Mereo's Net Loss Narrows as Trial Spend Falls

The Tip Desk · November 12, 2026 · 3 min read

Cash of $26.1 million at September 30 is still expected to fund operations into late-2027.

Mereo BioPharma Group plc (MREO), a clinical-stage biopharmaceutical company focused on rare diseases, reported a narrower net loss for the third quarter of 2026 as research and development and general and administrative spending declined, while it continued regulatory work on setrusumab and alvelestat.

Net loss was $5.9 million, compared with $7.0 million a year earlier. The company said the improvement primarily reflected reductions in R&D and G&A expenses, partially offset by a lower net foreign currency translation gain. Loss per share was $0.01, unchanged from the year-ago quarter.

Revenue was $800 thousand in the three months ended September 30, 2026, versus zero in the year-ago quarter.

Research and development expenses fell to $2.1 million from $4.3 million. The company attributed the $2.2 million decrease primarily to $1.6 million lower setrusumab spend and $0.4 million lower alvelestat spend. Setrusumab costs declined mainly because of reductions and delays in manufacturing investment and ongoing activities, including medical affairs in Europe. Alvelestat costs fell after the completion of 2025 activities in preparation for a potential Phase 3 study.

General and administrative expenses decreased $1.1 million, from $6.0 million to $4.9 million, primarily due to lower investment in pre-commercial activities for a potential European launch of setrusumab and other realized net cost savings.

Cash and cash equivalents were $26.1 million at September 30, 2026, down from $30.1 million at June 30. The company said it expects that balance to fund currently committed clinical trials, operating expenses and capital expenditure into late 2027, excluding potential $40 million in upfront and R&D payments if Sentynl Therapeutics exercises its alvelestat option.

Chief Executive Officer Denise Scots-Knight said the company had made progress on setrusumab and alvelestat and that those developments have the potential to set the stage for a transformational 2027. With Ultragenyx, Mereo is continuing to work with regulators on the data needed for a regulatory submission for setrusumab in osteogenesis imperfecta and whether there is a path forward. Pre- and post-hoc fracture analyses from the Orbit and Cosmic Phase 3 studies were presented at the October ASBMR meeting; the company said those analyses in patients with at least three fractures in the prior two years showed a meaningful benefit on fractures, bone mineral density and other endpoints.

On alvelestat for alpha-1 antitrypsin deficiency-associated lung disease, Mereo said it is collaborating with Sentynl to streamline the Phase 3 design and is working to initiate the study in early 2027. Based on ongoing FDA interactions, the company expects to provide an update before the end of the year. If Sentynl exercises the option, Mereo would receive $40 million in upfront and R&D payments, and would also be eligible for up to $435 million in regulatory and commercial milestones plus double-digit tiered royalties on U.S. net sales. Mereo will lead the global Phase 3 study and regulatory interactions until completion.

Partner āshibio reported biomarker data from a legacy vantictumab study in cancer patients at the same ASBMR meeting and is continuing to advance the antibody toward clinical trials in autosomal dominant osteopetrosis type 2, with an intention to initiate trials in the first half of 2028.

Total ordinary shares issued were 798,454,864 as of September 30, 2026.