Mereo BioPharma Reports $43.3 Million Net Loss for 2024, Revenue Declines to Nil

Mereo BioPharma Group plc reported a net loss of $43.3 million for the year ended December 31, 2024, compared to a net loss of $29.5 million in 2023. The increase in net loss is primarily attributable to increased research and development expenses, and general and administrative expenses. Revenue for 2024 was nil, while 2023 revenue totaled $10 million, consisting of a $9 million milestone payment from Ultragenyx related to setrusumab and a $1 million upfront payment from ReproNovo for leflutrozole. Cost of revenue in 2023 was $2.6 million, primarily due to payments to Novartis under a 2015 agreement.

Research and development expenses increased by $3.5 million to $20.9 million in 2024, driven by increased spending on alvelestat ($6.2 million increase) and setrusumab ($2.6 million increase), partially offset by a decrease in etigilimab expenses ($5.5 million decrease). The increase in alvelestat spending reflects preparations for a Phase 3 trial, including manufacturing and regulatory activities. The rise in setrusumab expenses is due to increased European activities and payments under a manufacturing agreement with Ultragenyx. General and administrative expenses rose by $8 million to $26.4 million in 2024, largely due to increased pre-commercial activities for setrusumab in Europe and higher employee-related costs.

Significant strategic developments during the year included the completion of enrollment in Phase 3 Orbit and Cosmic studies for setrusumab in April 2024, and the amendment of the license agreement with AstraZeneca for alvelestat in November 2024. The company also entered into an exclusive global license agreement with ReproNovo for leflutrozole in December 2023. Mereo's employee count stood at 36 as of December 31, 2024, with 31 employees in the U.K. and 5 in the U.S. The company does not have its own sales and marketing capabilities and relies on partnerships for commercialization.

The company's pipeline includes setrusumab (OI), alvelestat (AATD-LD), etigilimab (advanced solid tumors), and acumapimod (AECOPD). Setrusumab has received orphan designation from the EC and FDA, PRIME designation from the EMA, and Breakthrough Therapy and rare pediatric disease designations from the FDA. Alvelestat has received orphan designation from the EC and FDA, and Fast Track designation from the FDA. Mereo plans to directly commercialize or co-commercialize its rare disease product candidates and out-license or sell its non-rare disease candidates. The company anticipates needing additional funding to complete development and potential commercialization of its product candidates.

Mereo projects that its current cash resources will extend into 2027, but additional funding will be required beyond that point. The company plans to secure this funding through a combination of non-dilutive financing options, public or private equity, debt financings, or other sources. The company's financial statements are presented in U.S. dollars, and it is exposed to various financial risks, including interest rate risk, foreign currency risk, and inflation risk. The company's risk factors include those related to its limited operating history, dependence on partners and third parties, regulatory approvals, competition, intellectual property, and financial resources.