Mereo BioPharma kick starts accounts with a first half loss

Clinical stage, UK-based, biopharmaceutical company focused on rare and specialty diseases, Mereo BioPharma Group, announced its interim results for the six months to 30 June on Friday, a period in which it raised a further £14.8m of capital.

The AIM-traded firm raised the capital through a private placement of new ordinary shares raising gross proceeds of £11.3m and a cash investment by existing shareholder Novartis by way of a convertible loan in the amount of £3.5m, and it supplemented the £76.5m private placement completed in July 2015

Its loss after tax for the period was £14.7m, or 59 pence per ordinary share, compared to nil in 2015.

The company’s net cash inflow from financing activities during the period was £68.5m, and net cash outflow from operating activities was £10.5m, with cash and cash equivalents at period end of £70.2m, compared to nil for all three figures.

“We have made significant progress during the first half of 2016, delivering against all our key strategic priorities set in July 2015 at the time of the £76.5 million private financing when we acquired the initial product portfolio from Novartis,” said CEO Denise Scots-Knight.

“The successful admission of Mereo shares to the AIM market of the London Stock Exchange in June 2016 allowed us to raise a further £14.8 million bringing the total capital raised in just under 12 months to over £90 million.

“Operationally, these funds have allowed us, during the period, to quickly progress two of our innovative products into dose optimisation Phase 2 clinical trials,” she explained.

Scots-Knight said the company has also received Orphan Drug Designation in the US and EU for its “most advanced” product, BPS-804, and submitted its Phase 2b/3 pivotal clinical trial package design to the regulator, which the board anticipates will allow the commencement of patient recruitment in H1 2017.

“Additionally, we continue to search for additional innovative clinical stage products for rare and speciality diseases to expand our pipeline.”