MPH.L Regulatory News (MPH)

Mereo BioPharma Group plc

("Mereo" or the "Company" or the "Group")

Business Update 

Significant clinical progress; on track to deliver key value inflection points in 2017

London, December 12 2016 - Mereo BioPharma Group plc (AIM: MPH), a clinical stage, UK-based, biopharmaceutical company focused on rare and specialty diseases, is pleased to provide an update on its three clinical development programmes in addition to a general corporate update. The Company also announces that it intends to publish preliminary results for its financial year ending December 31, 2016 on February 27, 2017.

Highlights

· First potential pivotal study for BPS-804 (osteogenesis imperfecta) expected to start in H1 2017

· On track to deliver data in H2 2017 from Phase 2 studies for acumapimod (AECOPD) and BGS-649 (hypogonadal hypogonadism)

· Outcome of the interim blinded analysis of the BGS-649 study to potentially eliminate ineffective dose levels, expected Q1 2017

· Strengthened the intellectual property protection across the portfolio

· Balance sheet remains strong, with unaudited cash balance of £57.9 million as of 30 November 2016

· Evaluating additional opportunities to strengthen our rare and specialty disease portfolio

Pipeline update

BPS-804 for osteogenesis imperfecta (brittle bone disease)

Following feedback from the regulators, the first potential pivotal study for orphan drug BPS-804, an anti-sclerostin antibody, in patients with osteogenesis imperfecta (OI) is expected to commence in H1 2017. This will be a randomised, placebo controlled, dose-ranging study enrolling at least 120 patients with Type I, Type III or Type IV OI. The primary endpoint will be based on high-resolution peripheral quantitative computed tomography (HR-pQCT) images, a novel 3D image processing technique that can be used to assess bone quality and strength. Data will be collected at six and twelve months following the commencement of treatment. Bone mineral density (BMD; measured by Dual-energy X-ray absorptiometry (DEXA)), bone biomarkers and several patient reported outcomes (PROs) will also be measured. Interim efficacy data from this study, following six months treatment, are now expected to be available in H1 2018.

Acumapimod (BCT -197) for acute exacerbations of COPD (AECOPD)

The Phase 2 dose-ranging study with acumapimod, a p38 MAP kinase inhibitor, for treatment of the underlying inflammation in patients with acute exacerbation of COPD (AECOPD) is on track to deliver data in H2 2017. The study is recruiting 255 AECOPD patients to assess the impact of two different dose levels versus placebo on top of existing standard of care.

BGS-649 for the treatment of hypogonadal hypogonadism (HH)

The Phase 2b dose-confirmation study with the once-weekly, orally administered, aromatase inhibitor, BGS-649, for the treatment of symptomatic HH in obese men, is on track to deliver data in H2 2017. The study is recruiting 260 patients with HH to assess three different dose levels compared to placebo. The primary objective of this trial is to demonstrate the normalisation of testosterone in a significantly greater percentage of patients receiving BGS-649 compared to those receiving placebo and to establish the lowest effective dose of BGS-649. The Company is also examining several PROs in the trial. Results of an interim blinded analysis, to potentially eliminate any dose that has not normalised testosterone levels, are expected in Q1 2017.

The Company has started enrolling patients who have previously been treated for six months with BGS-649 in the Phase 2b dose confirmation study into the six month Phase 2b extension study, to assess the safety of longer-term treatment with BGS-649. This study is expected to recruit up to 120 patients.

The Company attended the FDA Advisory Committee on secondary hypogonadism on 6th December 2016 and was encouraged that the FDA and the Committee recognised the unmet medical need and the need to study symptomatic patients in clinical trials.

Corporate update

Balance Sheet remains strong

The Company's balance sheet remains strong, with sufficient cash to fund the key clinical milestones which the Company believes will be significant value inflection points. As of 30 November 2016 the Company had an unaudited cash balance of £57.9 million.

Intellectual property portfolio strengthened

The Company has expanded its intellectual property protection across the portfolio through both new patent applications and the grant of pending patent applications for acumapimod, BPS-804, and BGS-649 in the US, EU and other territories.

Triaging additional opportunities in rare and specialty diseases

A key part of Mereo's strategy is to expand its portfolio of innovative clinical stage products in areas where there is high unmet medical need. The Company continues to evaluate additional potential candidates in rare and specialty diseases, which have strong scientific rationale and a clear path to significant value generating inflection points, from a number of large pharmaceutical and biotechnology companies.

Dr Denise Scots-Knight, Chief Executive Officer of Mereo BioPharma Group plc, commented:

"We continue to make substantial progress in the clinical development of our initial product portfolio following the formal launch of the Company just under a year and a half ago. We remain focused on delivering a number of significant value inflection points as we look forward to 2017.

"In line with our stated strategy, and with all three acquired programmes in the clinic in 2017, we are evaluating additional opportunities to strengthen our rare and specialty disease portfolio and remain in discussions with a number of large pharmaceutical and biotechnology companies. We believe our novel business model aligns our interests with the drug development needs of these organisations where significant internal prioritisation for strategic and capital allocation reasons limits their ability to fund their entire pipeline of research and development stage assets.

"We remain confident that we are well positioned to build a scalable and sustainable speciality pharmaceutical business that will bring forward important therapies in areas of high patient need and will generate significant shareholder value."

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About Mereo

Mereo is a UK-based biopharmaceutical company focused on the development of innovative medicines that aim to address unmet medical needs in rare and specialty disease areas and improve patient quality of life. The Company seeks to selectively acquire development-stage product candidates with demonstrated clinically meaningful data from large pharmaceutical companies and to rapidly progress these product candidates to subsequent value inflection points.

Mereo combines the operational discipline and efficiency of a small company with the financial resources to conduct comprehensive clinical studies. The Company has the option to directly commercialise products, for example in orphan diseases, in addition to partnering or divesting its products.

Mereo's initial portfolio consists of three mid-late stage clinical assets that were acquired from Novartis in July 2015. BPS-804 is being developed for the prevention of fractures resulting from osteogenesis imperfecta (brittle bone disease); acumapimod (BCT-197), is being developed to treat inflammation in patients with an acute exacerbation of chronic obstructive pulmonary disease; and BGS-649 is a once-weekly pill to restore normal testosterone levels in men with hypogonadal hypogonadism.

In H1 2016 the Company initiated a Phase 2 study with acumapimod and a Phase 2b study with BGS-649. Mereo submitted its proposed Phase 2b/3 pivotal study design package for BPS-804 to the regulator in H1 2016 and expects to commence the first pivotal trial for BPS-804 during H1 2017. Additional product opportunities, from a range of large pharmaceutical and biotechnology companies, are under active evaluation.