Executive Summary

Q3 2025 delivered a narrower net loss ($7.0M) and lower diluted EPS loss ($0.01) versus prior quarter ($14.6M, $0.02), aided by a $1.9M FX gain and stable operating loss trajectory; cash was $48.7M, with runway guidance “into 2027” maintained .
Results missed Wall Street consensus: revenue was $0 vs $4.97M consensus and EPS was -$0.01 vs -$0.005 consensus; Q2 revenue ($0.5M) had been a one-time milestone, not recurring, driving the Q3 revenue miss; expect estimate recalibration toward minimal near‑term revenue until milestone/partner inflows materialize *.
Setrusumab (OI) Phase 3 Orbit and Cosmic final analyses remain on track “around end of 2025”; EU pre‑commercial build‑out expanded to Nordic/Benelux, reinforcing launch readiness if data are positive .
Alvelestat (AATD‑LD) Phase 3 start‑up and partnering discussions continue; management reiterated pipeline confidence and capital discipline to sustain operations through catalysts .
Stock sentiment was volatile in Q3: the July 9 DMC update to proceed to final analysis coincided with a sharp ADR decline (-42.5%), framing year‑end readout as the next major trading catalyst .

What Went Well and What Went Wrong

What Went Well

“We are rapidly approaching a major transition period… setrusumab… on track to read out around the end of the year,” with expanded EU commercial readiness (SATURN, treatment center mapping beyond EU5 into Nordics/Benelux) .
Q3 operating discipline: operating loss was ~$10.0M and net loss improved to $7.0M, supported by a $1.9M foreign currency gain and lower G&A YoY ($6.0M vs $6.2M) .
Program momentum: DMC endorsed proceeding to final analysis for Orbit; safety in Cosmic consistent, maintaining clinical de‑risking into final analyses .

What Went Wrong

Revenue reverted to $0 in Q3 after Q2’s $0.5M one‑time milestone; consensus had expected ~$5.0M, leading to a significant miss and negative estimate surprise *.
EPS missed consensus (actual -$0.01 vs -$0.005), reflecting continued R&D spend on setrusumab pre‑commercial activities and Phase 3 preparation for alvelestat *.
Investor sentiment pressure: July 10th ADR slide (-42.52%) following mid‑year update increased volatility/risk premia into year‑end data readouts .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenues ($USD)	$0	$0.50M	$0
Loss from Operations ($USD ‘000s)	$(11,202)	$(10,499)	$(10,015)
Net Loss ($USD ‘000s)	$(12,887)	$(14,616)	$(7,024)
Diluted EPS ($USD)	$(0.02)	$(0.02)	$(0.01)
R&D Expense ($USD ‘000s)	$(3,930)	$(5,373)	$(4,270)
G&A Expense ($USD ‘000s)	$(7,272)	$(5,494)	$(6,045)
Cash & Equivalents ($USD ‘000s)	$62,483	$56,125	$48,698

KPI notes:

Q3 net loss improved YoY ($7.0M vs $15.0M) on FX gain and lower G&A YoY; operating loss ~$10.0M .
Shares outstanding: Ordinary shares 795,484,404; ADS equivalents 159,096,880 (each ADS = 5 ordinary shares) as of 9/30/25 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Cash runway	Through 2027	“Into 2027” (May and Aug 2025)	“Into 2027” (Nov 2025)	Maintained
Setrusumab Phase 3 (Orbit/Cosmic) timing	Data timing	“Around year-end 2025” (Aug 2025)	“Around end of 2025” (Nov 2025)	Maintained
Alvelestat Phase 3 initiation/partnering	Program status	“Phase 3 ready; finalizing start-up; in partner discussions” (May 2025)	“Phase 3 start-up ongoing; actively engaged with partners” (Aug/Nov 2025)	Maintained
Vantictumab licensing (ADO2)	Commercial rights	Not highlighted in Q1/Q2	EU rights retained; āshibio has U.S./RoW (Aug 2025)	New in Q3 context

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available in our document corpus; themes below derive from management’s prepared remarks in Q1/Q2/Q3 press releases.

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Setrusumab OI Phase 3 timing	IA2 mid‑2025 or final in Q4 2025; DMC in July endorsed proceeding to final analysis	Final analyses expected around end‑2025; threshold p<0.039 (Orbit) / p<0.05 (Cosmic); patients ≥18 months therapy	Steady progress toward final readout
EU pre‑commercial build	Engagement with HTA bodies and SATURN; EU5 focus	Expanded to Nordic/Benelux; market sizing and center identification continue	Expansion/intensification
Alvelestat Phase 3 & partner	Phase 3 ready; start‑up activities; partner discussions	Start‑up ongoing; multiple partner dialogues continue	Ongoing; partner not yet announced
Cash discipline	Cash runway into 2027	Cash $48.7M; runway into 2027 reiterated	Maintained despite cash draw
Legal/investor sentiment	N/A	Post‑DMC update ADR drawdown; class‑action notices by Pomerantz	Heightened sensitivity into readouts

Management Commentary

“We are rapidly approaching a major transition period… setrusumab… on track to read out around the end of the year… we continue to invest in commercial readiness… well positioned for a potential launch in our European territories.” — Dr. Denise Scots‑Knight, CEO .
“We look forward to the final analysis for… setrusumab… around the end of the year… we are continuing to advance partnering discussions around alvelestat… our prudent management of our cash and resources means we are well positioned… into 2027.” — Dr. Denise Scots‑Knight, CEO (Q2) .
“Alvelestat is now Phase 3 ready and we are finalizing the trial start‑up activities… believe that continued close management of our cash balance will enable us to support our operations into 2027.” — Dr. Denise Scots‑Knight, CEO (Q1) .
“Net loss… primarily reflecting an operating loss of $10.0 million and a foreign currency transaction gain of $1.9 million.” — Christine Fox, CFO (Q3 financials) .

Q&A Highlights

No Q3 2025 earnings call transcript or Q&A session was located in filings or our transcript index; management communication for Q3 occurred via the 8‑K press release .

Estimates Context

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue Consensus Mean ($USD)	$15.36M*	$0*	$4.97M*
Revenue Actual ($USD)	$0	$0.50M	$0
Primary EPS Consensus Mean ($USD)	$(0.00793)*	$(0.01188)*	$(0.00538)*
Diluted EPS Actual ($USD)	$(0.02)	$(0.02)	$(0.01)
EBITDA Consensus Mean ($USD)	n/a*	n/a*	$(10.92)M*
EBITDA Actual ($USD)	$(10.87)M*	$(9.59)M*	$(9.82)M*

Values retrieved from S&P Global.*

Implications:

Q3 missed on revenue and EPS versus consensus (no milestone recognition, continued operating spend). Q2 beat revenue consensus due to $0.5M one‑time milestone *.
Expect near‑term estimates to reset downward for revenue until additional milestones/partner payments are visibility; EPS/EBITDA should track operating loss and FX volatility *.

Key Takeaways for Investors

Year‑end setrusumab data are the principal stock catalyst; DMC guidance and ongoing safety support de‑risking, but efficacy thresholds (p<0.039 Orbit; p<0.05 Cosmic) must be met to unlock EU launch .
Q3 operational execution was disciplined; FX tailwind and lower G&A YoY narrowed net loss despite ongoing R&D and EU pre‑commercial spend .
Revenue will likely remain de minimis absent milestones; traders should watch for licensing receipts (e.g., alvelestat) and potential setrusumab‑related milestones to drive upside surprises *.
EU commercialization groundwork broadened (Nordics/Benelux), positioning for faster uptake if approvals occur; this enhances medium‑term commercialization thesis .
Partnering overhang: alvelestat Phase 3 remains partner‑dependent; announcement timing is uncertain but could re‑rate cash runway and de‑risk execution .
Elevated legal/investor sensitivity persists post‑July ADR drawdown; volatility into final analyses is likely; position sizing and optionality strategies (e.g., protective puts) may be prudent .
Base case: maintain focus on catalysts rather than quarterly P&L; upside hinges on positive Phase 3 readouts and timely partnering to support launch and Phase 3 execution .

Appendix: Additional Data Points

R&D YoY: Q3 2025 R&D $4.3M vs $3.2M in Q3 2024 (+$1.1M; setrusumab +$0.9M; alvelestat +$0.5M; etigilimab -$0.2M) .
G&A YoY: Q3 2025 G&A $6.0M vs $6.2M in Q3 2024 (-$0.2M; lower professional fees) .
Share count: Ordinary shares 795,484,404; ADS equivalents 159,096,880 as of 9/30/25 .
Final analysis conditions: patients on therapy ≥18 months; Orbit threshold p<0.039; Cosmic p<0.05 .

Citations:
8‑K Q3 2025 press release and financials .
8‑K Q2 2025 press release and financials .
8‑K Q1 2025 press release and financials .
Other Events 8‑K (DMC update) .
Investor alert press release (ADR price reaction) .

Mereo BioPharma Group plc (MREO)·Q3 2025 Earnings Summary