British biopharma start-up Mereo to list in London

LONDON, June 6 (Reuters) - Mereo BioPharma Group, a British company trialing three drugs developed by Novartis , said it would list on London's junior AIM market to raise capital to develop its drugs and give it more financial flexibility for further deals.

The company aims to buy drugs discovered by big pharmaceutical companies and fund and design later-stage clinical trials. It (Other OTC: ITGL - news) opened last year with backing from Neil Woodford and Invesco Perpetual, among others.

Mereo said on Monday it had raised 14.8 million pounds ($21.5 million) in a private placing and a cash investment by Novartis (LSE: 0QLR.L - news) by way of a convertible loan, in addition to the 76.5 million pounds raised or committed last year.

The private placing was completed at a price of 221 pence a share, it said. The stock will start trading on June 9.

Chief Executive Denise Scots-Knight said the funding would help advance the clinical development of its candidates for the treatment of brittle bone syndrome, acute chronic obstructive pulmonary disease and hypogonadotropic hypogonadism, or low testosterone production, in obese men.

"Our strategy is to build, over time, a diverse portfolio, and having publicly traded shares will provide additional flexibility to secure the next product candidates, which are likely to be primarily sourced from large pharmaceutical companies," she said.

($1 = 0.6888 pounds) (Reporting by Paul Sandle, editing by Larry King)