Mereo BioPharma Announces Formal Launch of Company; Raises $119m (c.£76.5m) and Acquires Innovative Mid-Stage Clinical Product Portfolio From Leading Pharmaceutical Company

LONDON, July 29, 2015 /PRNewswire/ --

A new UK company focused on acquiring, rapidly developing and commercialising innovative medicines to transform patient quality of life and improve human health 

Highly experienced management team; blue chip investors 

Mereo BioPharma Group Ltd ("Mereo"), a recently-formed speciality biopharmaceutical company, announces that it has successfully raised $119m (c. £76.5m), gross, from blue chip institutional investors and simultaneously acquired a portfolio of three innovative clinical-stage development programmes from Novartis Pharmaceuticals. Novartis, through the shares issued in consideration for the acquisition of products, will also hold an equity stake in Mereo.  

Mereo is a new UK-based company whose mission is to acquire and rapidly develop innovative medicines that have the potential to transform patient quality of life and improve human health. Mereo intends to optimise the commercial value of programmes by entering into partnering deals at key value inflection points or, for selected opportunities, commercialising products itself. Mereo is building a strong pipeline of innovative medicines, particularly focused in rare and specialist disease areas, through the acquisition of validated, mid-stage development programmes from large biopharmaceutical companies.  Mereo has access to an extensive network of experts with experience across multiple clinical disciplines and has entered into a strategic development partnership with ICON, a leading global contract research organisation (CRO), for the clinical development of its portfolio.  

Key investment highlights for Mereo are as follows:

• An innovative product portfolio from Novartis 

Mereo's initial mid-stage portfolio comprises three exceptionally well characterised, novel products for the treatment of diseases with considerable unmet medical need, acquired from Novartis. Each programme has a comprehensive dataset, including proof of concept clinical studies. Mereo's pipeline comprises the following programmes:  

• BPS-804 in the orphan disease Osteogenesis Imperfecta or Brittle Bone Syndrome is a fully human monoclonal antibody which is being developed to improve bone density (and thereby reduce fractures) in osteogenesis imperfecta (OI), commonly known as brittle bone syndrome.

• BCT-197 in acute exacerbations of COPD is an orally active p38 MAP kinase inhibitor being developed as first-line acute therapy alongside existing treatment and supportive care for acute exacerbations of chronic obstructive pulmonary disease (AECOPD).  

• BGS-649 in hypogonadotrophic hypogonadism is a novel orally active aromatase inhibitor being developed as a first-line therapy for the treatment of obese men with hypogonadotrophic hypogonadism (HH), with the aim of normalising testosterone levels.  

• Strategic development partnership with ICON 

Mereo's strategic partnership with ICON provides a dedicated global team working closely with Mereo from pre-acquisition through to conduct of global clinical studies for its pipeline products. The relationship has been structured to enable Mereo to expand its product portfolio without the addition of significant internal resources.  

• A strong investor base 

Mereo has secured $119m (c. £76.5m), gross, from UK institutional investors Woodford Investment Management and Invesco Perpetual. In addition, Novartis, through the shares issued in consideration for the acquisition of products, will hold an equity stake in Mereo and intends to make a cash investment in Mereo in future financings.  

• A highly experienced management team 

The team is led by Dr Denise Scots-Knight (Pollard-Knight) as Chief Executive Officer, formerly Managing Partner of the healthcare-focused venture capital investor Phase4 Partners and Dr Peter Fellner as Chairman, who has a wide range of experience in biotechnology and pharma companies. Mereo's management team is highly experienced in identifying and selecting new product opportunities, managing clinical development pipelines, capital raising and structuring in- and out-licensing transactions.

Commenting on today's announcement, Dr Denise Scots-Knight, CEO of Mereo said:  

"We believe that by acquiring quality assets from Novartis and securing substantial financing we have put in place the building blocks to create a successful specialty biopharmaceutical company. Through the experience and connections of the team and Board we are delighted to have been able to work with a visionary global leader in Novartis Pharmaceuticals in building a new model to help optimise the development of pharmaceutical pipelines. We believe the exceptional experience and track record of the Mereo team and Board will enable us to rapidly build a globally competitive business."    

Commenting on today's announcement, Dr Peter Fellner, Chairman of Mereo said:

"We believe the substantial fundraising underpinning the launch of Mereo is a strong endorsement from the investment community of our vision to create a UK-based biopharmaceutical leader. This reflects both the extensive experience of the management team and Board, as well as the extremely high quality of programmes acquired from Novartis which form the initial portfolio of Mereo."    

WG Partners LLP acted as advisor to Mereo BioPharma in connection with this transaction. Proskauer teams in London and New York provided legal advice to Mereo Biopharma in relation to the transaction.
 

About Mereo 

Mereo is based in London and was founded in March 2015 to fund and develop novel, innovative specialist focused products from large pharmaceutical or biotechnology companies.  

Pharmaceutical companies face increasingly difficult choices in the allocation of internal resources to their drug development programs.  With significant P&L constraints and rich pipelines it has become increasingly difficult for many companies to fully fund and advance development all of their drug candidates, especially beyond Phase 2. Mereo has been formed to take advantage of the global pharmaceutical industry's drive for creative ways to progress their clinical development pipelines.  

Mereo has acquired an initial mid-late stage portfolio of three exceptionally well characterised novel products for the treatment of diseases with considerable unmet medical need from Novartis Pharmaceuticals. Each of these programmes has a comprehensive dataset for both pre-clinical and proof-of-concept clinical studies.  Additional product opportunities are under evaluation.

Mereo's focus is the development of innovative medicines that have the potential to significantly transform the lives of patients suffering from rare and other specialised conditions around the world.  To do this, the Company depends on the combination of its team's expertise in selecting and acquiring product opportunities, creating value in the development pipeline and structuring creative transactions. Mereo's internal expertise is complemented by a unique partnership with a leading global CRO, ICON.

Mereo combines the operational discipline and efficiency of a small company with the financial resources to conduct comprehensive clinical studies.  Mereo will rapidly progress each of the products through further value inflection points before partnering or divesting its products.  The Company also has the option to directly commercialise products, for example in orphan disease indications.  

Senior management and Board of Directors 

Management team 

• Dr. Denise Scots-Knight, CEO and Co-Founder  

Denise is our CEO, a board member and co-founder of Mereo. Prior to Mereo, she led Phase4 Partners' MBO from Nomura in 2010 becoming Phase4's Managing Partner. Prior to becoming a venture capitalist she was in R&D management at Amersham and Fisons and a senior executive at Scientific Generics.  At Nomura, she became Managing Director after heading the life science investment team.  Prior to Nomura, she was investment manager at Rothschild Asset Management. She is Chairman of Nabriva and board member of OncoMed (OMED), and Albireo. She has served on many European and US private and public boards, including Idenix (until acquired by Merck for $3.5bn). Denise has a PhD and BSc (Hons) from Birmingham University and was Fulbright scholar at UC Berkeley.

• Richard Bungay, CFO/COO  

Richard is our CFO and Chief Operating Officer, with responsibility for finance, manufacturing and non-clinical development activities. He has over 20 years' experience in senior finance and strategic roles within the pharmaceutical and biotechnology sector, latterly as CFO of Glide Technologies. Richard's prior experience includes CFO of Verona Pharma, CEO of Chroma Therapeutics, Director of Corporate Communications at Celltech and Finance Director of the Respiratory and Inflammation therapy area at AstraZeneca. He qualified as a Chartered Accountant with Deloitte and has a BSc in Chemistry from Nottingham University. Richard is a Non-Executive Director of Glide Technologies and Chroma Therapeutics.  

• Charles Sermon, GC and Co-Founder  

Charles is our General Counsel, Company Secretary and a co-founder of Mereo.  He has over 20 years' experience in corporate law. Prior to Mereo, he worked for Phase4 Partners since 2010. He was also involved in Phase4's MBO and the sale of Nomura's life science portfolio in 2010. He joined Nomura as an Associate Director in 1998 and worked for Nomura's life science investment team. Before joining Nomura Charles was a corporate lawyer with Freshfields. Charles has an LLB (Hons) from Hull University and is a member of the Mayor of London Enterprise Panel's Digital, Science and Technology Working Group.  Charles is a board member of Phase4 Partners.

• Dr. Alastair MacKinnon, CMO and Co-Founder  

Alastair is our Chief Medical Officer and a co-founder of Mereo. Prior to Mereo, he worked for Phase4 Partners, a global lifescience venture capital firm, having originally joined Nomura in 2005. Before Nomura, he was a practising physician in the UK for 10 years.  Alastair received a BSc and MBBS from King's College London, is a Member of the Royal College of Surgeons of Edinburgh (MRCS) and has a Diploma in Corporate Finance from the London Business School. Alastair is a board member of Phase4 Partners.  

• John Richard, Head of Corporate Development and Co-Founder  

John is our Head of Corporate Development and a co-founder of Mereo. Prior to Mereo, he worked with the co-founders at Nomura then Phase4 Partners since 2000. He has significant corporate, operational and transactional experience, having served in various executive, director and advisory roles throughout his career. He is a board member of Biota, Phase4 Partners, QUE Oncology and serves as Chairman of Targacept. He is a corporate development advisor to Albireo. Previously, he was Executive VP Business Development at SEQUUS, where he was responsible for negotiating SEQUUS' acquisition by ALZA.  John also headed business development for VIVUS and Genome Therapeutics; where he established numerous alliances. He was also CEO and co-founder of Impath (subsequently acquired by Genzyme). John holds a MBA from Harvard Business School and BS from Stanford University.

Board of Directors 

• Dr. Peter Fellner, Chairman  

In addition to Mereo, Peter also serves as Chairman of the biotech and medtech companies AblynxNV, Vernalis plc and Consort Medical plc.  He was also Chairman of Optos until its recent acquisition by Nikon Corporation. In addition, he is a member of the Novo A/S Advisory Group and a member of the UCB SA Science Advisory Board. He has previously served on the Boards of a wide range of life science companies, including as Vice-Chairman of Astex Pharmaceuticals Inc. until its sale to Otsuka in 2013, Director of the global biopharmaceutical company UCB SA from 2005 to 2014 and Chairman of Acambis plc from 2006 until its acquisition by Sanofi in 2008. He was Chairman of Celltech Group plc until its acquisition by UCB in 2004, having been CEO from 1990. Before Celltech he was CEO of Roche UK from 1986 to 1990.  

• Dr. Denise Scots-Knight, CEO 

• Dr. Anders Ekblom, Board Director 

Anders has extensive experience as an executive and leader with broad business knowledge from senior roles in the biopharmaceutical industry, with global working cross-functions and different countries delivering products, projects, productivity and change management. He is currently Chairman of the Board at Karolinska University Hospital and a Non-Executive Board member of several biotech companies. During two decades at AstraZeneca, he was a member of global executive teams including Executive VP Global Drug Development, EVP Global Medicines Development, Global Head Clinical Development, Global Therapy Area Head, Global Head Science & Technology Integration, and CEO AstraZeneca AB Sweden. Anders is also a board certified MD (Anaesthesiology and Intensive Care), PhD, DDS, and Associate Professor at Karolinska Institutet, Stockholm, Sweden and a fellow of the Royal Swedish Academy of Engineering Sciences.  

• Dr. Frank Armstrong, Board Director 

Frank has served as CEO to a number of healthcare and biopharmaceutical companies including CuraGen, and Fulcrum Pharma. He held senior management positions including Executive VP Product Development at Bayer AG, Senior VP Medical Research at Zeneca Pharmaceuticals (now AstraZeneca), and Senior VP at Merck Serono. Frank holds a MBChB from the University of Edinburgh and became a member of the Royal College of Physicians in 1984. He was elected Fellow of Royal College of Physicians, Edinburgh in 1993, and also Fellow of Faculty of Pharmaceutical Physicians in 1994.  

• Peter Bains, Board Director 

Peter has over two decades of experience in the pharmaceutical industry encompassing strategic and operational leadership expertise across global geographies, functions and business segments. He is currently CEO of Syngene International, a subsidiary of Biocon, Asia's largest biotechnology company. He also currently serves as Non-Executive Director for Sosei, a Tokyo listed biotech company, Phase4 Partners and Kromek Group, a UK AIM listed imaging and detection technology company. He is also Chairman of Fermenta Biotech, a subsidiary of DIL, a Mumbai listed company. Previously, he had 23-year career at GlaxoSmithKline, where he held multiple senior roles. Peter received a BSc Combined (Hons) in Physiology/Zoology from Sheffield University.  

• Kunal Kashyap, Board Director 

Kunal is a Chartered Accountant and is currently Chairman and Managing Director of Allegro Capital Advisors, a leading Indian investment bank.  Kunal has a deep understanding of the life sciences industry, built over two decades of advising companies in the industry on fund raising, IPO's, mergers and acquisitions, IP licensing etc. He is an Independent Director of GlaxoSmithKline Consumer Healthcare Ltd, and Phase4 Partners. He was also Founder and Executive Director of Celstream Technologies, a leading software product engineering organization. From 1994-2000 he was a global partner at Arthur Andersen responsible for building and developing the firm's practice in Southern India.  

Pipeline summary 

   
                        BCT-197            BPS-804            BGS-649
    Development status  2a                 2b                 2b
                                           Orphan bone
    Therapeutic area    Respiratory        disease            Metabolic
    Indication          AECOPD             OI                 HH
                                           Monoclonal
    Modality            Small molecule     antibody           Small molecule
    Mechanism of                                              Aromatase
    action              P38 MAPK inhibitor Undisclosed        inhibition

MAPK, mitogen-activated protein kinase; AECOPD, acute exacerbations of chronic obstructive pulmonary disease; OI, osteogenesisimperfecta; HH, hypogonadotrophic hypogonadism

About osteogenesis imperfecta (OI) 

OI is an orphan genetic disorder that is characterized by fragile bones that break easily. In addition to fractures, people with OI often have muscle weakness, hearing loss, fatigue, joint laxity, curved bones, scoliosis, and short stature. The majority of cases of OI (possibly 85-90 %) are caused by a dominant mutation in a gene coding for type I collagen, a key component of healthy bone. Treatment of OI is supportive, focusing on minimizing fractures and maximizing mobility, but to date, there are no treatments that address the underlying bone weakness.

About acute exacerbations of COPD (AECOPD) 

An AECOPD is characterised by a sudden worsening in the COPD patient's symptoms of dyspnoea, cough and sputum production. They last for several days and requiring in a step up of medication and often hospitalisation. AECOPDs occur in the natural course of the disease but are commonly triggered by infections and air pollution but one third do not have an identifiable trigger. Both airway and systemic inflammation are characteristic drivers of the disease.

About hypogonadotrophic hypogonadism (HH) 

HH in men is a clinical syndrome that results from inadequate levels of testosterone. This can be primary, or secondary due to disruption of one of more levels of the hypothalamic-pituitary-testicular axis. After the age of 30, the level of testosterone decreases by about 1-2% per year. In the obese the decrease in testosterone is increased by the high levels of the aromatase enzyme in the fat tissue. These are both considered secondary hypogonadism. Low levels of testosterone have been related to a range of health outcomes including increasing levels of obesity, cardiovascular disease, hypertension, insulin resistance, type 2 diabetes, depression, and osteoporosis.  

About Woodford Investment Management 

Woodford Investment Management is a fast-growing asset management company built on a founding philosophy of transparency and simplicity. Launched in May 2014, the company has more than £12bn assets under management and advice. Further information can be found at https://woodfordfunds.com

Enquiries

For further information, please contact:

Mereo BioPharma Group Ltd
Denise Scots-Knight, Chief Executive Officer
Richard Bungay, Chief Financial Officer
+44(0)20-3036-0355

FTI Consulting (Public relations adviser to Mereo)
Ben Atwell
Simon Conway
+44(0)20-3727-1000

SOURCE Mereo BioPharma Group Ltd