In the ongoing proxy battle between London-based Mereo BioPharma Group and Rubric Capital Management, Mereo outlined the outcome of the most recent negotiations, which Rubric rejected.
In the ongoing proxy battle between London-based Mereo BioPharma Group and Rubric Capital Management, Mereo outlined the outcome of the most recent negotiations, which Rubric rejected.
Mereo offered to have two of its directors retire and replace them with an employee from Rubric and another director. It also outlined its strategy moving forward.
Referring BioSpace to its published press release, Mereo’s board indicated the company “would prefer to avoid the distraction and expense of a proxy contest and is surprised that Rubric is refusing to discuss any resolution other than one that involves Mereo acceding to Rubric’s full demand.”
Rubric’s Requests
Rubric, which has a 14% ownership stake in Mereo, called for a general shareholder meeting in September to vote on its proposals for improving the company.
Rubric wants shareholders to vote on its proposal, including its nomination of four candidates to Mereo’s board: Analisa Jenkins, Daniel Shames, M.D., Marc Yoskowitz and Justin Roberts.
Rubric issued a public letter to Mereo shareholders describing Mereo’s responses as “callous disregard for the rights and interests of all of Mereo’s shareholders.”
It went on to allege issues including obstructing the exercise of shareholder rights, the number of members who have called for the general meeting and disagreements over technical issues in the format of the requisition request.
Moreover, Rubric stated Mereo’s board “has no credible plan to create value.” It argued the company’s “plan can be distilled into the following: do nothing; wait and hope for the best.”
Mereo’s Perspective
Mereo issued a letter to Rubric Monday noting that while the company takes comments on its strategy and the perspectives Rubric has shared seriously, it is “disappointed by the continued public escalation of [Rubric’s] position, especially with [its] most recent proposal to remove four members of Mereo’s Board, including the Chairman.”
Mereo said the board and management has run a comprehensive strategic review of its portfolio and spending strategy with independent financial and legal advisors.
“Mereo’s clearest path to delivering value is to focus our resources on setrusumab and on taking alvelestat through the next stage of the regulatory process,” the company stated.
Mereo noted that setrusumab has demonstrated encouraging initial Phase II results in two late-stage rare disease programs and is expected to deliver on “multiple value-driving milestones over the next two years.”
These include dose selection from the Phase II portion of an ongoing Phase II/III trial in 5-25-year-olds with Osteogenesis Imperfecta by Ultragenyx, its collaboration partner, with expected advancement into Phase III around the end of the year. Around the same time, Mereo expects to launch a trial of the drug in 2-4-year-olds with OI.
