UNLOCKING HEALTHCARE POTENTIAL FOR PATIENTS IN RARE AND SPECIALTY - - PowerPoint PPT Presentation

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UNLOCKING HEALTHCARE POTENTIAL FOR PATIENTS IN RARE AND SPECIALTY - - PowerPoint PPT Presentation

UNLOCKING HEALTHCARE POTENTIAL FOR PATIENTS IN RARE AND SPECIALTY DISEASES Denise Scots-Knight - CEO Richard Jones - CFO 29 April 2019 DISCLAIMER THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR RELEASE, PUBLICATION OR


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Denise Scots-Knight - CEO Richard Jones - CFO 29 April 2019

UNLOCKING HEALTHCARE POTENTIAL FOR PATIENTS IN RARE AND SPECIALTY DISEASES

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DISCLAIMER

1

Mereo BioPharma Group plc

THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL. This presentation has been prepared by Mereo BioPharma Group plc (the “Company”) solely for your information and for use at a presentation for the purpose of providing background information on the Company, its business and the industry in which it operates. For the purposes of this notice, “presentation” means this document, any oral presentation, any question and answer session and any written or oral material discussed or distributed during the presentation meeting. In giving this presentation, none of the Company or any of its subsidiary undertakings, or any of any such person's directors, officers, employees, agents, affiliates or advisers, undertakes any obligation to amend, correct or update this presentation or to provide the recipient with access to any additional information that may arise in connection with it. To the extent available, the data contained in this presentation has come from official or third party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. While the Company believes that each of these publications, studies and surveys has been prepared by a reputable source, the Company has not independently verified the data contained therein. In addition, certain of the data contained in this presentation come from the Company's own internal research and estimates based on the knowledge and experience of the Company's management in the market in which the Company operates. While the Company believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change without notice. Accordingly, undue reliance should not be placed on any of the data contained in this presentation. Forward-Looking Statements This presentation contains “forward-looking statements.” All statements other than statements of historical fact contained in this presentation are forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements usually relate to future events and anticipated revenues, earnings, cash flows or other aspects of our operations or operating results. Forward-looking statements are often identified by the words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” “may,” “estimate,” “outlook” and similar expressions, including the negative thereof. The absence of these words, however, does not mean that the statements are not forward-looking. These forward-looking statements are based on the Company’s current expectations, beliefs and assumptions concerning future developments and business conditions and their potential effect on the Company. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Company will be those that it anticipates. Factors that could cause actual results to differ materially from those in the forward-looking statements include risks relating to unanticipated costs, liabilities or delays; failure or delays in research and development programs; unanticipated changes relating to competitive factors in the Company’s industry; risks relating to expectations regarding the Company’s capitalization, resources and ownership structure; the availability of sufficient resources for company operations and to conduct or continue planned clinical development programs; the outcome of any legal proceedings; risks related to the ability to correctly estimate operating expenses; risks related to the ability to project future cash utilization and reserves needed for contingent future liabilities and business operations; risks related to the changes in market prices of the Company’s ordinary shares; the Company’s ability to hire and retain key personnel; changes in law or regulations affecting the Company; international, national or local economic, social or political conditions that could adversely affect the Company and its business; conditions in the credit markets; risks associated with assumptions the Company makes in connection with its critical accounting estimates and other judgments. All of the Company’s forward-looking statements involve risks and uncertainties (some of which are significant or beyond its control) and assumptions that could cause actual results to differ materially from the Company’s historical experience and its present expectations or projections. The foregoing factors and the other risks and uncertainties that affect the Company’s business, including those described in its Annual Report on Form 20-F, Reports on Form 6-K and other documents filed from time to time by the Company with the United States Securities and Exchange Commission (the “SEC”) and those described in other documents the Company may publish from time to time should be carefully considered. The Company wishes to caution you not to place Undue reliance on any forward-looking statements, which speak only as of the date hereof. The Company undertakes no

  • bligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by law.
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CORE STRATEGY FOCUSSED ON RARE DISEASES

Mereo BioPharma Group plc

Potential new products

Core Rare Disease Strategy Bone/ Musculoskeletal Endocrine Respiratory

BPS-804 Setrusumab MPH-966 Alvelestat

Potential new products Potential new products

>1000 patients High unmet need

Oncology

NAVI Navicixizumab ANTI-TIGIT Etigilimab BCT-197 Acumapimod BGS-649 Leflutrozole

Respiratory Endocrine

Potential new products

COMMERCIALIZE PARTNER

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MEREO – CONTEXT AND PERSPECTIVE

3

  • Merger with Oncomed

closed (NASDAQ: MREO) - total cash resources ~$70m

  • Phase 2 study in 112 adults

patients with OI - data 2019

  • PIP for pivotal study in OI

approved by EMA

  • Phase 2 study of MPH-966 in

adults with AATD enrolling – data - end of 2019

  • BCT-197 Phase 3 ready
  • Multiple opportunities for

corporate partnering Positioned for growth 2019

  • Acquired three Phase 2

products from Novartis in exchange for equity

  • BPS-804 for OI
  • BCT-197 for AECOPD
  • BGS-649 for HH
  • Raised $116m in equity

financing from UK institutional investors

  • Listed on the LSE (AIM:MPH)

The Foundation 2015 - 2016

  • Delivered two successful

clinical programmes

  • Phase 2 for BCT-197 in 271

patients for AECOP

  • Phase 2b for BGS-649 in 260

patients for HH

  • Initiated Phase 2b for BPS-

804 in adults with OI and fully enrolled 112 patients

  • Additional rare disease

product from Astra Zeneca

  • MPH-966 for AATD in Phase 2
  • Additional equity raise and

venture debt funding Operational Excellence 2017 - 2018

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OUR RARE DISEASE PRODUCT PORTFOLIO

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Product/disease

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OUR NON-RARE DISEASE PORTFOLIO

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Product/disease

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BPS-804 SETRUSUMAB

(ACQUIRED FROM NOVARTIS IN 2015)

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OSTEOGENESIS IMPERFECTA: A RARE, SEVERE GENETIC BONE DISEASE

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Mereo BioPharma Group plc

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Mereo BioPharma Group plc

OSTEOGENESIS IMPERFECTA (OI)

8

̴ 6.2

OI cases per 100,000 population in the US 1

̴ 10

OI cases per 100,000 population in the EU 2

Prevalence:

85% - 90%

linked to a gene mutation that produces abnormal type 1 collagen 1, 2

72% - 77%

  • f total OI population 3

Symptoms

  • Frequent bone fractures and brittle teeth
  • Early hearing loss, sight issues
  • Respiratory problems

Historically 83 patients received BPS-804, setrusumab In OI patients, statistically significant improvement shown in lumbar spine BMD; increase in biomarkers of bone building; reduction of biomarkers of bone resorption

OI types I, III and IV occur in

1) Based on Osteogenesis Imperfecta Foundation estimates 2) Based on Orphanet estimates 3) Shapiro J (2014) Osteogenesis Imperfecta: A Translational Approach to Brittle Bone Disease. Academic Press. Chapter 2: p15-22

No FDA or EMA approved therapies in OI

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SETRUSUMAB IN OI: ADULT PHASE 2B STUDY

9

Fully Enrolled

Trial arms: Study duration:

112

OI Patients

Types I, III and IV

6 months open label data 1H 2019 with 12 months H2 2019 Top line data from three blinded arms by the end of 2019 Three different monthly dosing regimens of BPS-804 Open label arm at top monthly dose

52

Weeks Analysis at 26 and 52 weeks

Primary endpoints

Trabecular volumetric BMD by HRpQCT versus baseline at 12 months Change in bone strength using finite element analysis

Secondary endpoints

  • Trabecular volumetric BMD by HRpQCT at 6 months
  • BMD by DXA scans at 6 and 12 months
  • HRpQCT parameters
  • Bone biomarkers
  • PRO and quality of life

Mereo BioPharma Group plc

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HRPQCT SCANS OF PATIENTS WITH OI AND CONTROLS

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Mereo Biopharma Group plc

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SETRUSMAB IN OI – PEDIATRIC PHASE 3 STUDY DESIGN

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Planned enrolment: 24 patients 5-18 years Total Study duration

~160

Severe OI Patients

Types I, III and IV

Approved in EU and Canada, US evaluation

  • ngoing

Patients on bisphosphonate therapy

One month dose finding – 3 doses versus placebo

Additional 128 patients

Randomised 1:1 placebo to selected dose

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Weeks

Primary endpoints

Fracture rate versus placebo at 12 months

Secondary endpoints

  • Trabecular volumetric BMD by HRpQCT
  • BMD by DXA scans 12 months
  • All HRpQCT parameters
  • Bone biomarkers
  • PRO and quality of life

Mereo BioPharma Group plc

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SETRUSUMAB IN OI – REGULATORY STATUS

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Granted orphan status in EU & US PIP agreed with EMA

Granted Priority Medicines (PRIME) status and included in Adaptive Pathways in the EU

  • Ongoing interactive dialogue with EMA,

HTAs and payers

  • Focus: prospective alignment on real

world evidence/registries Plan to engage with FDA to initiate pediatric Phase 3 trial in USA Planned initiation in EU and Canada

Mereo BioPharma Group plc

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MPH-966 ALVELESTAT

(ACQUIRED FROM ASTRAZENECA IN 2017)

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Mereo BioPharma Group plc

North America ~50,000 Europe ~60,000 Estimated prevalence of target patients (PiZZ and Nulls) Symptoms: Current treatment weekly IV alpha 1 antitrypsin protein – annual cost up to $150k ~9000 patients Alvelestat in 1000 patients; 4 COPD studies, cystic fibrosis and bronchiectasis study (positive)

Genetic mutation produces deficiency through abnormal folding of the protein or zero production of the protein Mutations in SERPINA1 gene chromosome 14 Only homozygotes (ZZ’s) and Nulls have severe disease

ALPHA-1 ANTITRYPSIN DEFICIENCY (AATD)

A rare, serious genetic disorder that results in early onset pulmonary disease

  • Age 20-50 – wheeze and reduced exercise tolerance
  • PiZZ and Null adults develop early onset emphysema
  • Some mutations can cause cirrhosis in children
  • Reduced life expectancy

14

Francisco et al (2012) Rare alpha-1-antitrypsin variants: are they really so rare? Therapeutic Advances in Respiratory Disease January 30 Luisetti et al (2004) α1-Antitrypsin deficiency · 1: Epidemiology of α1-antitrypsin deficiency Thorax 59:164-169

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Mereo BioPharma Group plc

HYPOTHESIS: RESTORING THE BALANCE IN ALPHA-1 ANTI-TRYPSIN DEFICIENCY RELATED LUNG DISEASE WITH NEUTROPHIL ELASTASE INHIBITOR – ALVELESTAT

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Elastase Anti-Elastase Alpha-1 antitrypsin Alvelestat is an Oral Neutrophil Elastase Inhibitor

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MPH-966 – PROOF OF CONCEPT PHASE 2 STUDY

  • Three-arm study with two different dosing arms versus placebo
  • Planned enrolment – 165 patients completed
  • Treatment duration – 12 weeks
  • FPI in November 2018, top-line data expected around end of 2019

Primary Endpoint

  • Desmosine - biomarker shown to have correlation with lung density by CT scan1

Proposed Patient Population

  • CT scan – emphysema
  • Confirmed genotype (PiZZ or Null)
  • FEV1>25%

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1) A biomarker in KAMADA’s RAPID study. Ref: Ma S, Lin YY, Cantor JO, et al. The effect of alpha-1 proteinase inhibitor on biomarkers of elastin degradation in alpha-1 antitrypsin deficiency: An analysis of the RAPID/RAPID Extension trials. Chronic Obstr Pulm Dis. 2017; 4(1): 34-44. Mereo BioPharma Group plc

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“GO-TO-MARKET” DEVELOPMENT STRATEGY: PREPARING FOR SUCCESSFUL COMMERCIALIZATION

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CRITCAL FACTORS FOR SUCCESSFUL ORPHAN DRUG LAUNCH AND COMMERCIALIZATION

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Patients see a real benefit Purchasers / Payers willing to pay Physicians prescribing

“We welcome all new therapies, but these new therapies need to get to the

  • patients. An unaffordable or

unavailable medicine is useless.”

Luca Pani, AIFA, CHMP Member and Scientific Advice Working Party Member, EMA

Stakeholders for success and sustainability

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CUSTOMER RELATIONSHIPS = A CRITICAL SUCCESS FACTOR IN RARE DISEASE THERAPIES

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INTERNAL FOCUS “Doing business with ourselves” EXTERNAL FOCUS Bringing the outside in

“ ” “ ” ’ – ’ “ ” ’

“ ” “ ” ’ – ’ “ ” ’ build any additional capabilities quickly, we will consider this too.

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BUILDING ENGAGEMENT TO UNDERSTAND THE POTENTIAL VALUE OF A THERAPY

20

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Potential Pediatric Pivotal Data 1. Starting now: “Go-to-market”-oriented approach to development programme

  • Integrated regulatory, HTA, payor approach to maximize meeting customers’ needs at key decision-

points 2. Structured in-country stakeholder and customer engagement: medical and access and patients 3. Agreement on late-stage development and commercialization preparation – assess range of models 4. Market research to deliver critical understanding of in-country pathways to market and opportunities

MEREO: DEVELOPMENT STARTS WITH THE END-GOAL IN MIND

2019 2020 2021 2022 2023 2018

Phase IIb Adult Data

2024

Open Label 6 month Full 12 month data

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REVIEW OF NEW RARE DISEASE PRODUCT OPPORTUNITIES

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NEW PRODUCT DEAL FLOW

5 10 15 20 25 30 Phase 1 Phase 2 Phase 3 Launched

Snap shot of 61 New Product Opportunities

Cardiovascular Dermatological Hematological Immune/inflammatory Infectious Metabolic Neurological Oncology Ophthalmic Pain Respiratory Musculoskeletal 23

>100 products 45% in rare diseases 21 Companies

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ACCELERATED DEVELOPMENT AND INTEGRATED STRATEGY

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Clinical Data

  • Phase 2 data in the indication or clear scientific rationale and supporting data in other indications
  • Significant safety package both clinical and pre-clinical (80-1000 patients)

Safety CMC

  • Strong documented CMC package with additional drug substance and drug product available for development

Regulatory

  • Documented early regulatory interactions set the scene for development of creative strategies within the new

regulatory frameworks

Deal terms

  • Alignment with success for both companies depending on success of the products

Programmes transferred and new studies enrolling patients ~ 12 months from deal signature

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FY 2018 FINANCIALS

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Mereo BioPharma Group plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

FOR THE YEAR ENDED DECEMBER 31, 2018

2016 £’m 2017 £’m 2018 £’m 2018 v 2017 £’m 2018 v 2017 % Research & Development (24.6) (34.6) (22.7) (11.9) (34%) General and admin expenses (11.6) (10.7) (12.5) +1.8 17% Operating loss (36.2) (45.3) (35.2) +10.1 +22% Finance income 0.4 0.8 0.3 (0.5) Finance charge (0.2) (1.1) (2.4) (1.3) Net currency impact 2.3 (1.4)

  • +1.4

Net Loss before tax (33.7) (47.0) (37.3) +9.7 +21% Income tax 5.3 8.2 5.3 (2.9) Net Loss (28.4) (38.8) (32.0) +6.8 +18% Loss per share (pence) 63p 56p 45p +11p +20%

Net of R&D 2018: (29.9) 2017: (37.1)

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Mereo BioPharma Group plc

CONSOLIDATED BALANCE SHEET

FOR THE YEAR ENDED DECEMBER 31, 2018

2017 £’m 2018 £’m Mereo at Merger (unaudited) £’m Oncomed at merger (Unaudited) £’m Post merger (unaudited) £’m Non current assets 33.2 32.8 14.5 Current assets Cash & cash deposits & short-term investments 52.5 27.5 14.8 39.0 53.8 Other current assets 10.6 7.0 Total Assets 96.3 67.3 Equity 62.5 32.8 Non-current liabilities 24.2 18.3 Current liabilities 9.6 16.2

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Mereo BioPharma Group plc

CONSOLIDATED STATEMENT OF CASHFLOWS

FOR THE YEAR ENDED DECEMBER 31, 2018

2017 £’m 2018 £’m Loss before tax (47.0) (37.3) Share based payments(including social security) 4.8 0.7 Tax received 5.3 8.2 Finance charges 1.1 1.9 Other working capital 3.0 2.4 Other movements 0.7 1.0 Net cash from operating activities (32.1) (23.1) Net cashflows used in investing activities (3.7) 0.3 Net cashflows from financing activities 33.7 (2.1) Cash and cash equivalents at December 31* 50.0 25.0

* Excludes short term deposits

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ACCOUNTING POLICY UPDATES

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  • IFRS 9 (Financial Instruments)
  • Adopted for FY’18
  • Adjusted opening balance of the carrying value of Novartis convertible loan by £0.1m
  • n January 1, 2018
  • No comparative restatement
  • Under IFRS 9, a modification loss arose on the new bank loan agreement in Sept 2018
  • IFRS 16 (Leases)
  • Effective from January 1, 2019
  • Modified retrospective application will mean no re-statement of prior balances
  • Total carrying value of leases at December 31, 2018 was £0.5m
  • Property lease
  • Specialist equipment leases in respect of imaging equipment for BPS-804 study
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UPDATE ON BANK LOAN

30

  • Bank loan of £20m was drawn in 2017 in 2 tranches
  • In Sept 2018 the loan was modified with a new loan agreement
  • Increased the total loan to £20.5m
  • Interest only period extended from Sept 2018 to April 2019 and interest reduced from

9% to 8.5%

  • Term of the loan unchanged (March 2021)
  • P&L charges relating to the IFRS 9 modification loss (non-cash) of £0.7m
  • Additional 226K warrants issued at an exercise price of £2.31
  • On April 23, 2019 the interest only period further extended to December 31, 2019
  • Term of the loan remains unchanged (March 2021)
  • A further 321k warrants expected to be issued in connection with the merger with

OncoMed

  • The loan provides for the potential to extend the term by 12 months based on certain

milestones

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THE ALPHA-1 PROJECT (TAP) FUNDING

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  • Agreement signed in October 2018
  • Not a material agreement financially but demonstrated commitment from this

key patient advocacy group in the US to the MPH-966 (alvelestat) program who are part of The Alpha-1 foundation Key terms of the agreement

  • Funding of up to $400k towards the MPH-966 Phase2 study based on

milestones

  • Warrants to subscribe for shares as each tranche of funding received (at the

prevailing price)

  • A success based payment back to TAP equivalent to the funding received on

first approval of MPH-966

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ONCOMED MERGER

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MERGER DEAL METRICS

Mereo Oncomed Merger Post closing Shares in issue 71.2 m 38.8m Price per share (at closing) £ 1.65 $ 0.89 New shares issued* 24.8m Number of shares post closing 96.0m OMED share to ADR ratio 0.127694 Deal value $53.2m ADR Fair Market Value at close** $10.73 Deal value per OMED share $1.37 Deal premium 54%

33

** Based on MPH share price of £1.65 and exchange rate of 1.3007 as at deal completion on April 23, 2019 *Represented by 4,956,664 ADR’s each representing five ordinary shares

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NEWS FLOW AND MILESTONES

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STRONG OPERATIONAL PROGRESS

BPS-804 804

  • Adult Phase 2b (US and

EU) completed enrolment of 112 patients in US and EU

  • Open label arm 6 month

data expected Q2 2019 and 12 month data Q4 2019

  • Pediatric fracture study

Phase 3 ready

35

BGS-649 49

  • Six month extension study

(12 month data) completed successfully

  • Merger with Oncomed

completed April, 23 2019 – US base and ADR programme, total cash resources ~$70m post merger

  • Focus on partnering non-

rare disease products including oncology products

  • IP strengthened
  • Significant number of new

rare disease products reviewed

MPH-966 966

  • Phase 2 POC study (US and

EU) initiated with first patient dosed in Q4 2019

  • Expect to enrol 165

patients across 3 arms

  • NCATS grant of $10m to

Univ Alabama at B’ham – Mereo supplying material

Mereo Biopharma Group plc

RARE RE DISEAS ASES ES NON-RARE RARE DISEAS ASES ES

BCT-197

  • Successful Type B End of

Phase 2 meeting

  • Outline of pivotal Phase

3 agreed with FDA

CORP RPORA ORATE TE

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Mereo BioPharma Group plc

36

2019 2020 2021 BPS-804 MPH-966 Partnering

BCT-197 BGS-649 NAVI ANTI-TIGIT

Additional Rare Disease Products

MEREO UPCOMING KEY MILESTONES

Paediatric Pivotal 12 month fracture Partnering and regulatory interactions New product opportunities 6m Adult HRPqCT data 12m

12m

Phase 2 POC Study

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Mereo BioPharma Group plc One Cavendish Place London, W1G 0QF UK +44 (0)333 0237 300