On August 13, 2024 Mereo BioPharma Group plc (NASDAQ: MREO) ("Mereo" or the "Company"), a clinical-stage biopharmaceutical company focused on rare diseases, reported its financial results for the second quarter ended June 30, 2024, and provided an update on recent corporate highlights (Press release, Mereo BioPharma, AUG 13, 2024, View Source [SID1234645813]). The Company reported cash and cash equivalents of $87.4 million as of June 30, 2024, which includes the net proceeds of the Company’s $50 million registered direct offering in June 2024. Mereo expects that this will provide cash runway into 2027, through multiple key inflection points.
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"We continued to make significant progress this quarter highlighted by additional positive data from the Phase 2 portion of the ongoing Phase 2/3 Orbit study in patients with OI," said Dr. Denise Scots-Knight, Chief Executive Officer of Mereo. "These data showed that the statistically significant annualized fracture rate reduction of 67% was maintained following treatment with setrusumab for at least 14 months of follow-up, further demonstrating the potential of setrusumab to generate long-term, clinically meaningful benefit for people living with OI. On alvelestat, we continue to work through the detailed regulatory submissions to ensure the AATD program is Phase 3-ready by the end of the year, in parallel with our ongoing discussions with multiple potential partners. With the proceeds from our June financing, we are well positioned through our key value inflection milestones and to support the ongoing pre-commercial activities essential for a successful launch of setrusumab in Europe following its potential approval."
Second Quarter 2024 Highlights, Recent Developments and Anticipated Milestones
Setrusumab (UX143)
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The Phase 3 Orbit and Cosmic studies of setrusumab in OI, conducted by our partner Ultragenyx, were fully enrolled as of April 30, 2024.
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On June 11, 2024, Mereo and Ultragenyx, announced positive 14-month results from the Phase 2 portion of the ongoing Phase 2/3 Orbit study (NCT05125809).
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The results from the Phase 2 portion of the Orbit study demonstrated that, as of the May 24, 2024 data cut-off date, treatment with setrusumab continued to significantly reduce incidence of fractures in patients with OI. Treatment with setrusumab also resulted in ongoing and meaningful improvements in lumbar spine bone mineral density (BMD) at month 12 without evidence of plateau.
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The median annualized rate of radiologically confirmed fractures across all 24 patients in the 2 years prior to treatment was 0.72. Following a mean treatment duration period of 16 months, the median annualized fracture rate was reduced by 67% to 0.00 (p=0.0014; n=24).
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The reduction in annualized fracture rates was associated with continued, clinically meaningful increases in BMD. At the 12-month time point, treatment with setrusumab resulted in a mean increase in lumbar spine BMD from baseline of 22% (p<0.0001, n=19) and an improvement of the lumbar spine BMD Z-score from a mean baseline of -1.73 to -0.49 at 12 months. The improvements in BMD and Z-scores were significant and consistent across all OI sub-types studied.
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As of the data cut-off date, there were no treatment-related serious adverse events observed in the study and no reported hypersensitivity reactions related to setrusumab.
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Research has been published from our osteogenesis imperfecta program: The 12-month results for the Phase 2b ASTEROID study in the Journal of Bone and Mineral Research and the first publication from SATURN (Systematic Accumulation of Treatment practices and Utilization, Real world evidence, and Natural history data for OI), which is expected to provide a coordinated data set across multiple treatment centers for OI across European countries, to support pricing and reimbursement decisions.
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More detailed data from the Phase 2 portion of the ongoing Phase 2/3 Orbit study will be presented at an upcoming scientific meeting
Alvelestat (MPH-966)
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The Company continues to engage with multiple potential partners for the development and commercialization for alvelestat in AATD
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At the end of Q2, Mereo submitted the initial validation work for SGRQ in AATD and the detailed Phase 3 package including the study protocol to the FDA in order to maintain the potential to start the Phase 3 study around the end of 2024.
Second Quarter 2024 Financial Results
Total research and development (R&D) expenses increased by $1.2 million, or 33%, from $3.7 million in the second quarter of 2023 to $4.9 million in the second quarter of 2024. The increase was primarily due to increases of $1.9 million and $0.9 million of R&D expenses for alvelestat and setrusumab, respectively, partially offset by a $1.5 million reduction in R&D expenses for etigilimab. The increase in the program expenses for alvelestat primarily relates to preparatory work for the Phase 3 study, including manufacturing and drug formulation activities, SGRQ validation activities and regulatory filings and interactions. The increase in program expenses for setrusumab is driven by additional activities in Europe and resources for the input into development, regulatory and manufacturing plans with our partner, Ultragenyx, as the global development program is funded by Ultragenyx pursuant to our license and collaboration agreement. The reduction in etigilimab expenses was primarily due to the winding down and completion during 2023 of the open label Phase 1b/2 basket study in combination with an anti-PD-1 in a range of tumor types.
General and administrative (G&A) expenses increased by $5.2 million from $2.7 million in the second quarter of 2023 to $7.9 million in the second quarter of 2024. The increase is primarily related to: (i) a $3.4 million reduction in expenses recognized in the second quarter of 2023 for amounts from our depository to reimburse certain expenses incurred by us in respect of our ADR program, whereas in 2024, $1.7 million was received from our depository in the first quarter of 2024; and (ii) pre-commercial activities to lay the foundation for the commercial launch of setrusumab in Europe, including those to support pricing and reimbursement by HTA authorities and payor decision-makers in Europe of $0.9 million.
Net loss for the second quarter of 2024 was $12.3 million, compared to $1.8 million during the second quarter of 2023, driven primarily by a one-time milestone payment of $9.0 million received in the second quarter of 2023, and increases in R&D expenses and G&A expenses in the second quarter of 2024.
As of June 30, 2024, the Company had cash and cash equivalents of $87.4 million, compared to $57.4 million as of December 31, 2023. This includes net proceeds of the $50 million underwritten registered direct offering priced at-the-market on June 14, 2024. The Company expects, based on current operational plans, that its existing cash and cash equivalents balance will enable it to fund its currently committed clinical trials, operating expenses including pre-commercial activities for setrusumab, and capital expenditure requirements into 2027. This guidance does not include any potential upfront payments associated with a partnership for alvelestat or business development activity around any of the Company’s non-core programs.
Total ordinary shares issued as of June 30, 2024, were 768,821,274. Total ADS equivalents as of June 30, 2024, were 153,764,254, with each ADS representing five ordinary shares of the Company.