(Alliance News) - Mereo BioPharma Group PLC on Tuesday posted a slightly narrowed loss for the first half of 2019 on a gain from its OncoMed Pharmaceuticals Inc acquisition, as well as lower administrative expenses.
Shares in Mereo were down 3.7% at 58.26 pence in London shortly before midday.
Mereo, which is developing drugs to treat rare diseases, reported an GBP18.7 million pretax loss for the six months ended June 30, narrowed a little from GBP19.4 million the year before.
This was partly due to an 8.5% drop in administrative expenses to GBP6.5 million from GBP7.1 million and partly due to GBP1.0 million of income recognised on the acquisition of a subsidiary versus none the year before.
This income stemmed from Mereo's obtaining a 100% controlling interest in OncoMed in April. The firm recorded a GBP3.7 million gain on bargain purchase but this was subject to losses generated from OncoMed, which reduced the value of the net assets acquired.
As at June 30, Mereo's cash resources totalled GBP36.1 million, having been GBP36.9 million the year before.
The second half of the year it expected to be "pivotal" for Mereo as it awaits publication of its 12-month complete dose data from its study of setrusumab in osteogenensis imperfecta - also known as brittle bone disease - in the next quarter.
Its phase 2 study looking at alvelestat in alpha-1 antitrypsin deficiency is currently expected to report in mid-2020. AATD is a rare genetic disease resulting in lung damage.
"We will continue to explore additional opportunities for alvelestat including [bronchiolitis obliterans syndrome] in lung transplant patients which fits with our focus on rare diseases with a high unmet medical need and also taps into our expertise in respiratory diseases," the company said.
Bronchiolitis obliterans syndrome is a condition in which the lung's airways, known as bronchioles, are obstructed by inflammation.
"We continue to focus on partnering opportunities for our non-rare disease products. In addition, with the recent activity in the rare bone disease area, we are evaluating potential partnering opportunities for setrusumab that could facilitate our 'go-to-market' commercialisation strategy and will continue to evaluate fund-raising opportunities through a balanced approach," Mereo added.