultragenyx initiated a pivotal Phase 2/3 study in pediatric and young adult patients (5-25 years old) in the
first half of 2022 and plans to transition to the Phase 3 part of the study in mid-2023. The objective of the
Phase 2/3 study will first focus on determining the optimal dose based on increases in collagen production
using serum P1NP levels and an acceptable safety profile. Following determination of the dose, Ultragenyx
currently intend to adapt the study into a pivotal Phase 3 stage, evaluating fracture reduction over an
estimated 15 to 24 months as the primary endpoint, subject to regulatory review. In the first half of 2023,
Ultragenyx initiated a randomized study in OI in children under five with serious bone disease, comparing
bisphosphonates to BPS804/UX143. Younger pediatric patients with OI often have a much higher fracture
rate than other age groups and a greater medical need, driving clinical urgency for better treatment options.
Annualized rate of fractures is the primary end-point in the study.
Alvelestat (MPH-966): Alvelestat is a novel, oral small molecule we are developing for the treatment of severe
AATD-associated Lung Disease (AATD-LD) and BOS. AATD is a potentially life-threatening, rare, genetic
condition caused by a lack of effective alpha-1 antitrypsin (“AAT”). The lungs are normally protected from
enzymatic degradation by neutrophil elastase by the AAT protein, but in severe AATD the AAT is either
misfolded and fails to be released into the circulation, inactive or completely missing. The degradation of
tissue by unopposed neutrophil elastase leads to severe debilitating diseases, including early-onset
pulmonary emphysema, a disease that irreversibly destroys the tissues that support lung function. There
are an estimated 50,000 patients in North America and 60,000 patients in Europe with severe AATD, although
due to underdiagnosis, there are estimated to be approximately 10,000 patients diagnosed in North America.
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BOS is a progressive, ultimately fatal fibrotic lung disease due to graft versus host disease following stem
cell transplant, or lung transplant rejection. An estimated fifty percent of lung transplant recipients will
develop BOS by five years post-transplant, with an average survival of less than five years. There are an
estimated 10,000 people living with lung transplant and BOS in the US and Europe. Alvelestat is designed to
inhibit NE, a neutrophil protease, which is a key enzyme involved in the destruction of lung tissue. We believe
the inhibition of NE has the potential to protect patients with AATD-LD from further lung damage. BOS is
characterized by anti-organ auto-immune responses, either graft versus host (in SCT) or host versus graft
(in lung transplant), exacerbated by elevated neutrophils in the lung and excess NE activity, leading to lung
damage through elastin breakdown in the tissue and progressive fibrosis, and ultimately respiratory failure.
By inhibiting NE, alvelestat will reduce the accelerating effects of NE-driven inflammation on BOS.
Prior to our license of alvelestat, AstraZeneca conducted 12 clinical trials involving 1,776 subjects, including
trials in bronchiectasis and CF. Although these trials were conducted in diseases other than AATD, we believe
the data demonstrated potential clinical benefit and biomarker evidence of treatment effect for AATD
patients. These trials created a safety database of 1,149 subjects treated with alvelestat.
We announced successful completion of a Phase 2, placebo-controlled, dose-ranging, proof-of-concept
clinical trial in 99 patients with AATD-LD in the United States and the EU in May 2022 which demonstrated
statistically significant changes in Neutrophil Elastase (NE) activity and biomarkers of disease severity at
different time points up to 12 weeks. We subsequently announced additional Phase 2 data from this study
in October 2022 demonstrating the association of biomarker responders in alvelestat-treated patients to
improvement in the activity domain of the St George’s Respiratory Questionnaire, but not in patients treated
with placebo. No new safety signals were detected in patients with AATD-LD. The most frequent adverse
event was of headache which was more frequently observed at the higher doses of alvelestat (120 mg and
240 mg) used in AATD-LD than was observed at lower doses used previous studies in COPD, bronchiectasis
and cystic fibrosis, There was evidence of tolerance to headache being induced, and we intend to use a dose-
escalation regime for initiation of treatment in future trials. A single treatment-emergent adverse event (TEAE)
of liver function abnormality (raised hepatic transaminases, withour meeting Hy’s Law) and one TEAE of
prolonged QTc, in which study-drug stopping criteria were met were reported in the Phase 2. Both events
fully resolved on study drug cessation. We obtained Fast Track designation for alvelestat for AATD-LD in the
U.S. in October 2022. In March 2023, we announced the outcome of the end-of-Phase 2 discussions with
the FDA and the EMA. Based on clear recommendations from both Agencies, we are designing a single,
global, Phase 3 study evaluating the 240 mg dose of alvelestat versus placebo in patients with AATD-LD to
support applications for full marketing approvals in both the U.S. and EU. The proposed Phase 3 study has
two independent primary endpoints, i) a Patient-Reported Outcome (PRO), as guided by the FDA, and ii) lung
density measured by CT scan, as guided by the EMA.
Alvelestat is also in an ongoing Phase 2 investigator-led study in AATD-LD, including in patients who may
be on augmentation therapy, with data expected in the third quarter of 2023.
Emerging data on the potential of NE inhibition to reduce the inflammatory and thrombotic effects of
Neutrophil Extracellular Traps (NETs) in COVID-19, led to the initiation of a study in this disease. The top-
line results were reported in December 2021. The results demonstrated a safety profile consistent with
previous studies, and in the alvelestat arm, a reduction (an improvement) of 2 points or more in the World
Health Organization (WHO) Severity Score in 62.5% (5/9) of the patients versus 28.5% (2/7) in the placebo
arm at day 5. At day 7 87.5% (7/8) patients in the alvelestat arm had improved by 2 points or more vs 57%
(4/7) in the placebo arm. Inflammatory and pro-coagulopathy biomarkers were also supportive.
An open-label Phase 1b/2 investigator-sponsored study in BOS following allogeneic stem cell transplant is
ongoing. Interim results of Phase 1b were reported in December 2021 showing stabilization or improvement
in lung function measured by Forced Expiratory Volume in 1 second, (FEV1) in 6 of 7 patients, and supportive
biomarker responses, with reduction in neutrophil elastase and the mature elastin breakdown product
(desmosine) and reductions in markers of collagen synthesis associated with fibrosis. Evaluation of the
clinical and safety data from 10 patients in Phase 1 supported the dose to be progressed and expansion
into the Phase 2 portion of the study was initiated in the second half of 2022.
Etigilimab (MPH-313): Etigilimab is an antibody against TIGIT (T-cell immunoreceptor with Ig and ITIM
domains). TIGIT is a next generation checkpoint receptor shown to block T-cell activation and the body’s
natural anti-cancer immune response. Etigilimab is an IgG1 monoclonal antibody which binds to the human
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TIGIT receptor on immune cells with a goal of improving the activation and effectiveness of T-cell and NK
cell anti-tumor activity. We completed a Phase 1a dose escalation clinical trial with etigilimab in patients
with advanced solid tumors and enrolled patients in a Phase 1b study in combination with nivolumab in
selected tumor types. 23 patients were treated in the Phase 1a dose escalation study with doses up to
20mg/kg Q2W. Tumor types included colorectal cancer, endometrial cancer, head and neck cancer, pancreatic
cancer, ovarian cancer, and other tumor types. No dose limiting toxicities were observed. In the Phase 1b
combination study, a total of ten patients, nine of whom had progressed on prior anti-PD1/PD-L1 therapies,
were enrolled at doses of 3, 10 and 20 mg/kg. Tumor types included gastric cancer and six other tumor types.
Eight patients were evaluable for tumor growth assessment, and all of these patients had progressed on
PD1/PD-L1 therapies with best responses, including two patients with a partial response and stable disease.
Patients remained on study for up to 224 days. No dose limiting toxicities (DLTs) were observed.
Treatment emergent adverse events (TEAEs) related to study drug were reported by 16 patients (69.6%) in
the Phase 1a portion of the study and 7 patients (70.0%) in the Phase 1b portion of the study. The most
commonly reported related TEAEs in the Phase 1a portion of the study were pruritus (4 patients, 17.4%) and
fatigue, nausea, rash and maculopapular rash (each reported by 3 patients, 8.7%). In the Phase 1b portion
of the study, the most commonly reported related TEAEs were fatigue (3 patients, 30.0%) and pruritus, rash
and pruritic rash (each reported by 2 patients, 20.0%).
There were no treatment-related serious adverse events in the Phase 1a portion and there was only one
treatment- related serious adverse event (autoimmune hepatitis) in the Phase 1b portion of the study. The
Phase 1b study has now been completed.
The ACTIVATE open label Phase 1b/2 basket study of Etigilimab in combination with nivolumab in multiple
tumor types enrolled 76 patients and has completed Simon Stage 1of the study. Parallel cohorts in the study
have focused on three rare tumors, two subtypes of soft-tissue sarcomas, uveal melanoma and testicular
germ cell cancer, three gynecological carcinomas, cervical, ovarian and endometrial carcinomas and any
solid tumor with high mutation burden, all in the recurrent/metastatic setting.
We enrolled a total of 76 patients in the Phase 1b part of the study. The trial is evaluating objective response
rate as a primary endpoint and will also evaluate safety, duration of response, pharmacokinetics, anti-drug
antibodies, progression-free survival and additional secondary and exploratory endpoints. The study was
designed to expand select cohorts of patients, based on outcomes, to further evaluate responses to
etigilimab and anti-PD1. Biomarker analyses will be conducted on tumor tissues and blood samples from
treated patients, including quantification of levels of tumor- associated TIGIT, PVR and related biomarkers
to evaluate their potential utility for selecting patients most likely to respond to the combination of etigilimab
and anti-PD1.
We reported an interim clinical and biomarker data update on this study in September 2022. At the time of
the data cut-off, there were 63 efficacy-evaluable checkpoint inhibitor-naïve (CPI-naive) subjects with
a minimum of 1 staging scan at 8 (+/-1) weeks and RECIST 1.1 response assessment or documented
clinical progression.
We have completed enrollment in an open label Phase1b/2 basket study (the ACTIVATE study) evaluating
etigilimab in combination with nivolumab on three rare tumors, two specific subtypes of soft-tissue
sarcomas, uveal melanoma and testicular germ cell cancer, three gynecological carcinomas, cervical,
endometrial and ovarian carcinomas and any solid tumor with high mutation burden, all in the
recurrent/metastatic setting. These indications were selected based on observations of clinical activity in
our prior Phase 1a/1b study and/or based on a comprehensive biomarker analysis of solid tumors which
revealed tumor types with a high prevalence of expression of TIGIT and its principal ligand poliovirus receptor
(PVR) and concordant expression of TIGIT and PD1. The selected tumor types have shown responsiveness
to anti-PD1 therapies with response rates generally ranging from 5-20%. The combination of etigilimab and
anti-PD1 may lead to improved responses in these patients.
In April 2021, the Company entered into partnership with Cancer Focus Fund for a Phase 1b/2 study of
etigilimab in Clear Cell Ovarian Cancer to be conducted at The University of Texas MD Anderson Cancer
Center. The Phase 1b/2 study is being financed by Cancer Focus Fund in exchange for upfront consideration
of $1.5 million of the Company’s shares and additional payments based on the achievement of certain
milestones. Clear cell ovarian cancer is a rare cancer that accounts for approximately 5 to 10% of all ovarian
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STRATEGIC REPORT
carcinomas in North America. MD Anderson are planning to follow the per protocol procedure to expand the
Phase 1b/2 study from an initial 10 patients to 20 patients in the Phase 2 portion of the study.
Our Non-Core Partnered Programs
Following completion of successful Phase 1b or Phase 2 studies the products below are programs which
we have successfully partnered.
Navicixizumab (OMP-305B83): Navi is a bispecific antibody that inhibits delta-like ligand 4 (DLL4) and
vascular endothelial growth factor (VEGF). We acquired this therapeutic product in the merger with Mereo
BioPharma 5 (formerly OncoMed). In a Phase 1a clinical trial, Navi demonstrated single agent activity.
Following this we conducted a Phase 1b clinical trial in ovarian cancer, in combination with paclitaxel, in
platinum-resistant ovarian cancer. A successful FDA Type B meeting was held in July 2019 the potential for
accelerated approval was discussed. Navicixizumab has also been granted Fast Track designation by the
FDA. In January 2020, Navi was licensed by the Company to OncXerna pursuant to the terms of a global
licensing agreement. Under the terms of the contingent value rights agreement between us and
Computershare from April 2019 (the “Mereo CVR Agreement”), the holders of contingent value rights are
entitled to receive the benefit of certain cash milestone payments made to Mereo under the license
agreement. Pursuant to the terms of the Mereo CVR Agreement, if a milestone occurs prior to the fifth
anniversary of the closing of the Merger, April 23, 2024, then holders of CVRs will be entitled to receive an
amount in cash equal to 70% of the aggregate principal amount received by Mereo after deduction of costs,
charges and expenditures set out in detail in the Mereo CVR Agreement. Such milestone payments are also
subject to a cash consideration cap, pursuant to which the aggregate principal amount of all cash payments
made to holders of CVRs under the Mereo CVR Agreement shall in no case exceed $79.7 million. See “—
Material Agreements—CVR Agreement Between Us and Computershare—The NAVI Milestones.”
Our Non-Core Programs Available for Partnering
Following completion of successful Phase 1 or Phase 2 studies the products below are programs which we
intend to out-license or sell.
Acumapimod (BCT-197): Acumapimod is a p38 MAP kinase inhibitor therapy for treatment during severe
acute exacerbations of COPD (AECOPD). In a Phase 2 trial, acumapimod given over 5 days in patients
hospitalized with AECOPD demonstrated a statistically significant reduction in re-hospitalization for
treatment failure and recurrent exacerbations. Acumapimod was reported to be safe and well tolerated.
Following meetings with FDA and EMA a global Phase 3 registrational program has been designed and we
intend to explore out-licensing or sale opportunities with third parties for the further development
of acumapimod.
Leflutrozole (BGS-649): Leflutrozole is an oral inhibitor of aromatase for the treatment of male infertility
associated with HH. Excess aromatase in fat tissue reduces testosterone, LH and FSH, leading to HH. In
Phase 2 trials, leflutrozole normalized testosterone, increased LH and FSH and was reported to be
well-tolerated. Effects on sperm counts supported that future development of leflutrozole should focus on
male infertility associated with HH. We intend to explore out-licensing or sale opportunities with third parties
for the further development of leflutrozole.
Our Strategy
We intend to become a leading biopharmaceutical company developing innovative therapeutics that aim to
improve outcomes for patients with rare diseases. The key elements of our strategy to achieve this goal
include:
•
Rapidly develop our product candidates and potentially commercialize our rare disease
product candidates.
We have completed and announced top-line data on a Phase 2b clinical trial of setrusumab for the
treatment of OI in adults in the United States, Europe and Canada. We reported top-line data on the
three blinded dose ranging arms in November 2019 with the results supporting progression of
setrusumab into a pediatric pivotal study in OI. Following the completion of the dosing part of the study,
patients were followed for a further twelve months to examine the off-effects of setrusumab. In
September 2020, the FDA granted Rare Pediatric Disease designation to setrusumab for the treatment
of OI. Following our completion of the Phase 2b ASTEROID study, we met with both the FDA
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STRATEGIC REPORT
(end-of-Phase 2 (EOP2) meeting in February 2020) and the EMA (PRIME meeting in May 2020) to
discuss the principles of a design of a single Phase 2/3 registrational pediatric study in OI. In December
2020, we signed a license and collaboration agreement for setrusumab in OI with Ultragenyx
Pharmaceutical Inc. Ultragenyx initiated a pivotal Phase 2/3 study in young adults and pediatric patients
(5-25 years old) in the first half of 2022 and expects to provide an update on the Phase 2 dose ranging
part of this study in mid-2023, when the trial will transition into Phase 3. Following selection of the
dose for the Phase 3 study, Ultragenyx intend to initiate an additional registrational trial in young
pediatric patients ( <5 years old) in the first half of 2023.
We reported successful top-line data from a Phase 2 proof-of-concept clinical trial of alvelestat for the
treatment of severe AATD-LD in May 2022 and provided an additional data update in October 2022. We
received regulatory feedback on the design of a single, global, pivotal registrational trial for alvelestat
in AATD-LD for full approval in Q1 2023 and will now determine the optimum path forward for
development of alvelestat towards approval and commercialization, including potential partnering. We
also announced the completion and top-line data of a Phase 1b/2 placebo-controlled clinical trial to
evaluate the safety and efficacy of alvelestat in hospitalized adult patients with moderate to severe
COVID-19 respiratory disease. The investigator-led Phase 1b/2 study in BOS following SCT has
completed the Phase 1b stage (10 patients) and commenced the Phase 2 portion of the study in the
second half of 2022 to evaluate clinical efficacy on lung function (FEV1) in a 6-month study in up to an
additional 24 patients, with expansion for responders to 12 months.
Etigilimab, our lead oncology program, has completed a Phase 1a dose escalating monotherapy study
and has been evaluated in a Phase 1b combination study with nivolumab in a range of tumor types.
We have also completed enrollment in an open label Phase 1b/2 basket study evaluating our anti-TIGIT
in combination with nivolumab in a range of tumor types including three rare tumors, sarcoma, uveal
melanoma and germ cell cancer, three gynecological carcinomas, cervical, endometrial and ovarian
carcinomas and tumors with high mutation burden. We enrolled a total of 76 patients in the Phase 1b
part of the study and we reported an interim clinical and biomarker data update on this study in
September 2022.
•
•
•
Efficiently advance our other product candidates and explore out-licensing or sale opportunities with
third parties for further clinical development and/or commercialization. Our second oncology product,
navicixizumab, for the treatment of late line ovarian cancer, has completed a Phase 1 study and has
been partnered on a global basis with OncXerna. Based on the results from our Phase 2 clinical trial of
acumapimod, we plan to enter into one or more strategic relationships with third parties for
acumapimod to undertake the next phase of clinical development and, if approved, commercialization.
In March 2018, we reported top-line Phase 2b data for leflutrozole for the treatment of HH and in
December 2018, we reported positive results from the safety extension study for leflutrozole. We intend
to explore out-licensing or sale opportunities with third parties for the further development and
commercialization of leflutrozole.
Continue to be a partner of choice for pharmaceutical and biotechnology companies. We believe that
we are a preferred partner for pharmaceutical and biotechnology companies as they seek to unlock the
potential in their development pipelines and deliver therapeutics to patients in areas of high unmet
medical need. We have strong relationships with these companies, as evidenced by our agreements
with Novartis and AstraZeneca, as well as by the Merger, and a track record of structuring transactions
that enable us to leverage our core capabilities while creating value for all stakeholders. We intend to
continue to enter into strategic relationships that align our interests with those of pharmaceutical and
biotechnology companies and that we believe to be mutually beneficial.
Leverage our expertise in business development. Our senior management team has extensive
relationships with large pharmaceutical and biotechnology companies. These relationships are
important to us as we seek to form strategic partnerships on our product candidates and as appropriate,
to grow our pipeline of product candidates in rare diseases.
9
265444 Mereo Biopharma pp001-pp019.qxp 29/03/2023 18:32 Page 10
MEREO BIOPHARMA GROUP PLC
STRATEGIC REPORT
Financial review
The following table sets forth Mereo’s results of operations for the years ended December 31, 2022 and 2021.
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