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Mereo BioPharma Announces Interim Financial Results for the Six Months Ended June 30, 2020 and Provides Corporate Update

Mereo BioPharma Group plc
·9-min read

On track to initiate Phase 1b/2 etigilimab (Anti-TIGIT) combination study in Q4 2020

Enrolment resumed in Phase 2 study of alvelestat in Alpha-1 Antitrypsin Deficiency and initiated placebo-controlled Phase 1b/2 clinical trial in COVID-19 respiratory disease

Partnering discussions continue for portfolio of clinical-stage programs including setrusumab for osteogenesis imperfecta

PIPE Financing of $70 million (£56 million) completed in June 2020, cash runway into 2022

Conference Call Today at 8:00 a.m. EDT / 1:00 p.m. BST

LONDON and REDWOOD CITY, Calif., Sept. 29, 2020 (GLOBE NEWSWIRE) -- Mereo BioPharma Group plc (NASDAQ: MREO, AIM: MPH), “Mereo” or “the Company”, a clinical stage biopharmaceutical company focused on oncology and rare diseases, today announces unaudited interim financial results for the six months ended June 30, 2020 and provides a corporate update.

Denise Scots-Knight, Chief Executive of Mereo, said: “Following the closing of our $70 million financing in the first half of 2020 we have focussed on executing our strategy, advancing etigilimab (“Anti-TIGIT”) for the treatment of solid tumors alongside developing our rare disease portfolio. We remain on track to initiate a Phase 1b/2 study of etigilimab (Anti-TIGIT) in combination with an anti-PD-1 in a range of solid tumor types in Q4 2020. Our rare disease portfolio includes setrusumab for osteogenesis imperfecta which we plan to partner prior to the initiation of a pivotal Phase 3 study, and alvelestat which is being investigated in an ongoing Phase 2 proof-of-concept study for alpha-1 anti-trypsin deficiency. We were also pleased to have recently announced the initiation of a Phase 1b/2 placebo-controlled study of alvelestat in COVID-19 infected patients following the scientific publications demonstrating the involvement of neutrophil elastase in COVID-19 infection pathways. We also continue to advance other discussions with potential partners to optimize the value of our broader product portfolio.”

Recent Highlights and Upcoming Milestones

Etigilimab (Anti-TIGIT) for Solid Tumors

  • On track to initiate a Phase 1b/2 study of etigilimab in combination with an anti-PD-1 in a range of solid tumor types in Q4 2020.

Setrusumab for Osteogenesis Imperfecta (OI)

  • Receipt of FDA Rare Pediatric Disease Designation on September 23, 2020.

  • Following regulatory discussions in 1H 2020, both the FDA and EMA have agreed on the principles of a design of a single Phase 3 pediatric pivotal study in OI.

  • Intend to partner setrusumab prior to conducting a pivotal trial of setrusumab in children with severe OI. Partnering discussions are well underway with a range of potential structures including options for Mereo to retain commercial rights in certain regions.

Alvelestat for Severe Alpha-1 Antitrypsin Deficiency (AATD)

  • Topline data from an ongoing Phase 2 proof of concept study remains on track for 2H 2021.

  • Announced the initiation 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.

  • Investigator-sponsored studies underway in AATD and in the orphan disease, bronchiolitis obliterans syndrome (BOS).

Partnering Discussions Continue for Portfolio of Other Clinical-Stage Programs

  • Leflutrozole for hypogonadotropic hypogonadism (HH)
    º Partnering discussions continuing based on development in male infertility.

  • Acumapimod for Acute Exacerbations of Chronic Obstructive Pulmonary Disease (AECOPD)
    º Discussions continuing on separate financing for the Phase 3 study agreed with the FDA and EMA.

Corporate

  • Appointment of Dr. Brian Schwartz and Dr. Jeremy Bender as Non-Executive Directors and departure of Mr Paul Blackburn as Non-Executive Director effective October 1, 2020

  • Dr. John Lewicki appointed as Chief Scientific Officer and Dr. Ann Kapoun appointed as Head Translational R&D in July 2020.

Financial Highlights

  • Cash resources of £56.8 million as at June 30, 2020 (June 30, 2019 £36.1 million).

  • £11.8 million raised in equity and debt in Q1 2020.

  • Additional $70 million (£56 million) raised in PIPE in Q2 2020.

  • Cash runway to early 2022.

Conference Call Information
Mereo will host a live conference call and webcast today at 8:00 a.m. EDT / 1:00 p.m. BST to discuss the Company’s financial results and provide a corporate update.

Dial-in numbers: (866) 688-2942 (U.S.) or +1 (561) 569-9224 (U.K./International)

Conference ID number: 9572439

A live and archived webcast may be accessed by visiting the Investors sections of the Company’s website at https://www.mereobiopharma.com/investors/results-reports-and-presentations/. The archived webcast will remain available on the Company's website following the live call.

About Mereo BioPharma
Mereo BioPharma is a biopharmaceutical company focused on the development and commercialization of innovative therapeutics that aim to improve outcomes for oncology and rare diseases. Mereo's lead oncology product candidate, etigilimab ("Anti-TIGIT"), 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. Mereo's rare disease product portfolio consists of setrusumab, which has completed a Phase 2b dose-ranging study in adults with osteogenesis imperfecta ("OI"), as well as alvelestat, which is being investigated in a Phase 2 proof-of-concept clinical trial in patients with alpha-1 antitrypsin deficiency ("AATD") and in a Phase 1b/2 clinical trial in COVID-19 respiratory disease.

Additional Information
The person responsible for arranging the release of this information on behalf of the Company is Charles Sermon, General Counsel.

Forward-Looking Statements
This Announcement contains "forward-looking statements." All statements other than statements of historical fact contained in this Announcement 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. The foregoing factors and the other risks and uncertainties that affect the Company's business, including those described in its Annual Report on Form 20-F, Reports on Form 6-K and other documents filed from time to time by the Company with the United States 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

N+1 Singer (Nominated Adviser and Broker to Mereo)

+44 (0)20 7496 3081

Phil Davies

Will Goode

Burns McClellan (US Investor Relations Adviser to Mereo)

+1 212 213 0006

Lisa Burns

Steve Klass

FTI Consulting (UK Public Relations Adviser to Mereo)

+44 (0)20 3727 1000

Simon Conway

Ciara Martin

Investors

investors@mereobiopharma.com



Consolidated statement of comprehensive loss
for the six months ended June 30, 2020

Notes

Six months ended
June 30, 2020
Unaudited
£’000

Six months ended
June 30, 2019
Unaudited
£’000

Year ended
December 31, 2019
Audited
£’000

Research and development expenses

(8,479

)

(11,918

)

(23,608

)

Administrative expenses

(8,212

)

(6,918

)

(15,909

)

Operating loss

(16,691

)

(18,836

)

(39,517

)

Net income recognised on acquisition of subsidiary

1,035

1,035

Finance income

39

137

377

Finance charge

3

(97,628

)

(998

)

(3,496

)

Loss on disposal of intangible assets

4

(11,302

)

Net foreign exchange (loss)/gain

(519

)

(20

)

483

Loss before tax

(126,101

)

(18,682

)

(41,118

)

Taxation

1,482

2,459

6,274

Loss for the period, attributable to equity holders of the parent

(124,619

)

(16,224

)

(34,844

)

Basic and diluted loss per share for the period

(1.05

)

(0.22

)

(0.39

)

Other comprehensive income / (loss)
Items that may be subsequently reclassified to the income statement

Fair value changes on investments held at fair value through OCI

3

88

Currency translation of foreign operations

1,324

711

(499

)

Total comprehensive loss for the period, attributable to equity holders of the parent

(123,292

)

(15,425

)

(35,343

)



Consolidated balance sheet
as at June 30, 2020

Notes

June 30, 2020
Unaudited
£’000

June 30, 2019
Unaudited
£’000

December 31, 2019
Audited
£’000

Assets

Non-current assets

Property, plant and equipment

11,225

13,100

11,558

Intangible assets

4

31,876

45,157

44,456

43,101

58,257

56,014

Current assets

Prepayments

1,400

3,068

2,111

R&D tax credits

6,624

7,745

10,426

Other taxes recoverable

979

Other receivables

1,836

1,953

572

Short-term investments

7,828

Cash and short-term deposits

56,821

28,290

16,347

66,681

48,884

30,435

Total assets

109,782

107,141

86,449

Equity and liabilities

Equity

Issued capital

7

1,016

294

294

Share premium

7

161,785

121,684

121,684

Other capital reserves

7

127,727

58,004

59,147

Employee Benefit Trust shares

7

(1,305

)

(1,305

)

(1,305

)

Other reserves

7

4,875

7,000

7,000

Accumulated losses

7

(270,681

)

(127,357

)

(146,065

)

Translation reserve

7

825

711

(499

)

Total equity

24,242

59,031

40,256

Non-current liabilities

Provisions

8

1,698

1,927

1,449

Interest-bearing loans and borrowings

6

14,506

11,721

5,373

Other liabilities

44

34

44

Warrant liability

9

35,757

225

131

Lease liability

11,167

13,139

9,318

63,172

27,046

16,315

Current liabilities

Trade and other payables

5,489

6,758

6,352

Accruals

2,701

5,961

5,138

Provisions

8

31

334

309

Interest-bearing loans and borrowings

6

13,254

8,011

15,139

Contingent consideration liability

354

Lease liability

893

2,586

22,298

21,064

29,878

Total liabilities

85,540

48,110

46,193

Total equity and liabilities

109,782

107,141

86,449