MPH.L Regulatory News (MPH)

Mereo BioPharma Group plc

 ("Mereo" or the "Company")

First patient dosed in Phase 2 Alpha-1 Antitrypsin Deficiency Study

Investment from The Alpha-1 Project

Top line data expected H2 2019

London, 5 November 2018 - Mereo BioPharma Group plc (AIM: MPH), a clinical stage UK based biopharmaceutical company focused on rare diseases, is pleased to announce that the first patient has been dosed in its Phase 2 clinical study of MPH-966 (alvelestat) for the treatment of alpha-1 antitrypsin deficiency (AATD). The study is being conducted in the United States and Europe with top line data expected in H2 2019.

The Company also announced today a collaboration with and investment from the venture philanthropy arm of the Alpha-1 Foundation, The Alpha-1 Project, Inc. (TAP). TAP is investing in Mereo's MPH-966 development programme subject to the Company meeting agreed development milestones. The Company has also agreed to issue warrants to TAP, on future dates, to subscribe for shares in the Company subject to TAP making the agreed investments in the programme with the first such investment milestone being the dosing of the first patient in the MPH-966 development programme.

AATD is a potentially life-threatening rare, genetic condition, with an estimated 50,000 patients in North America and 60,000 patients in Europe suffering from a severe form of the disease. It can cause severe debilitating conditions such as chronic liver disease but, most notably, pulmonary emphysema, which is a life-threatening disease. Current standard of care for AATD often involves protein replacement therapy, which requires weekly intravenous infusions of plasma-derived alpha 1 antitrypsin, however, fewer than 10,000 patients are currently treated with this therapy in the U.S. and it is not currently available in some European countries. MPH-966 is an oral neutrophil elastase inhibitor that specifically targets the neutrophil elastase which is primarily responsible for the lung degradation in AATD patients. Mereo therefore believes MPH-966 is highly differentiated from protein replacement therapy.

The Phase 2 study is a 12-week randomized, placebo controlled, clinical trial evaluating two doses of MPH-966 in approximately 165 patients with the PiZZ or NULL genetic mutations. These mutations are associated with the more severely affected patients who have very low (PiZZ) or zero (NULL) alpha-1 antitrypsin levels. The primary endpoint of the study is the change from baseline on biomarkers of neutrophil activity through the measurement of desmosine/isodesomine at 12 weeks compared to placebo. Desmosine has been shown to correlate with deterioration of lung tissue as determined by CT scans in previous studies in AATD patients. If the results of this trial are positive, Mereo intends to seek regulatory advice on the design of a pivotal trial.

Jean-Marc Quach, President and CEO of The Alpha-1 Project said:

"We are very pleased that the first patient has been successfully dosed in this phase 2 study in alpha-1 antitrypsin deficiency. We are excited by the potential for a new oral therapeutic to improve the lives of our patients with this debilitating disease and are pleased to be supporting Mereo with this phase 2 study."

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

"We are happy to announce today, both that the first patient has been dosed in this clinical study and that we have agreed an investment from the Alpha-1 Foundation through TAP. We strive to work closely with patient groups who support those with the orphan and rare diseases we are targeting and are delighted to be working with the Foundation on this study. We will continue to enrol patients over the coming months and look forward to reporting top line data in the second half of 2019."

For further information on patient recruitment of this trial, visit: https://clinicaltrials.gov/ NCT identifier: 03636347

About Mereo BioPharma

Mereo is a biopharmaceutical company focused on the development and commercialization of innovative therapeutics that aim to improve outcomes for patients with rare diseases. The portfolio currently consists of four clinical-stage product candidates, each of which were acquired from large pharmaceutical companies: BPS-804 (setrusumab) for the treatment of osteogenesis imperfecta ("OI"); MPH-966 (alvelestat) for the treatment of severe alpha-1 antitrypsin deficiency ("AATD"); BCT-197 for the treatment of acute exacerbations of chronic obstructive pulmonary disease, ("AECOPD"); and BGS-649 for the treatment of hypogonadotropic hypogonadism ("HH") in obese men. Each of the Company's product candidates has generated positive clinical data for Mereo's target indication or in a related indication. The Company's strategy is to selectively acquire product candidates that have already received significant investment from pharmaceutical companies and that have substantial preclinical, clinical and manufacturing data packages. Since inception the Company has commenced large, randomized, placebo-controlled Phase 2 clinical trials for all four of the product candidates and has previously announced positive top-line results from two of its clinical trials: a Phase 2 trial with BCT-197 in December 2017 and a Phase 2b dose-ranging study with BGS-649 in March 2018. The company also recently announced completion of enrolment with [112] patients in the Phase 2b dose ranging study of BPS-804 in osteogenesis imperfecta with [112] adult patients.

About The Alpha-1 Project

Mission statement: The Alpha-1 Project works with patients, academia, pharmaceutical and biotech companies, and public health organizations in the relentless pursuit of cures and therapies for COPD and liver disease caused by Alpha-1 Antitrypsin Deficiency. For more information, visit www.thealpha-1project.com. The Alpha-1 Project is a wholly-owned for-profit subsidiary of the Alpha-1 Foundation. For more information on the Foundation, visit www.alpha1.org.

About AATD

AATD is a genetic disorder that affects approximately 100,000 patients in the United States and 120,000 patients in Europe rarediseases.org/rare-diseases/alpha-1-antitrypsin-deficiency. The severe population represents approximately 50,000 patients in North America and 60,000 patients in Europe. It can cause severe debilitating conditions such as chronic liver disease but, most notably, pulmonary emphysema, which is a life-threatening disease. Pulmonary emphysema results in irreversible destruction of the tissues supporting the function of the lungs and causing severe shortness of breath and wheeze. Patients typically present between the ages of 20 and 50 and have both a significantly reduced quality of life and a reduced life expectancy.

The lung damage in AATD results from loss of the normal protective effect of alpha-1 antitrypsin against the damaging enzymes released during inflammation, specifically neutrophil elastase.

Current standard of care for AATD varies from country to country. Protein replacement therapy, involving weekly infusions of plasma-derived alpha 1 antitrypsin is approved but only approx. 9,000 patients are treated in the US. By suppressing neutrophil elastase through a more easily administered oral treatment, Mereo believes MPH966 has significant differentiation from the current protein replacement therapy.

AstraZeneca has conducted a number of Phase I and Phase II clinical studies with MPH966 in respiratory conditions that share some common pathology with AATD, specifically chronic obstructive pulmonary disease ("COPD"), cystic fibrosis and bronchiectasis. Approximately 1,000 patients have been treated with the drug in clinical studies to date. These studies have shown MPH966 to be safe and well-tolerated. They have also generated signals of efficacy in lung function and biomarker data that are consistent with an elastase-mediated mechanism of action.

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