Mereo BioPharma Group plc
For the period ended Jun 30, 2025. Filed Aug 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 12, 2025
MREO$0.28+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0000950170-25-069816
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-12.
0001193125-25-178489
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 115 current paragraphs.
58 unchanged; 20 reworded; 25 added; 2 removed; 1 previous and 12 current paragraphs rearranged.
Tables are not compared: 3 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Recent Developments
Current report
On July 9, 2025, we and our collaboration partner Ultragenyx announced that the randomized, placebo-controlled Phase 3 portion of the Orbit study evaluating setrusumab in pediatric and young adult patients with OI is progressing toward a final analysis consistent with the original plan, around the end of 2025. The Data Monitoring Committee met and informed Ultragenyx that setrusumab demonstrates an acceptable safety profile and Ultragenyx and the Company should continue the study to final analysis. In addition, the Cosmic study evaluating setrusumab in young pediatric patients aged 2 to <7 years old will also proceed to final analysis around the end of 2025.
Current report
Revenue
Current report
Revenue of $0.5 million for the three months ended June 30, 2025 comprised a one-time milestone payment of $0.5 million resulting from the achievement of a clinical milestone on leflutrozole by ReproNovo pursuant to the ReproNovo Licensing Agreement. No revenue was recognized for the three months ended June 30, 2024.
Current report
Cost of revenue
Current report
Cost of revenue for the three months ended June 30, 2025 was $0.1 million and represents amounts payable pursuant to the 2015 asset purchase agreement with Novartis for leflutrozole, under which the Company pays a percentage of proceeds resulting from milestone revenue received, subject to certain deductions and other amounts. No cost of revenue was recognized for the three months ended June 30, 2024.
Current report
Total R&D expenses increased by $0.4 million, from $4.9 million in the three months ended June 30, 2024 to $5.4 million in the three months ended June 30, 2025.
Current report
The increase was primarily due to increases of $2.2 million in R&D expenses for setrusumab offset by decreases of $1.5 million and $0.2 million in R&D expenses for alvelestat and etigilimab, respectively.
Current report
General and administrative expenses also includes $1.2 million in the three months ended June 30, 2025 of 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.
Current report
Comparison of six months ended June 30, 2025 and 2024
Current report
Revenue
Current report
Revenue of $0.5 million for the six months ended June 30, 2025 comprised a one-time milestone payment of $0.5 million resulting from the achievement of a clinical milestone on leflutrozole by ReproNovo pursuant to the ReproNovo Licensing Agreement. No revenue was recognized for the six months ended June 30, 2024.
Current report
Cost of revenue
Current report
Cost of revenue for the six months ended June 30, 2025 was $0.1 million and represents amounts payable pursuant to the 2015 asset purchase agreement with Novartis for leflutrozole, under which the Company pays a percentage of proceeds resulting from milestone revenue received, subject to certain deductions and other amounts. No cost of revenue was recognized for the six months ended June 30, 2024.
Current report
Total R&D expenses increased by $0.4 million, from $8.9 million in the six months ended June 30, 2024 to $9.3 million in the six months ended June 30, 2025.
Current report
General and administrative expenses
Current report
General and administrative expenses decreased by $1.0 million, from $13.8 million in the six months ended June 30, 2024 to $12.8 million in the six months ended June 30, 2025. The decrease was primarily due to lower professional fees.
Current report
General and administrative expenses also includes $2.3 million in the six months ended June 30, 2025 of 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.
Current report
Interest income and expense
Current report
Interest expense decreased by $0.4 million, from $0.6 million in the six months ended June 30, 2024 to $0.2 million in the six months ended June 30, 2025. The decrease was principally due to the conversion of convertible loan notes in February 2025, following which the Company had no significant remaining interest-bearing liabilities.
Current report
Foreign currency transaction (loss)/gain
Current report
The foreign currency translation adjustment for the six months ended June 30, 2025 was a gain of $10.2 million, compared to a loss of $0.8 million in the six months ended June 30, 2024. This change primarily reflects the impact of a significant weakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the six months ended June 30, 2025, compared to a slight strengthening of U.S. dollars in the six months ended June 30, 2024.
Current report
Net cash provided by financing activities for the six months ended June 30, 2025 was $0.3 million, a decrease of $46.5 million from $46.8 million in the six months ended June 30, 2024. The decrease principally represents the net proceeds of $46.2 million from the underwritten registered direct offering in the six months ended June 30, 2024 with no similar amounts recognized in the six months ended June 30, 2025.
Current report
Recent accounting pronouncements
Current report
There have been no recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance other than those previously included in the 2024 Annual Report that are of significance or potential significance to the Company. The Company is continuing to evaluate the impact of the recently issued pronouncements that are effective in future periods and were discussed in its 2024 Annual Report.
Removed paragraphs (2)
Previous report
Total R&D expenses decreased by $0.1 million, from $4.0 million in the three months ended March 31, 2024 to $3.9 million in the three months ended March 31, 2025.
Previous report
Net cash provided by financing activities for the three months ended March 31, 2025 was $0.4 million, compared to net cash provided by financing activities of less than $0.1 million in the three months ended March 31, 2024. The increase principally represents the $0.5 million received upon exercise of the 2020 Novartis Warrants.
Reworded paragraphs (20)
Previous wording
The increase in program expenses for setrusumab was primarily driven by amounts due under the manufacturing and supply agreement with our partner, Ultragenyx, ongoing activities related to real-world evidence programs and medical affairs activities in Europe and input into development, regulatory and manufacturing plans with Ultragenyx, who fund the global development of the program pursuant to our license and collaboration agreement.
Current wording
The increase in program expenses for setrusumab was primarily driven by amounts due under the manufacturing and supply agreement with our partner, Ultragenyx, as well as ongoing activities related to real-world evidence programs and medical affairs activities in Europe. This is in addition to costs we incur in relation to our collaboration with Ultragenyx, who fund the global development of the program, including input into development, regulatory and manufacturing plans.
Previous wording
The decrease in program expenses for alvelestat was primarily due to undertaking reduced drug formulation and manufacturing activities in preparation for the Phase 3 study in the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
Current wording
The decrease in program expenses for alvelestat was primarily due to the completion of the drug formulation and manufacturing activities undertaken in preparation for the Phase 3 study in the three months ended June 30, 2024.
Previous wording
General and administrative expenses increased by $1.4 million, from $5.9 million in the three months ended March 31, 2024 to $7.3 million in the three months ended March 31, 2025. The increase was primarily due to the recognition of a $1.7 million reduction in expenses in the three months ended March 31, 2024 for amounts received from our depository to reimburse certain expenses incurred by us in respect of our ADR program, partially offset by a net decrease in employee-related expenses and professional fees. A reimbursement in respect of our ADR program is anticipated in 2025.
Current wording
General and administrative expenses decreased by $2.4 million, from $7.9 million in the three months ended June 30, 2024 to $5.5 million in the three months ended June 30, 2025. The decrease was primarily due to the recognition of a $1.9 million reduction in expenses in the three months ended June 30, 2025 for amounts received from our depository to reimburse certain expenses incurred by us in respect of our ADR program as well as lower professional fees.
Previous wording
Interest income increased by less than $0.1 million, from $0.6 million in the three months ended March 31, 2024 to $0.7 million in the three months ended March 31, 2025, principally due to a higher cash and cash equivalents balance as a result of receiving the net proceeds of $46.2 million from the underwritten registered direct offering in June 2024, offset by lower interest rates earned.
Current wording
Interest income increased by less than $0.1 million, from $0.6 million in the three months ended June 30, 2024 to $0.6 million in the three months ended June 30, 2025, principally due to a higher cash and cash equivalents balance as a result of receiving the net proceeds of $46.2 million from the underwritten registered direct offering in June 2024, offset by lower interest rates earned.
Previous wording
Interest expense decreased by $0.1 million, from $0.3 million in the three months ended March 31, 2024 to $0.2 million in the three months ended March 31, 2025. The decrease was principally due to the conversion of convertible loan notes in February 2025.
Current wording
Interest expense decreased by $0.3 million, from $0.3 million in the three months ended June 30, 2024 to less than $0.1 million in the three months ended June 30, 2025. The decrease was principally due to the conversion of convertible loan notes in February 2025, following which the Company had no significant remaining interest-bearing liabilities.
Previous wording
The net foreign exchange loss for the three months ended March 31, 2025 was $2.8 million, compared to a gain of $0.6 million for the three months ended March 31, 2024. This change primarily reflects (i) the impact of a weakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the three months ended March 31, 2025, compared to a strengthening of U.S. dollars in the three months ended March 31, 2024, and (ii) higher U.S. dollar balances following the underwritten registered direct offering in June 2024.
Current wording
The net foreign exchange loss for the three months ended June 30, 2025 was $5.3 million, compared to a gain of less than $0.1 million for the three months ended June 30, 2024. This change primarily reflects (i) the impact of a weakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the three months ended June 30, 2025, compared to a strengthening of U.S. dollars in the three months ended June 30, 2024, and (ii) higher U.S. dollar balances following the underwritten registered direct offering in June 2024.
Previous wording
The benefit from research and development tax credit decreased by $0.3 million, from $0.5 million in the three months ended March 31, 2024 to $0.2 million in the three months ended March 31, 2025. This decrease reflects a combination of a lower level of qualifying expenditure in the three months ended March 31, 2025 and a reduction in the proportion of qualifying expenditure that can be reclaimed under the scheme rules. The income tax benefit represents eligible cash rebates paid or receivable from the tax authorities in the jurisdictions within which we operate for eligible types of research and development activities and associated expenditure.
Current wording
The benefit from research and development tax credit increased by $0.4 million, from $0.4 million in the three months ended June 30, 2024 to $0.7 million in the three months ended June 30, 2025. This increase reflects a higher level of qualifying expenditure in the three months ended June 30, 2025. The income tax benefit represents eligible cash rebates paid or receivable from the tax authorities in the jurisdictions within which we operate for eligible types of research and development activities and associated expenditure.
Previous wording
The foreign currency translation adjustment for the three months ended March 31, 2025 was a gain of $3.6 million, compared to a loss of $0.8 million in the three months ended March 31, 2024. This change primarily reflects the impact of a greater weakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the three months ended March 31, 2025, compared to a lesser weakening of U.S. dollars in the three months ended March 31, 2024.
Current wording
The foreign currency translation adjustment for the three months ended June 30, 2025 was a gain of $6.6 million, compared to a gain of less than $0.1 million in the three months ended June 30, 2024. This change primarily reflects the impact of a greater weakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the three months ended June 30, 2025, compared to a lesser weakening of U.S. dollars in the three months ended June 30, 2024 .
Previous wording
The decrease was primarily due to decreases of $1.2 million and $0.1 million in R&D expenses for alvelestat and etigilimab, offset by an increase of $1.3 million in R&D expenses for setrusumab.
Current wording
The increase was primarily due to an increase of $3.6 million in R&D expenses for setrusumab, offset by decreases of $2.8 million and $0.4 million in R&D expenses for alvelestat and etigilimab, respectively.
Previous wording
The total change in fair value of warrants for the three months ended March 31, 2025 was an unrealized gain of $0.4 million, compared to an unrealized loss of $0.4 million in the three months ended March 31, 2024. The unrealized gain in the three months ended March 31, 2025 was primarily due to the impact of a decrease in the price of the Company’s ADSs on the value of the warrant liabilities, whereas in the three months ended March 31, 2024, the unrealized loss was primarily due to an increase in the ADS price in the period.
Current wording
The total change in fair value of warrants in the six months ended June 30, 2025 was an unrealized gain of $0.3 million, compared to an unrealized loss of $0.5 million in the six months ended June 30, 2024. The unrealized gain in the six months ended June 30, 2025 was primarily due to the impact of a decrease in the price of the Company’s ADSs on the value of the warrant liabilities, whereas in the six months ended June 30, 2024, the unrealized loss was primarily due to an increase in the ADS price in the period.
Previous wording
$1.0 million under the global license agreement with ReproNovo for leflutrozole in December 2023.
Current wording
$1.0 million under the global license agreement with ReproNovo for leflutrozole in December 2023 and a further milestone payment of $0.5 million in July 2025.
Previous wording
In addition, we enter into contracts in the ordinary course of business with CROs, CMOs, and other vendors, including Ultragenyx for the manufacture of setrusumab as described in our 2024 Annual Report in “Item 1. Business—Material Agreements—Agreements with Ultragenyx for Setrusumab”, to assist in the performance of its research and development activities and other services and products for operating purposes. The contracts with CROs generally provide for termination on notice, and therefore are cancelable contracts. We have manufacturing commitments with CMOs of $0.3 million and $0.5 million as of March 31, 2025 and December 31, 2024, respectively.
Current wording
In addition, we enter into contracts in the ordinary course of business with CROs, CMOs, and other vendors, including Ultragenyx for the manufacture of setrusumab as described in our 2024 Annual Report in “Item 1. Business—Material Agreements—Agreements with Ultragenyx for Setrusumab”, to assist in the performance of its research and development activities and other services and products for operating purposes. The contracts with CROs generally provide for termination on notice, and therefore are cancelable contracts. We have manufacturing commitments with CMOs of $0.7 million and $0.5 million as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
Comparison of the three months ended March 31, 2025 and 2024
Current wording
Comparison of the six months ended June 30, 2025 and 2024
Previous wording
The table below summarizes our cash flows (used in) from operating, investing and financing activities for the three months ended March 31, 2025 and 2024.
Current wording
The table below summarizes our cash flows (used in) from operating, investing and financing activities for the six months ended June 30, 2025 and 2024.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2025 was $8.3 million, an increase of $0.3 million from $8.0 million in the three months ended March 31, 2024. This increase is primarily due toreceipt of $1.7 million from our depository to reimburse certain expenses incurred by us in respect of our ADR program and receipt of $2.0 million from a claim on our Directors and Officers insurance policy to reimburse us for certain legal and professional costs incurred in prior years in the three months ended March 31, 2024 with no similar amounts recognized in the three months ended March 31, 2025. These increases were partially offset by approximately $2.3 million in lower cash operating expenses andreceipt of $1.1 million in R&D tax credits in the three months ended March 31, 2025.
Current wording
Net cash used in operating activities for the six months ended June 30, 2025 was $16.0 million, an increase of $0.1 million from $15.9 million in the six months ended June 30, 2024. This increase is principally due to receipt of $2.0 million from a claim on our Directors and Officers insurance policy to reimburse us for certain legal and professional costs incurred in prior years in the six months ended June 30, 2024 with no similar amounts recognized in the six months ended June 30, 2025. This increase was offset by receipt of $1.1 million in R&D tax credits in the six months ended June 30, 2025 and approximately $0.8 million in lower other net cash operating expense.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2025 was $0.3 million, a decrease of $0.4 million from $0.7 million in the three months ended March 31, 2024. The decrease is principally due to lower payments to acquire intangible assets in the three months ended March 31, 2025.
Current wording
Net cash used in investing activities for the six months ended June 30, 2025 was $0.3 million, a decrease of $0.4 million from $0.7 million in the six months ended June 30, 2024. The decrease is principally due to lower payments to acquire intangible assets in the six months ended June 30, 2025.
Previous wording
As of March 31, 2025, we had an accumulated deficit of $472.0 million. We expect to continue to report significant operating losses for the foreseeable future as we continue our research and development efforts and seek to obtain regulatory approval of our product candidates and any future product we develop.
Current wording
As of June 30, 2025, we had an accumulated deficit of $486.6 million. We expect to continue to report significant operating losses for the foreseeable future as we continue our research and development efforts and seek to obtain regulatory approval of our product candidates and any future products we develop.
Previous wording
experience any delays or encounter any issues from any of the above, including but not limited to failed studies, complex results, safety issues, or other regulatory challenges.
Current wording
experience any delays or encounter any issues from any of the above, including but not limited to failed studies, complex results, safety issues, manufacturing issues, or other regulatory challenges.
Previous wording
the performance of our collaborators and partners under the existing agreements on setrusumab, navicixizumab and, leflutrozole;
Current wording
the performance of our collaborators and partners under the existing agreements on setrusumab, leflutrozole and navicixizumab;
Previous wording
An accounting estimate is considered critical if both (i) the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment involved, and (ii) the impact within a reasonable range of outcomes of the estimates and assumptions is material to our unaudited condensed consolidated financial statements. We believe that there are no estimates and assumptions made in our unaudited condensed consolidated financial statements that rise to this level. Our significant accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting
Current wording
An accounting estimate is considered critical if both (i) the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment involved, and (ii) the impact within a reasonable range of outcomes of the estimates and assumptions is material to our unaudited condensed consolidated financial statements. We believe that there are no estimates and assumptions made in our unaudited condensed consolidated financial statements that rise to this level. Our significant accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our 2024 Annual Report, which was filed with the SEC on March 26, 2025. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected. There have been no significant changes to our critical accounting estimates from those described in our 2024 Annual Report.
Rearranged current paragraphs (12)
Current report — wording carried from elsewhere
The total change in fair value of warrants in the three months ended June 30, 2025 was an unrealized loss of $0.1 million, compared to an unrealized loss of $0.1 million in the three months ended June 30, 2024, both of which were primarily due to the impact of decreases in the price of the Company’s ADSs on the value of the warrant liabilities.
Current report — wording carried from elsewhere
The following table sets forth Mereo’s results of operations for the six months ended June 30, 2025 and 2024.
Current report — wording carried from elsewhere
Research and development (“R&D”) expenses
Current report — wording carried from elsewhere
The following table sets forth our R&D expenses by product development program for the six months ended June 30, 2025 and 2024.
Current report — wording carried from elsewhere
The increase in program expenses for setrusumab was primarily driven by amounts due under the manufacturing and supply agreement with our partner, Ultragenyx, as well as ongoing activities related to real-world evidence programs and medical affairs activities in Europe. This is in addition to costs we incur in relation to our collaboration with Ultragenyx, who fund the global development of the program, including input into development, regulatory and manufacturing plans.
Current report — wording carried from elsewhere
The decrease in program expenses for alvelestat was primarily due to the completion of the drug formulation and manufacturing activities undertaken in preparation for the Phase 3 study in the six months ended June 30, 2024.
Current report — wording carried from elsewhere
Interest income increased by $0.1 million, from $1.2 million in the six months ended June 30, 2024 to $1.2 million in the six months ended June 30, 2025, principally due to a higher cash and cash equivalents balance as a result of receiving the net proceeds of $46.2 million from the underwritten registered direct offering in June 2024, offset by lower interest rates earned.
Current report — wording carried from elsewhere
Changes in the fair value of warrants
Current report — wording carried from elsewhere
The net foreign exchange loss for the six months ended June 30, 2025 was $8.1 million, compared to a gain of $0.6 million for the six months ended June 30, 2024. This change primarily reflects (i) the impact of a weakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the six months ended June 30, 2025, compared to a strengthening of U.S. dollars in the six months ended June 30, 2024, and (ii) higher U.S. dollar balances following the underwritten registered direct offering in June 2024.
Current report — wording carried from elsewhere
Benefit from research and development tax credit
Current report — wording carried from elsewhere
The benefit from research and development tax credit increased by $0.1 million, from $0.8 million in the six months ended June 30, 2024 to $0.9 million in the six months ended June 30, 2025. This increase reflects a combination of a higher level of qualifying expenditure in the six months ended June 30, 2025. The income tax benefit represents eligible cash rebates paid or receivable from the tax authorities in the jurisdictions within which we operate for eligible types of research and development activities and associated expenditure.
Current report — wording carried from elsewhere
Other comprehensive income– Foreign currency translation adjustments
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Estimates” in our 2024 Annual Report, which was filed with the SEC on March 26, 2025. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected. There have been no significant changes to our critical accounting estimates from those described in our 2024 Annual Report.