Mereo BioPharma Group plc (NASDAQ: MREO) (“Mereo” or the
“Company”), a clinical-stage biopharmaceutical company focused on
oncology and rare diseases, today announced financial results and
for the year ended December 31, 2020 and provided an update on
recent corporate highlights.
“Despite the challenging landscape presented by
the ongoing pandemic, this past year has been one of continued
execution for Mereo, and I believe that 2020 was a highly
successful and exciting year for the Company,” said Dr. Denise
Scots-Knight, Chief Executive Officer of Mereo. “We were able to
further strengthen our partnering portfolio with licensing
agreements for setrusumab and navicixizumab, with significant
milestone payments tied to each deal. Our internal pipeline has
continued to progress with etigilimab currently in a Phase 1b/2
basket study and alvelestat in a Phase 2 POC study for patients
with AATD as well as a Phase 1 study in patients with COVID-19.
Since the beginning of 2020, we successfully raised a total of $183
million (£138 million) through a combination of private placements,
convertible loan notes and most recently a public offering in
February 2021. The proceeds from these financing events, coupled
with the upfront payments under the setrusumab and navicixizumab
licensing agreements, will fund the continued advancement of our
clinical programs and allow us to continue focusing on execution of
our clinical and operational development strategies. As we look
toward 2021, I believe that the Company is well positioned to
deliver on multiple milestones and build upon the momentum we
generated in 2020 as we continue to advance to our goal of becoming
a leading biopharmaceutical company developing innovative
therapeutics to improve outcomes for patients with rare diseases
and select oncology indications.”
Recent Product Highlights and
Developments
Etigilimab (OMP-313M32)
- Initiated Phase 1b/2 basket study
in combination with an anti-PD-1 in a range of tumor types
- Initial data expected second half
2021
Alvelestat (MPH-966)
- Ongoing Phase 2 trial in 165
patients with AATD
- Data expected in late 2021
- Initiated Phase 1 study for the
treatment of COVID-19 – data expected second half 2021
Setrusumab (BPS-804)
- Rare pediatric disease designation
in September 2020
- Announced partnership with
Ultragenyx for the development of setrusumab for the treatment of
patients with OI in December 2020
Navicixizumab (OMP-305B83)
- In January 2020 completed a global
license agreement with OncXerna Therapeutics (formerly Oncologie,
Inc.) for the further development and commercialization of
navicixizumab.
Corporate Updates
Strengthened Management
team
- John Lewicki, PhD appointed Chief
Scientific Officer, and Ann Kapoun, PhD appointed SVP Translational
R&D, June 2020
- Christine Fox appointed Chief
Financial Officer, and Heidi Petersen appointed SVP Regulatory
Affairs, October 2020
- Suba Krishnan, M.D. appointed Senior
Vice President of Clinical Development, November 2020
Delisted From AIM
- Officially delisted from the AIM
market of the London Stock Exchange on December 18, 2020
- The Company’s American Depositary
Shares (“ADSs”) remain listed, and are only tradeable on
Nasdaq
Upcoming Events
- Needham Healthcare Conference, April 12-15, 2021
- Jefferies
Healthcare Conference, June 1-4, 2021
Full Year 2020 Financial
Results
Full year 2020 research and development expenses
were £16.3 million, compared to £23.6 million in
2019. R&D expenses relating to setrusumab decreased by £6.0
million, or 44%. The decrease was driven primarily by the
completion of the adult Phase 2b study which reported top-line data
in November 2019, with a further update in January 2020. Following
the licensing and collaboration agreement with Ultragenyx, future
ongoing development costs for setrusumab are expected to decrease
significantly. R&D expenses relating to alvelestat remained
consistent, reflecting the ongoing Phase 2 proof-of-concept study.
R&D expenses relating to leflutrozole decreased by £1.0
million, or 88%, due to the completion of the Phase 2b study in
2019 and limited activity in 2020 following the completion of the
study. Similarly, there were no ongoing studies for acumapimod in
2020 and this resulted in a decrease in R&D expenses for
acumapimod of £0.3 million, or 72%. Partially offsetting the
decrease, R&D expenses relating to etigilimab increased by £0.3
million, or 34%. The increase was driven primarily by the costs
associated with preparing for the open label Phase 1b/2 basket
study in combination with an anti-PD-1 in a range of tumor types.
We expect the costs related to the etigilimab program to increase
significantly in 2021.
Administrative expenses increased by £5.3
million, or 33%, from £15.9 million in 2019 to £21.2 million in
2020. The increase was primarily due to incremental legal and
professional fees associated with various transactions during the
year. Professional and legal fees increased from £1.7 million to
£6.9 million in 2019 and 2020, respectively. The increase reflects
transaction costs associated with the June 2020 Private Placement
and the cancellation of admission of our ordinary shares to trading
on the AIM market of London Stock Exchange in December 2020, along
with higher costs associated with the Nasdaq listing and managing a
larger business in two jurisdictions following the acquisition of
Mereo BioPharma 5, partially offset by intellectual property
related costs as a result of lower activity associated with
setrusumab. Employee-related costs increased by £1.5 million to
£7.3 million in 2020 primarily due to the expansion of our
management team in 2020 compared to 2019. Premises-related costs
increased by £1.7 million in 2020 primarily due to transaction
costs associated with renegotiation of our office lease in Redwood
City. This was partially offset by a gain on lease modification of
£0.9 million. Offsetting these increases were lower travel-related
costs, which decreased by £0.5 million from 2019 due to COVID-19
travel restrictions.
Net loss attributable to equity holders for the
year 2020 was £163.6 million, compared to a net loss
of £34.8 million in 2019, reflecting an operating loss of
£37.6 million, a loss of £109.8 million due to changes in the fair
value of financial instruments and a £10.9 million loss on disposal
of intangible assets.
Total ordinary shares outstanding
at December 31, 2020 were approximately 339 million
shares. Total ADSs outstanding at December 31, 2020 were
approximately 67.7 million, with each ADS representing five
ordinary shares of the Company.
Cash and short-term deposits totaled £23.5
million as of December 31, 2020. Mereo anticipates that its
current cash and short-term deposits, which includes the upfront
payment received under the collaboration and license agreement with
Ultragenyx and our recently completed public offering in February
2021, will extend the Company’s runway into 2024.
About Mereo BioPharmaMereo
BioPharma is a biopharmaceutical company focused on the development
and commercialization of innovative therapeutics that aim to
improve outcomes for oncology and rare diseases. The Company has
developed a portfolio of six clinical stage product candidates.
Mereo’s lead oncology product candidate, etigilimab (Anti-TIGIT),
has recently advanced into an open label Phase 1b/2 basket study
evaluating Anti-TIGIT in combination with an anti-PD-1 in a range
of tumor types including three rare tumors and a number of
gynecological carcinomas including cervical, ovarian and
endometrial carcinomas. The Company’s second oncology product,
navicixizumab, for the treatment of late line ovarian cancer, has
completed a Phase 1 study and has been partnered with OncXerna
Therapeutics, Inc., formerly Oncologie, Inc. The Company has two
rare disease product candidates: alvelestat for the treatment of
severe Alpha-1 antitrypsin deficiency (AATD), which is being
investigated in an ongoing Phase 2 proof-of-concept study in the
U.S. and Europe, for which the Company expects to report top line
data in late 2021, and setrusumab for the treatment of osteogenesis
imperfecta (OI). Following the completion of the Company’s Phase 2b
ASTEROID study, the Company met with both the FDA and the European
Medicines Agency (EMA) to discuss the principles of a design of a
single Phase 2/3 registrational pediatric study in OI. In September
2020, the FDA granted Rare Pediatric Disease designation to
setrusumab for the treatment of OI. In December 2020, the Company
signed a license and collaboration agreement for setrusumab in OI
with Ultragenyx Pharmaceutical Inc.
Forward-Looking StatementsThis
press release contains “forward-looking statements.” All statements
other than statements of historical fact contained in this press
release are forward-looking statements within the meaning of
Section 27A of the United States Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the United States
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Forward-looking statements usually relate to future events and
anticipated revenues, earnings, cash flows or other aspects of our
operations or operating results. Forward-looking statements are
often identified by the words “believe,” “expect,” “anticipate,”
“plan,” “intend,” “foresee,” “should,” “would,” “could,” “may,”
“estimate,” “outlook” and similar expressions, including the
negative thereof. The absence of these words, however, does not
mean that the statements are not forward-looking. These
forward-looking statements are based on the Company’s current
expectations, beliefs and assumptions concerning future
developments and business conditions and their potential effect on
the Company. While management believes that these forward-looking
statements are reasonable as and when made, there can be no
assurance that future developments affecting the Company will be
those that it anticipates.
All of the Company’s forward-looking statements
involve known and unknown risks and uncertainties some of which are
significant or beyond its control and involve assumptions that
could cause actual results to differ materially from the Company’s
historical experience and its present expectations or projections.
You should carefully consider the foregoing factors and the other
risks and uncertainties that affect the Company’s business,
including those described in the “Risk Factors” section of its
latest Annual Report on Form 20-F, reports on Form 6-K and other
documents furnished or filed from time to time by the Company with
the SEC. The Company wishes to caution you not to place undue
reliance on any forward-looking statements, which speak only as of
the date hereof. The Company undertakes no obligation to publicly
update or revise any forward-looking statements after the date they
are made, whether as a result of new information, future events or
otherwise, except to the extent required by law.
Mereo BioPharma Contacts: |
|
Mereo |
+44 (0)333 023 7300 |
Denise Scots-Knight, Chief Executive Officer |
|
Christine Fox, Chief Financial Officer |
|
|
|
Burns McClellan (Investor Relations Adviser to
Mereo) |
+01 212 213 0006 |
Lee Roth |
|
Investors |
investors@mereobiopharma.com |
|
|
Consolidated Statement of Comprehensive
Loss
|
Year endedDecember 31, |
|
2020 |
2019 |
2018 |
|
£’000s |
£’000s |
£’000s |
Research and development
expenses |
(16,347) |
(23,608) |
(22,703) |
Administrative expenses |
(21,222) |
(15,909) |
(11,775) |
Operating
loss |
(37,569) |
(39,517) |
(34,478) |
Net income recognized on
acquisition of subsidiary |
– |
1,035 |
– |
Finance income |
44 |
377 |
307 |
Finance costs |
(6,383) |
(4,371) |
(3,807) |
Changes in the fair value of
financial instruments |
(109,849) |
875 |
716 |
Loss on disposal of intangible
assets |
(10,872) |
– |
– |
Net foreign exchange
(loss)/gain |
(1,821) |
483 |
(44) |
Loss before
tax |
(166,450) |
(41,118) |
(37,306) |
Taxation |
2,822 |
6,274 |
5,277 |
Loss attributable to
equity holders of the parent |
(163,628) |
(34,844) |
(32,029) |
Other comprehensive loss –
items that may be reclassified to profit or loss |
|
|
|
Exchange differences on
translation of foreign operations |
349 |
(499) |
– |
Other comprehensive
loss, net of tax |
349 |
(499) |
– |
Total comprehensive
loss attributable to equity holders of the parent |
(163,279) |
(35,343) |
(32,029) |
Basic and diluted loss
per share |
(0.48) |
(0.39) |
(0.45) |
|
|
|
|
Consolidated Balance Sheet
|
Year EndedDecember 31, |
|
2020 |
2019 |
Assets |
£’000s |
£’000s |
Non-current assets |
|
|
Property, plant and equipment |
1,573 |
11,558 |
Intangible assets |
31,648 |
44,456 |
|
33,221 |
56,014 |
Current assets |
|
|
Prepayments |
1,619 |
2,111 |
R&D tax credits |
2,818 |
10,426 |
Other taxes recoverable |
804 |
979 |
Other receivables |
1,016 |
572 |
Cash and short-term deposits |
23,469 |
16,347 |
|
29,726 |
30,435 |
Total assets |
62,947 |
86,449 |
Equity and liabilities |
|
|
Non-current liabilities |
|
|
Provisions |
1,216 |
1,449 |
Interest-bearing loans and borrowings |
16,142 |
5,373 |
Warrant liability |
50,775 |
131 |
Other liabilities |
62 |
44 |
Lease liability |
1,158 |
9,318 |
|
69,353 |
16,315 |
Current liabilities |
|
|
Trade and other payables |
3,333 |
6,352 |
Accruals |
4,178 |
5,138 |
Provisions |
418 |
309 |
Interest-bearing loans and borrowings |
- |
15,139 |
Contingent consideration liability |
- |
354 |
Lease liability |
636 |
2,586 |
|
8,565 |
29,878 |
Total liabilities |
77,918 |
46,193 |
Net (liabilities)/assets |
(14,971) |
40,256 |
|
|
|
Equity |
|
|
Issued capital |
1,017 |
294 |
Share premium |
161,785 |
121,684 |
Other capital reserves |
128,374 |
59,147 |
Employee Benefit Trust shares |
(1,305) |
(1,305) |
Other reserves |
5,001 |
7,000 |
Accumulated loss |
(309,693) |
(146,065) |
Translation reserve |
(150) |
(499) |
Total equity |
(14,971) |
40,256 |
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