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Mereo BioPharma Group plc (MREO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net loss was $7.05M, improving versus Q3 ($15.00M) as FX headwinds abated and no revenue was recorded; cash ended Q4 at $69.8M, with runway guided “into 2027,” unchanged through the year .
  • EPS beat: Q4 actual EPS was -$0.01 vs Wall Street consensus of -$0.013; prior quarters were misses (Q3: -$0.021 actual vs -$0.019 est; Q2: -$0.020 actual vs -$0.010 est). Revenue was in line (no revenue expected/recorded) [GetEstimates*].
  • Clinical catalysts: second interim analysis for setrusumab (OI) expected mid-2025; potential final analysis in Q4 2025; EU/UK pre-commercial groundwork continued (GBA/NICE advice, SATURN RWE) .
  • Alvelestat (AATD-LD) received EU Orphan Designation (final EC decision in Q1 2025) and remains in active partnering; program described as Phase 3–ready with FDA/EMA alignment on endpoints .
  • Stock narrative drivers: near-term setrusumab interim timing (IA-2) and European launch readiness; update on alvelestat partnership timing and terms; cash runway stability into 2027 supports execution across 2025 milestones .

What Went Well and What Went Wrong

What Went Well

  • Setrusumab advancement: “Orbit Phase 3 study … progressing toward second interim analysis, expected mid-2025,” alongside data evaluation from Cosmic; EU pre-commercial activities (GBA, NICE advice; SATURN RWE) continue .
  • Regulatory momentum: Alvelestat granted EU Orphan Designation following positive EMA COMP opinion, complementing prior US Orphan and Fast Track designations; supports partnering process .
  • Cash runway stability: “Cash of $69.8 million as of December 31, 2024, expected to fund operations into 2027,” reiterated multiple times across the year .

Management quotes:

  • “With a strong financial position, we look forward to a transformative 2025, focused on bringing life-changing therapies to patients with rare diseases.”
  • “We look forward to reporting the topline data during 2025.”
  • “We have cash into 2027.”

What Went Wrong

  • Higher OpEx: FY24 R&D rose to $20.9M (+$3.5M YoY) driven by alvelestat Phase 3 prep and setrusumab EU activities; G&A increased to $26.4M (+$8.0M YoY) from pre-commercial work and corporate costs .
  • FX volatility: Q3 saw a $6.4M net FX loss (vs $2.5M gain in Q3 2023), materially worsening quarterly net loss; FX noise persisted intra-year .
  • No revenue: FY24 revenue was $0 (vs $10M in FY23 milestone), limiting offsets to higher operating spending and raising reliance on financing and future partner proceeds .

Financial Results

Core P&L vs Prior Periods and Estimates

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD)$0 $0 $0
Net Loss ($USD)$12.26M $15.00M $7.05M (FY $43.25M − 9M $36.21M)
EPS (Primary, per ordinary share)-$0.0198 (actual) / -$0.0101 (consensus) — miss [GetEstimates*]-$0.0208 (actual) / -$0.0190 (consensus) — miss [GetEstimates*]-$0.0097 (actual) / -$0.0127 (consensus) — bold beat [GetEstimates*]

Notes: EPS comparisons use S&P Global consensus; revenue consensus was $0 and actual $0 across Q2–Q4 (in line) [GetEstimates*].

Operating Expense Detail (Quarterly)

MetricQ2 2024Q3 2024Q4 2024
Research & Development ($USD)$4.95M $3.17M $8.82M (FY $20.93M − 9M $12.11M)
General & Administrative ($USD)$7.87M $6.20M $6.45M (FY $26.43M − 9M $19.98M)
Loss from Operations ($USD)$12.81M $9.37M $25.97M (FY $47.36M − 9M $21.39M)

Balance Sheet & Liquidity KPIs

MetricQ1 2024Q2 2024Q3 2024Q4 2024
Cash and Cash Equivalents ($USD)$48.7M $87.4M $80.5M $69.8M
Shares Outstanding (Ordinary)701.35M 768.82M 773.67M 775.73M
ADS Equivalents140.27M 153.76M 154.73M 155.15M
Cash Runway GuidanceInto 2026 Into 2027 Into 2027 Into 2027

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayQ1 2024Into 2026 ——
Cash RunwayQ2 2024Into 2027 —Raised (vs Q1)
Cash RunwayQ3 2024Into 2027 —Maintained
Cash RunwayQ4 2024Into 2027 —Maintained
Setrusumab Orbit IA-2 TimingQ4 2024“Second interim analysis expected mid-2025” Reiterated in FY release Maintained
Setrusumab Final AnalysisQ4 2024“Potential final analysis in Q4 2025” Reiterated Maintained
Alvelestat EU Orphan DesignationQ4 2024Positive COMP opinion; EC decision expected Q1 2025 Granted (reported in FY update) Achieved

Earnings Call Themes & Trends

Note: No formal Q4 earnings call transcript was available; management commentary was taken from the January 2025 JPM Healthcare Conference transcript and Q4-period press releases .

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Setrusumab clinical progressOrbit/Cosmic fully enrolled; FDA Breakthrough Therapy for setrusumab; ASBMR late-breaking Orbit data IA-2 mid-2025; potential final Q4 2025; EU pre-commercial work (GBA/NICE, SATURN) Positive momentum toward pivotal readouts
EU Launch ReadinessPre-commercial foundation; HTA/payor dialogues via EUnetHTA; patient identification underway Continued EU market access prep; consultants in EU5; ~10k patients identified; targeted field force plan Building commercial infrastructure
Alvelestat regulatory/partneringPhase 3 package submitted; FDA alignment; active partner discussions EU Orphan Designation; partner search ongoing; Phase 3–ready status reiterated Strengthened profile; partnering focus
FX/macro impactsFX gains aided prior-year comps; cash bolstered by $50M financing FX volatility subsided from Q3; cash down sequentially on spend Mixed but improving vs Q3
R&D/OpEx trajectoryR&D up on setrusumab EU activities and alvelestat prep; G&A up on pre-commercial work FY24 R&D $20.9M; G&A $26.4M; Q4 R&D spike vs prior quarters Elevated spend into key catalysts

Management Commentary

  • Strategic focus: “2024 was a year of focused execution… Orbit… set to read out… This could set the stage… to file for regulatory approvals in the U.S. and EU… Our European pre-commercial activities are ongoing” .
  • Launch readiness: “We believe we know how to commercialize products in Europe… consultants in each of the key EU5… initial patient population of 10,000… infield force of 65 at peak” .
  • Interim analysis framing: “IA-2… uses 20% of the alpha… requires a p<0.01… we believe [it] has a really good chance of hitting” (CSO Lewicki) .
  • Alvelestat positioning: “We’ve been improving the program month after month… Now it’s all about getting the right partner and the right deal structure” .

Q&A Highlights

  • Interim analysis implications: IA-1 used 2% alpha with an extremely high bar (p<0.001); IA-2 mid-2025 uses 20% alpha (p<0.01), with more events and time on drug—management is “pretty confident” in IA-2 set-up .
  • EU market size & value: OI prevalence and identified patients in Europe suggest meaningful addressable market; analogs like Crysvita show multi-hundred-million revenue potential despite relatively small treated populations .
  • Alvelestat partnership timing: No explicit timing guidance; emphasis on program optimization and securing a “really good partner” with aligned deal structure .

Estimates Context

MetricQ2 2024Q3 2024Q4 2024
Primary EPS Consensus Mean-$0.0101*-$0.0190*-$0.0127*
Primary EPS Actual-$0.0198*-$0.0208*-$0.0097*
Revenue Consensus Mean ($USD)$0*$0*$0*
Revenue Actual ($USD)$0 $0 $0
Primary EPS – # of Estimates5*5*7*
Revenue – # of Estimates5*5*6*

Interpretation:

  • Q4 EPS beat by ~$0.003 per share; Q3 and Q2 were misses. Revenue in line at $0. Estimate counts rose modestly into Q4, improving visibility [GetEstimates*].

Values with asterisk were retrieved from S&P Global.

Key Takeaways for Investors

  • Q4 stabilization: Sequential net loss improvement to $7.05M and EPS beat signal tightening execution into 2025 catalysts despite sustained pre-commercial and R&D spend [GetEstimates*].
  • Setrusumab catalyst path: IA-2 mid-2025 with a more permissive alpha spend and longer exposure suggests a credible shot at success; final analysis in Q4 2025 is a backstop .
  • EU launch readiness: Active HTA/payor engagement (GBA/NICE; EUnetHTA) and RWE via SATURN, plus identified patient cohorts in EU5, support a faster launch curve post-approval .
  • Alvelestat optionality: EU Orphan Designation and Phase 3–ready package enhance partnering leverage; watch for structure (upfront/royalties) and partner quality .
  • Cash runway: Into 2027 across all 2024 updates provides funding cover for pivotal milestones; monitor quarterly OpEx cadence vs commercial build-out pacing .
  • Trading setup: Near-term stock moves likely tied to setrusumab IA-2 headlines and any alvelestat partnership disclosure; estimate revisions could follow IA-2 outcomes [GetEstimates*].
  • Risk management: FX swings impacted Q3; guidance and clinical timing maintained across Q4—focus on trial event accrual, variability considerations highlighted by management .

Additional Source Documents Read:

  • Q4/FY 2024 8-K press release (financial results and corporate highlights)
  • Q3 2024 8-K press release and exhibits
  • Q2 2024 8-K press release and exhibits
  • Q1 2024 8-K press release and exhibits
  • Jan 12, 2025 program update press release (EU Orphan Designation for alvelestat; setrusumab IA-2 timing)
  • JPM 2025 conference transcript (management commentary and Q&A)

Values with asterisk were retrieved from S&P Global.