Mereo BioPharma Group plc

Previous wording

We are a biopharmaceutical company focused on the development of innovative therapeutics for rare diseases. We have developed a portfolio of late-stage clinical product candidates. Our two rare disease product candidates are setrusumab for the treatment of OI and alvelestat for the treatment of severe alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD). Setrusumab has received orphan designation for OI from the European Commission ("EC") and the U.S. Food and Drug Administration ("FDA"), PRIME designation from the European Medicines Agency ("EMA") and has Breakthrough Therapy designation and rare pediatric disease designation from the FDA. Alvelestat has received orphan designation for AATD from the EC and the FDA, and Fast Track designation for the treatment of AATD-LD from the FDA. We also have an early stage rare disease program, vantictumab, for the treatment of a second bone disease, autosomal dominant osteopetrosis type 2. The global development of vantictumab is being funded and led by our partner, āshibio, Inc. ("āshibio"), and we retain the European commercial rights.

Current wording

We are a biopharmaceutical company focused on the development of innovative therapeutics for rare diseases. We have developed a portfolio of late-stage clinical product candidates. Our late-stage rare disease product candidates are setrusumab for the treatment of OI and alvelestat for the treatment of severe AATD-LD. Setrusumab has received orphan designation for OI from the European Commission (“EC”) and the U.S. Food and Drug Administration (“FDA”), PRIME designation from the European Medicines Agency (“EMA”) and has Breakthrough Therapy designation and rare pediatric disease designation from the FDA. Alvelestat has received orphan designation for AATD from the EC and the FDA, and Fast Track designation for the treatment of AATD-LD from the FDA. We also have an early-stage rare disease program, vantictumab, for the treatment of a second bone disease, ADO2. The global development of vantictumab is being funded and led by our partner, āshibio, Inc. (“āshibio”), and we retain the European commercial rights.

Previous wording

Our strategy is to selectively acquire and develop product candidates for rare diseases that have already received significant investment from large pharmaceutical and biotechnology companies and that have substantial pre-clinical, clinical and manufacturing data packages. Since our formation in March 2015, we have successfully executed on this strategy by acquiring six clinical-stage product candidates of which four were in rare diseases and oncology. Four of our six clinical-stage product candidates were acquired from large pharmaceutical companies and two were acquired in our merger with Mereo BioPharma 5, Inc. (formerly OncoMed Pharmaceuticals, Inc.) in 2019. We have successfully completed large, randomized Phase 2 clinical trials for four of our product candidates and the Phase 1b portion of a Phase 1b/2 for a fifth product candidate.

Current wording

Our strategy is to selectively acquire and develop product candidates for rare diseases that have already received significant investment from large pharmaceutical and biotechnology companies and that have substantial pre-clinical, clinical and manufacturing data packages. Since our formation in March 2015, we have successfully executed on this strategy by acquiring all of our clinical-stage product candidates of which three were in rare diseases. We have successfully completed large, randomized Phase 2 clinical trials for four of our product candidates and the Phase 1b portion of a Phase 1b/2 for a fifth product candidate, and we and our partner Ultragenyx announced the results from two Phase 3 studies for our lead program setrusumab in OI in December 2025.

Previous wording

Total R&D expenses increased by $1.1 million, from $3.2 million in the three months ended September 30, 2024 to $4.3 million in the three months ended September 30, 2025.

Current wording

Total R&D expenses increased by $0.8 million, from $3.9 million in the three months ended March 31, 2025 to $4.7 million in the three months ended March 31, 2026.

Previous wording

The increase was primarily due to increases of $0.9 million in R&D expenses for setrusumab and $0.5 million for alvelestat, partially offset by a reduction of $0.2 million in R&D expenses for etigilimab.

Current wording

The increase was primarily due to increases of $1.8 million in R&D expenses for setrusumab, partially offset by reductions of $0.9 million in R&D expenses for alvelestat.

Previous wording

The decrease in program expenses for alvelestat was primarily due to the completion of activities undertaken in preparation for the Phase 3 study, including drug formulation and manufacturing, in the nine months ended September 30, 2024.

Current wording

The decrease in program expenses for alvelestat was primarily due to completion of activities undertaken in preparation for the potential Phase 3 study in the three months ended March 31, 2025.

Previous wording

General and administrative expenses decreased by $0.2 million, from $6.2 million in the three months ended September 30, 2024 to $6.0 million in the three months ended September 30, 2025. The decrease was primarily due to lower professional fees.

Current wording

General and administrative expenses decreased by $3.3 million, from $7.3 million in the three months ended March 31, 2025 to $4.0 million in the three months ended March 31, 2026. The decrease was primarily due to:

Previous wording

General and administrative expenses also includes $0.8 million in the three months ended September 30, 2025 of pre-commercial activities to lay the foundation for the potential commercial launch of setrusumab in Europe, if approved, including those to support pricing and reimbursement by HTA authorities and payor decision-makers in Europe.

Current wording

reductions of approximately $1.4 million driven by delays to investment in pre-commercial activities to lay the foundation for the potential commercial launch of setrusumab in Europe, if approved, and other realized cost savings.

Previous wording

Interest income decreased by $0.5 million, from $1.0 million in the three months ended September 30, 2024 to $0.5 million in the three months ended September 30, 2025, principally due to a combination of lower interest rates earned and lower average cash and cash equivalents balances in the three months ended September 30, 2025 compared to the three months ended September 30, 2024. These lower balances were the result of having received the net proceeds of $46.2 million from the underwritten registered direct offering in June 2024.

Current wording

Interest income decreased by $0.3 million, from $0.7 million in the three months ended March 31, 2025 to $0.3 million in the three months ended March 31, 2026, principally due to a combination of lower interest rates earned and lower average cash and cash equivalents balances in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous wording

Interest expense decreased by $0.3 million, from $0.4 million in the three months ended September 30, 2024 to less than $0.1 million in the three months ended September 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 wording

Interest expense decreased by $0.2 million, from $0.2 million in the three months ended March 31, 2025 to less than $0.1 million in the three months ended March 31, 2026. 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 total change in fair value of warrants in the three months ended September 30, 2025 was an unrealized gain of $0.2 million, compared to an unrealized loss of $0.1 million in the three months ended September 30, 2024. The unrealized gain in the three months ended September 30, 2025 was primarily due to the impact of decreases in the price of the Company’s ADSs on the value of the warrant liabilities, while the unrealized loss in the three months ended September 30, 2024 was primarily due to increases in the price of ADSs.

Current wording

The total change in fair value of warrants in the three months ended March 31, 2026 was an unrealized gain of less than $0.1 million, compared to an unrealized gain of $0.4 million in the three months ended March 31, 2025. The unrealized gain in both periods was primarily due to the impact of decreases in the price of the Company’s ADSs on the value of the warrant liabilities.

Previous wording

The net foreign exchange gain for the three months ended September 30, 2025 was $1.9 million, compared to a loss of $6.4 million for the three months ended September 30, 2024. This change primarily reflects the impact of a strengthening 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 September 30, 2025, compared to a weakening of U.S. dollars in the three months ended September 30, 2024.

Current wording

The net foreign exchange gain for the three months ended March 31, 2026 was $1.6 million, compared to a loss of $2.8 million for the three months ended March 31, 2025. This change primarily reflects the impact of a strengthening 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, 2026, compared to a weakening of U.S. dollars in the three months ended March 31, 2025.

Previous wording

The benefit from research and development tax credit increased by $0.2 million, from $0.2 million in the three months ended September 30, 2024 to $0.4 million in the three months ended September 30, 2025. This increase reflects a higher level of qualifying expenditure in the three months ended September 30, 2025. The income tax benefit represents eligible cash rebates paid or receivable from the tax authorities in the jurisdictions within which the Company operates for eligible types of research and development activities and associated expenditure.

Current wording

The benefit from research and development tax credit decreased by $0.1 million, from $0.2 million in the three months ended March 31, 2025 to $0.1 million in the three months ended March 31, 2026. This decrease reflects a lower level of qualifying expenditure in the three months ended March 31, 2026 than in the three months ended March 31, 2025.

Previous wording

The foreign currency translation adjustment for the three months ended September 30, 2025 was a loss of $2.3 million, compared to a gain of $7.2 million in the three months ended September 30, 2024. This change primarily reflects the impact of a strengthening in the value of U.S. dollars when translating pound sterling functional currency balances into our presentational currency of U.S. dollars in the three months ended September 30, 2025, compared to a weakening of U.S. dollars in the three months ended September 30, 2024.

Current wording

The foreign currency translation adjustment for the three months ended March 31, 2026 was a loss of $1.7 million, compared to a gain of $3.6 million in the three months ended March 31, 2025. This change primarily reflects the impact of a strengthening in the value of U.S. dollars when translating pound sterling functional currency balances into our presentational currency of U.S. dollars in the three months ended March 31, 2026, compared to a weakening of U.S. dollars in the three months ended March 31, 2025.

Previous wording

Under the current business plan and cash flow forecasts, and in consideration of our ongoing research and development efforts and our general corporate funding requirements, we anticipate that our current on-hand cash resources will extend into 2027. However, we will need additional external funding to complete our development plans and potentially commercialize selected rare disease products. We plan to fund our operations through cash on hand and a combination of non-dilutive funding sources, public or private equity or debt financing or other sources.

Current wording

Under the current business plan and cash flow forecasts, and in consideration of our ongoing research and development efforts and our general corporate funding requirements, we anticipate that our current on-hand cash resources will extend into mid-2027. However, we will need additional external funding to complete our development plans and potentially commercialize selected rare disease products. We plan to fund our operations through cash on hand and a combination of non-dilutive funding sources, public or private equity or debt financing or other sources.

Previous wording

We do not currently have any approved product candidates and as a result, have not generated any revenue from product sales. As a result, to date, we have financed our operations primarily through the issuances of our equity securities, convertible debt and warrants. These offerings have raised approximately $259.0 million, including through the $50.0 million underwritten registered direct offering in June 2024 and the $12.0 million “at-the-market” offering pursuant to our Open Market Sale Agreement with Jefferies LLC in July 2023 (all amounts are gross proceeds before fees and discounts).

Current wording

We do not currently have any approved product candidates and as a result, have not generated any revenue from product sales. As a result, to date, we have financed our operations primarily through the issuances of our equity securities, convertible debt and warrants. These offerings have raised approximately $259 million, including through the $50.0 million underwritten registered direct offering in June 2024 and the $12.0 million “at-the-market” offering pursuant to our Open Market Sale Agreement with Jefferies LLC in July 2023 (all amounts are gross proceeds before fees and discounts).

Previous wording

$4.0 million under the license and collaboration agreement with Feng Biosciences (formerly OncXerna) for navicixizumab in 2020 and a further milestone payment of $2.0 million in 2022; and

Current wording

$4.0 million under the license and collaboration agreement with Feng Biosciences, Inc. (formerly OncXerna Therapeutics, Inc.) for navicixizumab in 2020 and a further milestone payment of $2.0 million in 2022; and

Previous 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 2025.

Current wording

$1.0 million under the global license agreement with ReproNovo SA for leflutrozole in 2023 and a further milestone payment of $0.5 million in 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 $0.1 million and $0.5 million as of September 30, 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 2025 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 no manufacturing commitments with CMOs as of March 31, 2026 and December 31, 2025.

Previous wording

Comparison of the nine months ended September 30, 2025 and 2024

Current wording

Comparison of the three months ended March 31, 2026 and 2025

Previous wording

The table below summarizes our cash flows (used in)/provided by operating, investing and financing activities for the nine months ended September 30, 2025 and 2024.

Current wording

The table below summarizes our cash flows (used in)/provided by operating, investing and financing activities for the three months ended March 31, 2026 and 2025.

Previous wording

receipt of $3.3 million in R&D tax credits in the nine months ended September 30, 2025; and

Current wording

Net cash used in operating activities for the three months ended March 31, 2026 was $4.3 million, a decrease of $4.0 million from $8.3 million in the three months ended March 31, 2025. This decrease is principally due to lower cash bonus payments of approximately $2.0 million, receipt of $1.9 million from our depository to reimburse certain expenses incurred by us in respect of our ADR program and lower net cash operating payments of approximately $1.2 million. These decreases were partially offset by receipt of $1.1 million in R&D tax credits in the three months ended March 31, 2025 with no similar amount received in the three months ended March 31, 2026.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2025 was $0.3 million, a decrease of $45.9 million from $46.2 million in the nine months ended September 30, 2024. The decrease primarily represents the net proceeds of $46.2 million from the underwritten registered direct offering in the nine months ended September 30, 2024 with no similar financing activities in the nine months ended September 30, 2025.

Current wording

Net cash used in financing activities for the three months ended March 31, 2026 was less than $0.1 million, compared to net cash provided by financing activities of $0.4 million in the three months ended March 31, 2025. The decrease primarily represents the $0.5 million received upon exercise of the 2020 Novartis Warrants in the three months ended March 31, 2025.

Previous wording

As of September 30, 2025, we had an accumulated deficit of $493.7 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 candidates we develop.

Current wording

As of March 31, 2026, we had an accumulated deficit of $507.5 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 candidates we develop.

Previous wording

seek regulatory approvals for any of our product candidates that successfully complete clinical trials;

Current wording

seek regulatory approvals for any of our product candidates;

Previous wording

We expect that our existing cash and cash equivalents will enable us to fund our currently committed clinical trials, operating expenses and capital expenditure requirements into 2027. We have based these estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development of our product candidates and any future product candidates and because the extent to which we may enter into collaborations with third parties for development of any of our product candidates is unknown, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates. Our future capital requirements will depend on many factors, including:

Current wording

We expect that our existing cash and cash equivalents will enable us to fund our currently committed clinical trials, operating expenses and capital expenditure requirements into mid-2027. We have based these estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development of our product candidates and any future product candidates and because the extent to which we may enter into collaborations with third parties for development of any of our product candidates is unknown, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates. Our future capital requirements will depend on many factors, including:

Previous wording

the costs for our activities related to our ongoing collaboration with Ultragenyx for setrusumab for the treatment of children and adults with OI, including the costs for our preparation for the potential commercialization of setrusumab, if approved, in Europe and the U.K; and potential future costs for the alvelestat program in AATD;

Current wording

the costs for our activities related to our ongoing collaboration with Ultragenyx for setrusumab for the treatment of children and adults with OI, including the costs for our preparation for the potential commercialization of setrusumab, if approved, in Europe and the U.K; and costs associated with our alvelestat program in AATD;