Mereo BioPharma will cut 40% of its headcount and significantly reduce expenses to support the advancement of its lead programs through the clinic.
Mereo BioPharma will cut 40% of its headcount and significantly reduce expenses to support the advancement of its lead programs through the clinic, the company announced Tuesday.
The new strategy will enable the London-based company to drive its programs through near-term development milestones, Mereo stated in a press release.
The cuts are expected to extend the company’s cash runway through 2026. As of June 30, Mereo had approximately £76 million (about $86 million) in cash.
A company spokesperson told BioSpace the job cuts are being conducted over a short period of time. No single company division was singled out in the cuts. They were largely across the board and were done so as not to impact the company’s primary program setrusumab.
Mereo declined to provide a name for the spokesperson.
Following the cuts, Mereo noted it would retain key personnel needed to advance its two core rare disease programs. With the announced cuts, the company will continue to operate with the minimum level of resources required to execute its strategy while remaining publicly listed.
Shares of Mereo were up slightly in premarket trading to $1.05 at press time. The stock closed at $1 per share on Monday.
Denise Scots-Knight, chief executive officer of Mereo, said the company’s plan aims to retain key personnel and, at the same time, conserve shareholder capital.
Mereo announced the new strategy the day after the FDA awarded Fast Track designation to its investigational oral neutrophil elastase inhibitor, alvelestat (MPH-966). The company intends to hold an end-of-phase meeting with the regulatory agency to discuss the design of a registrational study for alvelestat as a treatment for alpha-1-anti-trypsin deficiency (AATD)-associated lung disease.
Alvelestat previously received Orphan Drug Designation for the treatment of AATD from the FDA.
The designation was awarded after the company posted positive top-line safety and efficacy data from the Phase II ASTRAEUS trial assessing alvelestat in severe AATD-associated emphysema.
At the high dose, alvelestat demonstrated statistically significant changes versus placebo in three primary biomarker endpoints associated with AATD-related lung disease (AATD-LD), blood neutrophil elastase activity, Aα-val360 and the elastin breakdown product, desmosine. Mereo intends to provide additional information about the alvelestat program on Oct. 31
Beyond alvelestat, Mereo’s other lead programs include setrusumab, an investigational treatment for osteogenesis imperfecta (OI) and etigilimab, which has been evaluated in combination with Bristol Myers Squibb’s checkpoint inhibitor Opdivo (nivolumab).
Mereo is advancing setrusumab, which inhibits sclerostin proteins, in an ongoing Phase II/III registrational trial in patients between the ages of 5 and 25 diagnosed with OI. The study is being conducted in partnership with Ultragenyx.
The partners dosed the first patient in this study earlier this year. A study in pediatric patients under five is expected to begin in early 2023.
Etigilimab, an anti-TIGIT, is being evaluated in an ongoing Phase Ib/II study. Currently, 16 patients remain in the program and are responding to therapy, Mereo reported.
Mereo is winding down this study due to disease progression. It will end once all patients have disease progression or have left the study.
