Mereo BioPharma Reports $7M Net Loss in Q2 2026, Seeks Additional Funding

Mereo BioPharma Group plc reported a net loss of $7.0 million for the second quarter of 2026, a significant improvement compared to a net loss of $14.6 million in the same period of the previous year. The company did not generate any revenue during the quarter, a decrease from $500,000 in the prior year, which was attributed to a one-time milestone payment related to a licensing agreement. Operating expenses for the quarter totaled $7.0 million, down from $10.5 million in the second quarter of 2025, primarily due to reduced research and development (R&D) costs.

For the first half of 2026, Mereo reported a net loss of $13.7 million, compared to a loss of $27.5 million in the first half of 2025. The decrease in losses was driven by a reduction in total operating expenses, which fell from $21.7 million to $15.8 million year-over-year. R&D expenses decreased to $6.6 million from $9.3 million, reflecting lower spending on its lead product candidates, setrusumab and alvelestat, as the company scaled back on certain activities in preparation for potential Phase 3 studies.

Mereo's total assets as of June 30, 2026, were $34.7 million, down from $45.9 million at the end of 2025. The decline in assets was primarily due to a decrease in cash and cash equivalents, which stood at $30.1 million, down from $41.0 million at the end of the previous fiscal year. The company’s accumulated deficit increased to $514.5 million, reflecting ongoing operational losses. Mereo's total liabilities also rose to $6.1 million from $5.0 million, largely due to an increase in accrued expenses.

Strategically, Mereo has entered into an Option and License Agreement with Sentynl Therapeutics for the U.S. commercial and global manufacturing rights to alvelestat, which could provide up to $40 million in upfront and R&D payments, along with potential milestone payments of up to $435 million. This agreement is part of Mereo's strategy to enhance its product pipeline and secure additional funding for its ongoing development efforts. The company continues to focus on its late-stage product candidates, including setrusumab for osteogenesis imperfecta and alvelestat for severe alpha-1 antitrypsin deficiency-associated lung disease.

Looking ahead, Mereo anticipates that its current cash reserves will be sufficient to fund operations into late 2027. However, the company acknowledges the need for additional funding to support its development plans and potential commercialization of its product candidates. Mereo's management remains committed to pursuing various funding avenues, including public or private equity financing, to ensure the continuation of its research and development activities.