On March 31, 2022 Mereo BioPharma Group plc (NASDAQ: MREO) ("Mereo" or the "Company"), a clinical-stage biopharmaceutical company focused on oncology and rare diseases, reported financial results for the year ended December 31, 2021 and provided an update on recent corporate highlights (Press release, Mereo BioPharma, MAR 31, 2022, View Source [SID1234611291]).
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"During 2021, we continued to execute on all fronts and made substantial progress across our pipeline. We further advanced our etigilimab anti-TIGIT program, reporting highly promising interim data from the ongoing ACTIVATE Phase 1b/2 study and expanded our research to include clear-cell ovarian cancer through our partnership with Cancer Focus Fund and MD Anderson," said Dr. Denise Scots-Knight, Chief Executive Officer of Mereo. "In addition, we reported positive data from multiple studies of alvelestat, which also received orphan drug designation for the treatment of AATD. We ended the year well positioned for further success in 2022, with a strong balance sheet supported by the proceeds of our public offering early last year. Following our accomplishments in 2021, we look forward to our upcoming catalysts in 2022."
Highlights from 2021 and Recent Developments
Etigilimab (MPH-313)
Reported interim data in Q4 2021 from ACTIVATE Phase 1b/2 open label study of etigilimab anti-TIGIT antibody in combination with nivolumab in solid tumors
Based on analysis of 15 patients in the efficacy analysis set with a minimum of one scan to-date or clinical progression, those receiving the etigilimab / nivolumab combination have achieved one complete response in cervical cancer, one partial response in ovarian cancer and four instances of stable disease in ovarian cancer, cervical and uveal melanoma
Well tolerated with a favorable safety profile
Ongoing Phase 1b/2 basket combination study continues to enroll well
Update on additional patients and durability of initial responses expected in Q2 2022
Alvelestat (MPH-966)
Received orphan designation from the FDA for the treatment of AATD
Held an R&D Day update on the alvelestat programs in Q1 2022, including in the ongoing Phase 2 trial which enrolled 99 patients with AATD
Data expected in early Q2 2022
Reported positive bio-marker data from investigator-sponsored Phase 1b/2 study of alvelestat in patients with BOS following hematopoietic stem cell transplantation
Reported positive top-line results from Phase 1b/2 trial in hospitalized patients with COVID-19 respiratory disease; Alvelestat, on top of standard of care, resulted in a more rapid time to improvement in WHO Disease Severity score in the first 5-7 days compared to placebo plus standard of care.
Corporate Updates
Partnerships
Announced partnership with the Cancer Focus Fund supporting a Phase 1b/2 clinical study of etigilimab in combination with nivolumab in clear cell ovarian cancer to be conducted at The University of Texas MD Anderson Cancer Center
Ultragenyx expects to enroll the first patient in the Phase 2/3 study of setrusumab in 5–25 year-olds with osteogenesis imperfecta in 1H 2022
Public Offering of American Depositary Shares
Public offering gross proceeds of $115.1 million in Q1 2021
Strengthened Board of Directors
Pierre Jacquet, M.D., Ph.D. appointed to Board of Directors, September 2021
Anne Hyland appointed to Board of Directors, March 2022
Full Year 2021 Financial Results
Revenue was £36.5 million in 2021, representing the upfront payment under the licensing and collaboration agreement with Ultragenyx in January 2021 for the development and commercialization of setrusumab for OI.
Full year 2021 research and development expenses were £23.6 million, compared to £16.3 million in 2020, an increase of £7.2 million, or 44%. R&D expenses relating to etigilimab increased by £12.5 million. The increase was due to the costs associated with commencement of the open label Phase 1b/2 basket study in combination with nivolumab in a range of tumor types. R&D expenses relating to alvelestat increased £0.6 million, or 13%, primarily related to the ongoing Phase 2 proof-of-concept study. Partially offsetting the increases, R&D expenses relating to setrusumab and navicixizumab decreased by £4.1 million and £1.7 million, respectively. The decrease related to setrusumab was primarily driven by the licensing and collaboration agreement with Ultragenyx, under which Ultragenyx will fund global development of the program, and the decrease related to navicixizumab was driven by the global out-licensing agreement with OncXerna for the development and commercialization of navicixizumab.
Administrative expenses decreased by £5.3 million, or 25%, from £21.2 million in 2020 to £15.9 million in 2021. The decrease was primarily driven by a £4.0 million reduction in legal and professional fees in 2021, reflecting lower activity and related transaction costs in 2021 compared to 2020. Premises-related costs decreased by £1.3 million in 2021 primarily due to one-off transaction costs in 2020 associated with renegotiation of our office lease in Redwood City.
Net profit attributable to equity holders for the year 2021 was a net profit of £12.7 million, compared to a net loss of £163.6 million in 2020, reflecting an operating loss of £20.9 million and a gain of £40.0 million, due to changes in the fair value of financial instruments resulting from an unrealized gain on warrants.
Total ordinary shares outstanding at December 31, 2021 were approximately 585 million. Total ADSs outstanding at December 31, 2021 were approximately 116.5 million, with each ADS representing five ordinary shares of the Company.
Cash and short-term deposits totaled £94.3 million at December 31, 2021.