Sign in

You're signed outSign in or to get full access.

MB

Mereo BioPharma Group plc (MREO)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was operationally on track but financially softer: net loss was $12.9M and diluted EPS was -$0.02, driven by higher G&A and a $2.8M foreign currency loss .
  • Significant estimate misses: revenue $0 vs $15.36M consensus and EPS -$0.02 vs -$0.01 consensus; variance largely due to no milestone revenue recognized in the quarter and FX headwinds. Bold misses: Revenue miss and EPS miss (consensus values marked with asterisks; see S&P Global note) .
  • Setrusumab Phase 3 Orbit remains on track for IA2 in mid-2025 or final analysis in Q4 2025; pre-commercial preparations in Europe continued .
  • Alvelestat advanced to Phase 3 readiness with EU Orphan Designation; partnering discussions continue; cash of $62.5M funds operations into 2027 (unchanged guidance) .

What Went Well and What Went Wrong

What Went Well

  • “We continue to anticipate this will be an important, milestone-rich year… Orbit study… on track to read-out either at the second interim analysis in mid-2025 or at the final analysis in the fourth quarter” — CEO Dr. Denise Scots-Knight .
  • EU pre-commercial groundwork for setrusumab progressed (engagement with regulatory/HTA bodies and real-world data via SATURN) to support potential launch upon approvals .
  • Alvelestat secured EU Orphan Designation; trial start-up activities for a single global Phase 3 pivotal study are ongoing; partnering discussions active .

What Went Wrong

  • Net loss widened to $12.9M (vs $9.0M in Q1 2024) driven by higher G&A (+$1.4M YoY) and a $2.8M FX loss; operating loss was $11.2M .
  • No revenue recognized, increasing the likelihood of a consensus revenue miss when analysts had modeled revenue/milestone flows in Q1 .
  • Cash decreased by $7.3M in the quarter (to $62.5M), consistent with R&D and pre-commercial spend cadence; though runway guidance into 2027 remains unchanged .

Financial Results

Income Statement Summary (YoY)

MetricQ1 2024Q1 2025
Research and Development ($USD Millions)$3.994 $3.930
General and Administrative ($USD Millions)$5.906 $7.272
Loss from Operations ($USD Millions)$9.900 $11.202
Interest Income ($USD Millions)$0.617 $0.659
Interest Expense ($USD Millions)$0.310 $0.180
Changes in Fair Value of Warrants ($USD Millions)$(0.448) $0.416
Foreign Currency (Loss)/Gain ($USD Millions)$0.613 $(2.765)
R&D Tax Credit Benefit ($USD Millions)$0.477 $0.185
Net Loss ($USD Millions)$8.951 $12.887
Diluted EPS ($USD)$(0.01) $(0.02)
Weighted Avg Shares (Millions)700.263 784.279

Cash and Balance Sheet Highlights

MetricDec 31, 2024Mar 31, 2025
Cash and Cash Equivalents ($USD Millions)$69.802 $62.483
Total Assets ($USD Millions)$76.390 $68.322
Total Liabilities ($USD Millions)$15.421 $8.241
Shareholders’ Equity ($USD Millions)$60.969 $60.081

Program R&D Expense Breakdown

Program R&D ($USD Millions)Q1 2024Q1 2025
Setrusumab (UX143)$0.909 $2.244
Alvelestat (MPH-966)$2.613 $1.365
Etigilimab (MPH-313)$0.350 $0.207
Other$0.122 $0.114
Total R&D$3.994 $3.930

KPIs

KPIQ1 2025
Total Ordinary Shares Issued (Millions)795.001
Total ADS Equivalents (Millions)159.000
Cash Runway GuidanceInto 2027 (unchanged)

Results vs Estimates

MetricActual Q1 2025Consensus* Q1 2025Surprise
Revenue ($USD Millions)$0.000 $15.36*Miss
Primary EPS ($USD)$(0.020) $(0.008)*Miss
EPS - # of Estimates—7*—
Revenue - # of Estimates—7*—

Values with asterisks retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash runwayMulti-yearInto 2027 (Q3 2024/Q4 2024) Into 2027 (unchanged) Maintained
Setrusumab Orbit IA2 timing2025Mid-2025 IA2; final Q4 2025 Mid-2025 IA2 or final Q4 2025 Maintained
Setrusumab EU pre-commercial2025Ongoing HTA/payer/scientific advice Continued engagement; SATURN real-world data Maintained
Alvelestat Phase 3 readiness2024/2025Phase 3-ready around end of 2024 Phase 3-ready; start-up activities ongoing Maintained/Progressed

Earnings Call Themes & Trends

Note: A Q1 2025 earnings call transcript was not available in the document set.

TopicPrevious Mentions (Q3 2024 and FY 2024)Current Period (Q1 2025)Trend
Setrusumab clinical timelineBreakthrough Therapy; Orbit IA2 mid-2025; Cosmic ongoing IA2 mid-2025 or final Q4 2025; Cosmic aligned with Orbit Consistent progress
EU pre-commercial readinessHTA/payer engagement; SATURN publications Continued engagement; SATURN real-world evidence Building evidence base
Alvelestat regulatory/Phase 3Phase 3 package aligned with FDA/EMA; readiness end-2024 EU Orphan Designation; Phase 3 start-up ongoing; partnering Regulatory momentum
Cash runwayInto 2027 Into 2027 (unchanged) Stable
FX/macro impactsFX loss in Q3 2024 $2.8M FX loss in Q1 2025 Continuing headwind

Management Commentary

  • “We are continuing to invest in the pre-commercial activities for setrusumab to enable a successful launch in our European territory, following potential regulatory approvals.” — CEO Dr. Denise Scots-Knight .
  • “Alvelestat is now Phase 3 ready and we are finalizing the trial start-up activities to support our ongoing partnering process.” — CEO Dr. Denise Scots-Knight .
  • CFO signed the 8-K; Q1 2025 balance sheet and cash runway reiterated into 2027 .

Q&A Highlights

No Q1 2025 earnings call transcript was available in the document set; no Q&A highlights to report.

Estimates Context

  • The quarter missed consensus: revenue modeled at $15.36M* but actual was $0 due to no milestone revenue; EPS modeled at -$0.01* vs actual -$0.02, primarily impacted by higher G&A and a $2.8M FX loss .
  • Estimate models may need to reduce near-term revenue expectations to reflect lumpiness of milestone recognition and FX sensitivity in net income .

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term catalysts: Orbit IA2 in mid-2025, and potential final analysis in Q4 2025; Cosmic expected to align with Orbit timelines—key stock-moving events .
  • EU launch preparation for setrusumab advanced (HTA engagement, SATURN RWE); supports pricing/reimbursement positioning upon approval .
  • Alvelestat progressed (EU Orphan Designation; Phase 3 start-up), with partnering optionality; watch for partnership terms and timing .
  • Financials: no revenue in Q1; higher G&A and FX loss drove EPS below consensus—expect continued P&L volatility tied to FX and milestone timing .
  • Cash runway into 2027 is intact, but additional external funding or partnerships likely needed for full development/commercialization plans .
  • Share count increased after Novartis loan note conversion and warrant exercise in Feb 2025; monitor dilution impacts on per-share metrics .
  • Focus positioning ahead of pivotal readouts; risk/reward skew tied to clinical outcomes and European market access execution .