Mereo BioPharma's Clinical Pipeline at Crossroads: What's Next After Phase 3 Setback In Brittle Bone Therapy?

Mereo BioPharma Group plc (MREO), a rare-disease focused biopharmaceutical developer, rolled out a comprehensive progress report covering its investigational therapeutics, including updates on setrusumab and alvelestat, alongside revised cash-runway projections. The market responded positively, with MREO shares climbing 7% during premarket trading to $0.70, following Tuesday’s close at $0.66, up 16.34%.

Setrusumab: Reassessing Clinical Path For Osteogenesis Imperfecta

At the center of Mereo’s portfolio sits setrusumab (UX-143), a fully humanized monoclonal antibody in development for osteogenesis imperfecta—commonly referred to as brittle bone disease—under a collaborative arrangement with Ultragenyx established through a licensing deal inked in December 2020.

Osteogenesis imperfecta represents a collection of inherited rare systemic connective tissue conditions, typically stemming from pathogenic variants in genes responsible for type I collagen synthesis. Currently, no FDA or EMA-approved therapeutics address this indication directly, with standard management relying on supportive interventions such as orthotic bracing, rehabilitation therapy, and surgical intervention. Italy represents a limited exception with neridronate approval.

The clinical picture shifted in December 2025 when Mereo disclosed Phase 3 trial outcomes from its ORBIT and COSMIC studies. While neither program successfully achieved its primary objective—demonstrating reduced annualized clinical fracture rate versus placebo or bisphosphonate comparators—both delivered meaningful secondary outcomes. Specifically, both trials showed statistically significant improvements in bone mineral density (BMD) when measured against their respective control arms.

Mereo has scheduled a detailed data presentation at the J.P. Morgan Healthcare Conference on January 14, 2026, at 1:30 pm, offering comprehensive analysis including bone mineral density trends, vertebral fracture patterns, and patient-reported measures of pain and functional capacity. CEO Denise Scots-Knight indicated that the company continues evaluating the complete Phase 3 dataset to chart the optimal regulatory pathway forward, with potential regulatory dialogue in the planning stages.

Alvelestat: Advancing Toward Phase 3 In Rare Respiratory Conditions

Beyond setrusumab, Mereo is progressing alvelestat (MPH-966), an oral therapeutic targeting severe Alpha-1 antitrypsin deficiency (AATD) and bronchiolitis obliterans syndrome (BOS). These conditions represent distinct rare pulmonary disorders requiring novel treatment approaches.

Alpha-1 antitrypsin deficiency stems from genetic mutations reducing production of this critical defensive protein, which normally shields lung tissue from neutrophil elastase—an inflammatory enzyme released during immune responses. Alvelestat’s mechanism centers on inhibiting neutrophil elastase activity, potentially offering once-daily oral administration for sustained disease management.

Development momentum continues with anticipated initiation of a global Phase 3 pivotal trial, designed to enroll approximately 220 patients across early and advanced AATD stages over an 18-month treatment period. The efficacy assessment will employ the St. George’s Respiratory Questionnaire (SGRQ) Total Score as the primary endpoint for U.S. regulatory consideration, while CT-measured lung density will serve as the primary metric for European approval pathways. Mereo maintains active partnership discussions for Phase 3 execution and subsequent commercialization.

Vantictumab: Out-Licensing Model For Osteopetrosis

Mereo’s vantictumab (OMP18R5) program, targeting autosomal dominant osteopetrosis Type 2 (ADO2), has been licensed to Ashibio, Inc., with Mereo retaining European territorial rights. Ashibio assumes full global funding responsibility, with a Phase 2 investigation slated for the second half of 2026.

Financial and Stock Performance Context

Reduced expenditure on pre-commercial and manufacturing infrastructure related to setrusumab following the Phase 3 readout has favorably extended Mereo’s cash runway to mid-2027. Over the preceding twelve-month period, MREO stock has traded within a $0.20 to $3.25 range, reflecting the volatility typical of clinical-stage biotech development.