Mereo BioPharma Group plc
For the period ended Jun 30, 2026. Filed Aug 11, 2026.
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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, 2026 · Filed Aug 11, 2026
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 2026-03-31; filed 2026-05-12.
0001193125-26-218232
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001193125-26-343533
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 86 previous paragraphs and 117 current paragraphs.
55 unchanged; 25 reworded; 25 added; 6 removed; 0 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 Events
Current report
Setrusumab (BPS-804/UX143) for the Treatment of Osteogenesis Imperfecta (OI)
Current report
In December 2025 we, and our partner Ultragenyx, announced that the Phase 3 Orbit and Cosmic studies for our lead program setrusumab in OI did not achieve their primary endpoint of reduction in annualized clinical fracture rate compared to placebo (Orbit) or bisphosphonates (Cosmic).
Current report
In January 2026, topline safety and efficacy data from both studies were presented and included data on bone mineral density, vertebral fractures, and patient reported outcomes on pain and physical function. We believe the data across two global Phase 3 studies suggest that setrusumab has a meaningful effect on bone disease in OI. We will continue to engage regulatory agencies to determine the necessary data to support a regulatory filing and if there is a potential path forward for setrusumab.
Current report
Alvelestat (MPH-966) for the Treatment of Severe Alpha-1 Antitrypsin Deficiency-Associated Lung Disease (AATD-LD)
Current report
On August 11, 2026, we entered into an Option and License Agreement (the "Sentynl Agreement") with Sentynl Therapeutics, Inc. (“Sentynl”), a U.S.-based biopharmaceutical company, for the U.S. commercial and global manufacturing rights to alvelestat for AATD-LD. Alvelestat is a neutrophil elastase inhibitor being readied for Phase 3 and, if approved, would be the first oral treatment for this rare, progressive genetic lung disease affecting an estimated 75,000 people in North America and 110,000 in Europe.
Current report
Under the terms of the Sentynl Agreement, we will receive a non-refundable option fee and, on option exercise, we are eligible to receive $40 million in upfront and R&D payments, up to $435 million in potential milestones, and double-digit tiered royalties on U.S. sales of alvelestat. We will lead the global Phase 3 study and regulatory interactions until the study is completed. During the option period, we and Sentynl will collaborate to advance manufacturing and refine the Phase 3 study design.
Current report
Revenue
Current report
No revenue was recognized for the three months ended June 30, 2026. 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.
Current report
Cost of revenue
Current report
No cost of revenue was recognized for the three months ended June 30, 2026. 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.
Current report
Research and development ("R&D") expenses
Current report
Total R&D expenses decreased by $3.6 million, from $5.4 million in the three months ended June 30, 2025 to $1.8 million in the three months ended June 30, 2026.
Current report
The decrease was primarily due to reductions of $2.6 million in R&D expenses for setrusumab and $1.0 million for alvelestat.
Current report
Interest income
Current report
Foreign currency transaction loss, net
Current report
Comparison of six months ended June 30, 2026 and 2025
Current report
Revenue
Current report
No revenue was recognized for six months ended June 30, 2026. 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.
Current report
Cost of revenue
Current report
No cost of revenue was recognized for the six months ended June 30, 2026. 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.
Current report
R&D expenses
Current report
Total R&D expenses decreased by $2.7 million, from $9.3 million in the six months ended June 30, 2025 to $6.6 million in the six months ended June 30, 2026.
Current report
The decrease was primarily due to reductions of $1.9 million in R&D expenses for alvelestat and $0.8 million for setrusumab.
Current report
General and administrative expenses
Removed paragraphs (6)
Previous report
Research and development expenses (“R&D expenses”)
Previous report
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 report
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 report
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 report
a)
Reworded paragraphs (25)
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 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.
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.
Previous wording
the recognition of a $1.9 million reduction in expenses in the three months ended March 31, 2026 for amounts received from our depository to reimburse certain expenses incurred by us in respect of our ADR program, whereas the corresponding amount in the prior year was recognized in the three months ended June 30, 2025;
Current wording
General and administrative expenses decreased by $0.3 million, from $5.5 million in the three months ended June 30, 2025 to $5.2 million in the three months ended June 30, 2026. The decrease was primarily due to reductions of approximately $2.2 million driven by delays to investment in pre-commercial activities to lay the foundation for the potential commercial launch of setrusumab in Europe, and other realized cost savings. These decreases were partially offset by 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, whereas the corresponding amount in the current year was recognized in the three months ended March 31, 2026.
Previous 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.
Current wording
Interest income decreased by $0.3 million, from $0.6 million in the three months ended June 30, 2025 to $0.3 million in the three months ended June 30, 2026, principally due to a combination of lower interest rates earned and lower average cash and cash equivalents balances in the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Previous 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.
Current wording
The net foreign exchange loss for the three months ended June 30, 2026 was $0.4 million, compared to a loss of $5.3 million for the three months ended June 30, 2025. This change primarily reflects the impact of a slight 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, 2026, compared to a more significant weakening of U.S. dollars in the three months ended June 30, 2025.
Previous 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.
Current wording
The benefit from research and development tax credit decreased by $0.6 million, from $0.7 million in the three months ended June 30, 2025 to $0.1 million in the three months ended June 30, 2026. This decrease reflects a lower level of qualifying expenditure in the three months ended June 30, 2026 than in the three months ended June 30, 2025.
Previous 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.
Current wording
The foreign currency translation adjustment for the three months ended June 30, 2026 was a gain of $0.3 million, compared to a gain of $6.6 million in the three months ended June 30, 2025. This change primarily reflects the impact of a slight weakening 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 June 30, 2026, compared to a more significant weakening of U.S. dollars in the three months ended June 30, 2025.
Previous 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.
Current wording
The decrease in program expenses for alvelestat was primarily due to the completion of activities undertaken in preparation for the potential Phase 3 study in the six months ended June 30, 2025.
Previous wording
The increase in program expenses for setrusumab was primarily driven by recognition of a $2.3 million payable for our share of certain costs related to the cancellation of manufacturing slots by Ultragenyx, partially offset by reductions of, and delays to, investment in manufacturing and ongoing activities, including medical affairs activities in Europe during the three months ended March 31, 2026.
Current wording
The decrease in program expenses for setrusumab was primarily driven by reductions of, and delays to, investment in manufacturing and ongoing activities, including medical affairs activities in Europe during the six months ended June 30, 2026, partially offset by an expense of $2.3 million for our share of certain costs related to the cancellation of manufacturing slots by Ultragenyx.
Previous 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.
Current wording
General and administrative expenses decreased by $3.5 million, from $12.8 million in the six months ended June 30, 2025 to $9.2 million in the six months ended June 30, 2026. The decrease was primarily due to delays to investment in pre-commercial activities to lay the foundation for the potential commercial launch of setrusumab in Europe, and other realized cost savings.
Previous 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.
Current wording
Interest expense decreased by $0.2 million, from $0.2 million in the six months ended June 30, 2025 to less than $0.1 million in the six months ended June 30, 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 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.
Current wording
The total change in the fair value of warrants in the six months ended June 30, 2026 was an unrealized gain of less than $0.1 million, compared to an unrealized gain of $0.3 million in the six months ended June 30, 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
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.
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 late 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
Comparison of the three months ended March 31, 2026 and 2025
Current wording
Comparison of the six months ended June 30, 2026 and 2025
Previous 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.
Current wording
The table below summarizes our cash flows (used in)/provided by operating, investing and financing activities for the six months ended June 30, 2026 and 2025.
Previous 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.
Current wording
Net cash used in operating activities for the six months ended June 30, 2026 was $10.4 million, a decrease of $5.6 million from $16.0 million in the six months ended June 30, 2025. This decrease is principally due to lower cash bonus payments of approximately $2.0 million and lower net operating cash flows of approximately $4.7 million, reflecting reduced R&D and General and administrative expenses in the period. These decreases were partially offset by receipt of $1.1 million in R&D tax credits in the six months ended June 30, 2025 with no similar amount received in the six months ended June 30, 2026.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2026 and 2025 were $0.3 million. In both periods, these cash flows relate to payments to acquire intangible assets
Current wording
Net cash used in investing activities for the six months ended June 30, 2026 and 2025 were $0.3 million. These cash flows primarily relate to payments to acquire intangible assets in both periods.
Previous 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.
Current wording
Net cash used in financing activities for the six months ended June 30, 2026 was less than $0.1 million, compared to net cash provided by financing activities of $0.3 million in the six months ended June 30, 2025. The decrease primarily represents the $0.5 million received upon exercise of the 2020 Novartis Warrants in the six months ended June 30, 2025, net of transaction costs.
Previous 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.
Current wording
As of June 30, 2026, we had an accumulated deficit of $514.5 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
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:
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 late 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, timing, and outcome of regulatory review of our product candidates, including post-marketing studies that could be required by regulatory authorities;
Current wording
the costs, timing, and outcome of regulatory review of our product candidates, including additional data or studies that could be required pre- or post-approval by regulatory authorities;
Previous wording
the timing and amount of revenue, if any, received from commercial sales of our product candidates;
Current wording
the timing and amount of revenue, if any, received from milestones, royalties or direct commercial sales of our product candidates;
Previous wording
the performance of our collaborators and partners under the existing agreements on setrusumab, vantictumab, leflutrozole and navicixizumab;
Current wording
the performance of our collaborators and partners under the existing agreements on setrusumab, alvelestat, vantictumab, leflutrozole and navicixizumab;
Previous wording
the extent to which we are able to acquire new product candidates or enter into licensing or collaboration arrangements for our product candidates, although we currently have no commitments or agreements to complete any such transactions;
Current wording
the extent to which we are able to acquire new product candidates or enter into licensing or collaboration arrangements for our product candidates, although we currently have no commitments or agreements that obligate us to enter into such arrangements, except for the Sentynl Agreement announced on August 11, 2026;
Previous wording
milestone payments under the Amended AstraZeneca Agreements; and
Current wording
milestone and deferred payments under the Amended AstraZeneca Agreements; and
Previous wording
Our revenues, if any, will be derived from development milestones or sales of any product candidates that we are able to successfully develop, receive regulatory approval for, and commercialize in future years. In the meantime, we will need to obtain substantial additional funds to achieve our business objective.
Current wording
Our revenues, if any, will be derived from milestones, royalties or direct commercial sales of any product candidates that we or our partners are able to successfully develop, receive regulatory approval for, and commercialize in future years. In the meantime, we will need to obtain substantial additional funds to achieve our business objective.
Rearranged current paragraphs (12)
Current report — wording carried from elsewhere
The decrease in program expenses for setrusumab was primarily driven by reductions of, and delays to, investment in manufacturing and ongoing activities, including medical affairs activities in Europe during the three months ended June 30, 2026.
Current report — wording carried from elsewhere
The decrease in program expenses for alvelestat was primarily due to the completion of activities undertaken in preparation for the potential Phase 3 study during 2025.
Current report — wording carried from elsewhere
The total change in fair value of warrants in the three months ended June 30, 2026 was an unrealized gain of less than $0.1 million, compared to an unrealized loss of $0.1 million in the three months ended June 30, 2025. The unrealized gain in the three months ended June 30, 2026 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 June 30, 2025 was primarily due to the impact of increases 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, 2026 and 2025.
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, 2026 and 2025.
Current report — wording carried from elsewhere
Interest income decreased by $0.6 million, from $1.2 million in the six months ended June 30, 2025 to $0.6 million in the six months ended June 30, 2026, principally due to a combination of lower interest rates earned and lower average cash and cash equivalents balances in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Current report — wording carried from elsewhere
Changes in the fair value of warrants
Current report — wording carried from elsewhere
The net foreign exchange gain for the six months ended June 30, 2026 was $1.3 million, compared to a loss of $8.1 million for the six months ended June 30, 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 six months ended June 30, 2026, compared to a significant weakening of U.S. dollars in the six months ended June 30, 2025.
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 decreased by $0.7 million, from $0.9 million in the six months ended June 30, 2025 to $0.2 million in the six months ended June 30, 2026. This decrease reflects a lower level of qualifying expenditure in the six months ended June 30, 2026 than in the six months ended June 30, 2025.
Current report — wording carried from elsewhere
Other comprehensive (loss)/income– Foreign currency translation adjustments
Current report — wording carried from elsewhere
The foreign currency translation adjustment for the six months ended June 30, 2026 was a loss of $1.5 million, compared to a gain of $10.2 million in the six months ended June 30, 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 six months ended June 30, 2026, compared to a significant weakening of U.S. dollars in the six months ended June 30, 2025.