Mereo Biopharma Group PLC (NASDAQ: MREO) has announced the pricing of an underwritten offering of 12,531,300 of its American Depositary Shares (ADSs), with each ADS being sold at a price of $3.99. The gross proceeds from the offering are expected to be approximately $50.0 million.
The net proceeds from the offering are intended to be used to fund the Setrusumab program, including supply and pre-launch activities in Europe, as well as for working capital and other general corporate purposes.
The offering is expected to close on or about June 17, 2024, subject to the satisfaction of customary closing conditions. The participants in the offering include new investors Frazier Life Sciences, Deerfield Management, and Perceptive Advisors, as well as existing Mereo shareholders such as Rubric Capital Management, Rock Springs Capital, and Janus Henderson Investors, along with other leading healthcare-focused institutional investors.
The company's partner, Ultragenyx Pharmaceutical, Inc., has completed enrollment in the phase 3 portion of a pivotal phase 2/3 pediatric study in young adults for Setrusumab in Osteogenesis Imperfecta (OI) and in the phase 3 study in pediatric patients in the first half of 2024.
Mereo Biopharma is focused on the development of innovative therapeutics for rare diseases, with two rare disease product candidates – Setrusumab for the treatment of OI and Alvelestat primarily for the treatment of severe Alpha-1 Antitrypsin Deficiency-Associated Lung Disease (AATD-LD).
Setrusumab has received orphan designation for OI from the EMA and FDA, Prime designation from the EMA, and pediatric disease designation from the FDA. Alvelestat has received U.S. orphan drug designation for the treatment of AATD and fast track designation from the FDA.
The company has aligned with the FDA and the EMA on the primary endpoints for a phase 3 pivotal study, which, if successful, could enable full approval in both the U.S. and Europe.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of these securities, nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation, or sale is not permitted.
Participants in the offering include new investors Frazier Life Sciences, Deerfield Management, and Perceptive Advisors, and existing Mereo shareholders, including Rubric Capital Management, Rock Springs Capital, and Janus Henderson Investors, along with other leading healthcare-focused institutional investors. Jefferies, Leerink Partners, and Cantor are acting as joint book-running managers for the offering.
The shelf registration statement relating to the offering of the ADSs was declared effective by the SEC on May 22, 2024, and the offering is being made only by means of a prospectus supplement and the accompanying prospectus that form a part of the registration statement. The market has reacted to these announcements by moving the company's shares 6.5% to a price of $4.25. For more information, read the company's full 8-K submission here.
