MPH.L Regulatory News (MPH)

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Mereo BioPharma Group plc

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

Mereo announces positive top-line results from Phase 2 trial with BCT-197 (acumapimod)

Primary endpoint met

Statistically significant reduction in number of COPD exacerbations that required rehospitalisation

Reported to be safe and well tolerated

London, 11 December 2017 - Mereo BioPharma Group plc (AIM: MPH), a multi-asset biopharmaceutical company focused on the acquisition, development and commercialisation of innovative therapeutics that aim to improve outcomes for patients with rare and specialty diseases, today announces positive top-line data from a Phase 2 clinical trial with BCT-197 (acumapimod), a novel, orally active p38 MAP kinase inhibitor in development as a first-line therapy for acute exacerbations of chronic obstructive pulmonary disease (AECOPD). The Company is not aware of any approved therapies for the treatment of AECOPD in the United States or the EU.

The Phase 2 trial was a double-blind, randomised, placebo-controlled clinical study investigating the use of BCT-197, on top of Standard of Care, for the treatment of patients with AECOPD. Standard of Care included the addition of steroids and/or antibiotics to a patient's chronic COPD medication and symptomatic bronchodilators. Following baseline assessment, 282 eligible patients were randomised to receive either two different dose regimens of BCT-197 or placebo (three doses over five days). The primary endpoint was a comparison of change in forced expiratory volume in 1 second (FEV1) from baseline to day 7 within each arm of the study. A number of secondary and exploratory outcomes were also measured and patients were followed for a total of 26 weeks.

Trial Results Highlights

· Primary endpoint (change in FEV1 from baseline to day 7 within the treatment group) and study objectives

o Primary endpoint met on an ITT basis for both BCT-197 high and low dose regimens (p= 0.012, p ≤ 0.001); no significant change from baseline (p=0.102) shown for Standard of Care plus placebo.

o One of the study objectives was the comparison between all three groups. This was not statistically significant however the treatment arms were numerically superior to the Standard of Care plus placebo arm.

· Secondary and exploratory endpoints

o Positive clinical and health economic outcomes supported by other secondary measures.

§ Statistically significant reduction of more than 50% (p ≤ 0.027 to 0.05) in the number of clinical treatment failures, in the high dose group compared to Standard of Care plus placebo, as measured by the number of rehospitalisations for the treatment of COPD at days 90 through 150 and there was a trend seen as early as day 30.

§ Trend demonstrating a 56% to 28% reduction from day 30 through day 150 in the broader composite clinical treatment failure scale (defined as requirement for additional antibiotics or corticosteroids during either the initial or subsequent reexacerbation, COPD rehospitalisation or death). This reduction was also observed in the high dose group (versus Standard of Care and low dose), consistent with the rehospitalisation data.

o Approximately 50% of the general COPD patient population have low blood eosinophils (less than 2%) and are considered steroid resistant.  This group of patients (68% of patients in this study), when treated with BCT-197, demonstrated a trend in improvement in FEV1 from baseline at day 7. Standard of Care plus placebo showed almost no improvement in a prespecified subgroup analysis in this low blood eosinophil group.

· Safety

o BCT-197 was reported to be safe and well tolerated with the incidence and nature of adverse events in line with expectations for this patient population.

§ In particular, there were no BCT-197 induced liver injuries and only two cases of acneiform rash, both of which resolved.

Professor Wisia Wedzicha, Professor of Respiratory Medicine at the National Heart and Lung Institute, Imperial College, UK and principal investigator in the trial commented: "These are exciting results. In particular the potential of short term BCT-197 treatment to impact beyond the acute exacerbation and benefit the clinically meaningful outcomes of treatment failure and recurrent exacerbations, brings the possibility of a step change in management for patients with COPD"

Dr Denise Scots-Knight, Chief Executive Officer of Mereo BioPharma Group plc commented: "We believe this Phase 2 clinical study clearly highlights BCT-197's potential to treat acute exacerbations of COPD. We are pleased that the trial met its primary endpoint and the drug was well tolerated with a relatively benign safety profile reported. However, more pertinent to the unmet clinical need we are seeking to address with this drug, the study demonstrated an over 50% reduction of rehospitalisations for COPD - a result that was statistically significant and we believe will support the next step of partnering this programme. We believe this important effect for both patients and payers is consistent with the drug's postulated broader mechanism of action in controlling inflammation by targeting pathways that drive the pathological mechanism behind such exacerbations of COPD rather than resulting from any impact on shorter term bronchodilation."

About the Phase 2 Study

The Phase 2 dose-ranging clinical trial, which commenced in 2016, was a randomised double blind, placebo-controlled parallel-group study assessing two dosing regimens of BCT-197 and placebo, in combination with Standard of Care, in 282 patients presenting with an acute exacerbation of COPD. Following baseline assessment, patients were randomised to receive a high dose or low dose regimen of BCT-197 or placebo on days 1, 3 and 5 of the study. The primary endpoint was a comparison of change in FEV1 from baseline to day seven within the treatment group. Patients were followed for 26 weeks in total. The secondary endpoints measured the area under the curve of FEV1 over time, time to normalization of FEV1, change from baseline over time in the EXACT-PRO score, time to and number of moderate/severe AECOPDs during the trial and the time a patient was in the hospital, measured from admission until the patient was medically fit for discharge.

Prior to Mereo's acquisition of BCT-197, Novartis conducted five clinical trials in 459 patients and volunteers, including a Phase 2a trial in AECOPD patients that showed a clinically meaningful improvement in lung function and a statistically significant improvement in lung function at the highest doses.

About AECOPD

Chronic obstructive pulmonary disease (COPD) includes chronic bronchitis, emphysema, refractory (non-reversible) asthma, and some forms of bronchiectasis. COPD is a non-fully-reversible, progressive lung disease that was the third largest cause of death in the world in 2010 according to the Global Burden of Disease Study, and the WHO forecasts that it will remain the third largest cause of death in the world in 2030. AECOPD is defined as an acute event characterized by a worsening of the patient's symptoms beyond normal day-to-day variations that requires a change in medication.

The National Heart Lung Blood Institute estimates that 16 million people in the United States have been diagnosed with COPD and the same number likely suffer from the disease without being aware of it. The European COPD Coalition estimates that 13 million people in Europe have been diagnosed with COPD. In 2015, according to the WHO, there were over three million deaths from the disease worldwide.

On average, COPD patients suffer one to three AECOPDs per year with an average hospital stay, if admitted, of three to 10 days. Approximately 8% of patients admitted to the hospital for COPD die while in the hospital. The frequency and severity of exacerbations increase with age, disease severity and history of prior AECOPD.

AECOPDs account for the greatest proportion of COPD costs at approximately 63% of all COPD-related hospital admissions, representing more than 1.5 million emergency room visits in the United States alone. Based on current estimates of U.S. COPD rates, the direct costs of COPD are estimated at $4,000 per patient per year. Costs increase in correlation with each progressive stage of the disease. Hospital stays make up the greatest proportion of the total COPD burden on the healthcare system, accounting for approximately 45% to 50% of the total direct cost generated by COPD patients.

The Company is not aware of any approved therapies for the treatment of AECOPD in the United States or the EU. The management of AECOPD is directed at relieving symptoms and restoring functional capacity of the airways.

About BCT-197 (acumapimod)

BCT-197, or acumapimod is a p38 MAP kinase inhibitor in development as an oral first-line therapy for patients with AECOPD. It is designed to inhibit the pathological mechanism behind inflammation, which is a key feature of AECOPD. The Company believes acumapimod, if approved, offers a potential new treatment by targeting the underlying disease and delivering tangible benefits for patients and payers by potentially preventing AECOPD, shortening hospital stays, and reducing readmissions.

The Company believes acumapimod has the following key advantages over current therapies:

· Potential to be a rapid-onset treatment targeting inflammatory drivers of AECOPD.

· Designed to target anti-inflammatory response systemically and locally with easier and more flexible oral administration than inhaled treatments.

· Simple oral regimen of three doses over five days that can be conveniently administered in an outpatient setting.

· Designed to target pathophysiology of acute exacerbations without generalized immune suppression.

· Potential for efficacy in steroid-resistant population.

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About Mereo

Mereo is a multi-asset biopharmaceutical company focused on the acquisition, development and commercialization of innovative therapeutics that aim to improve outcomes for patients with rare and specialty diseases. The portfolio consists of four clinical-stage product candidates, each of which were acquired from large pharmaceutical companies: BPS-804 for the treatment of osteogenesis imperfecta, or OI; AZD-9668 for the treatment of severe alpha-1 antitrypsin deficiency, or AATD; BGS-649 for the treatment of hypogonadotropic hypogonadism, or HH, in obese men; and BCT-197 for the treatment of acute exacerbations of chronic obstructive pulmonary disease, or AECOPD. Each of the product candidates has demonstrated 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 pre-clinical, clinical and manufacturing data packages. Since inception the Company has commenced large, randomized, placebo-controlled Phase 2 clinical trials for three of our product candidates (BCT-197, BGS-649 and BPS-804). The Company intends to commence additional late-stage clinical trials in 2018.