The proxy battle between Mereo BioPharma and Rubric Capital Management will come to a head on Nov. 18. Mereo issued a shareholder circular on Friday.
The proxy battle between Mereo BioPharma and Rubric Capital Management will come to a head Nov. 18, and on Friday the London-based company issued a shareholder circular and strongly worded notice to said shareholders.
Rubric, which has a 14% ownership stake in Mereo, is unhappy with the current management and direction of the company. Late last month, Mereo reported its attempts to resolve the issue had been rejected by Rubric. The company’s proposal included having two existing Mereo directors retire and adding a Rubric principal and another new director to its Board.
On Sept. 14, Rubric submitted a revised requisition for a general meeting of shareholders. It will get its wish late next month. The vote will be on the following two resolutions:
1. That five Mereo Board members, namely Dr. Peter Fellner, Dr. Anders Ekblom, Dr. Deepika Pakianathan, Dr. Brian Schwartz and Mr. Michael Wyzga – be immediately removed from the Board.
2. That five Rubric nominees – Dr. Annalisa Jenkins, Dr. Daniel Shames, Mr. Marc Yoskowitz, Mr. Justin Roberts and Mr. David Rosen replace them, again effective immediately.
In its notice issued Friday, Mereo’s language held no punches. The company advised shareholders to vote against these proposals on the basis that:
- Rubric’s “underqualified” nominees would threaten Mereo’s strategic plan and risk its ability to bring potentially life-changing therapies to patients.
- Rubric’s plan would appear to depend on the short-term licensing or selling of Mereo’s key assets which Mereo called “irresponsible and suboptimal”.
- Rubric’s nominees are “woefully underqualified” – two of which (Roberts and Rosen) it claims have no biotechnology company leadership or operating experience. Mereo also questioned the independent nature of these two nominees.
BioSpace has reached out to both Mereo and Rubric; no response was received as of press time.
Mereo adopts rare disease and tumor therapies that were not being progressed by other biopharma companies. Its lead asset, setrusumab, is in Phase II/III development for Osteogenesis Imperfecta, a devastating genetic bone condition. This program is partnered with Ultragenyx.
Coming up behind setrusumab is alvelestat, which is currently in Phase II for the treatment of severe Alpha-1 antitrypsin deficiency-related lung disease and bronchiolitis obliterans syndrome. Etigilimab, which has completed selected Phase Ib cohorts, is being developed to treat advanced or metastatic solid tumors.
On Tuesday, Mereo announced it would slash 40% of its headcount and significantly reduce expenses in order to drive these programs through near-term development milestones. The updated strategy will extend Mereo’s cash runway into 2026, the company stated.
