NEW YORK, December 29, 2025, 23:16 ET — Market closed
- Mereo BioPharma shares closed at $0.29, down 87.65%, after a Phase 3 setrusumab readout missed its main fracture-rate goal.
- An SEC filing said both late-stage studies missed the primary endpoint, though bone mineral density improved and no new safety signal emerged.
- Analysts cut targets and ratings after the data, as investors pivot to cash conservation and the rest of Mereo’s pipeline.
Mereo BioPharma Group plc shares closed down 87.65% at $0.29 on Monday after the company disclosed late-stage data that failed to hit a key fracture-rate endpoint for setrusumab, its lead rare-disease program. The stock traded between $0.20 and $0.30, with about 241 million shares changing hands, according to the company’s share data.
The miss lands at a delicate moment for the London-based biotech, which has leaned on setrusumab as its most visible late-stage value driver. Investors are now weighing how quickly the company can rein in spending and whether any narrower development path remains after the readout.
Setrusumab is being studied in osteogenesis imperfecta, a genetic disorder often called brittle-bone disease. The primary endpoint in both studies was annualized clinical fracture rate — essentially the number of fractures per year — a measure regulators and clinicians watch closely in the absence of approved therapies.
In an SEC filing, Mereo said neither the ORBIT study versus placebo nor the COSMIC study versus bisphosphonates met statistical significance on that primary endpoint, though both studies met secondary endpoints showing improvements in bone mineral density and the safety profile was unchanged. “Whilst we are disappointed by these results, we will be conducting additional analyses on the data,” Chief Executive Officer Denise Scots-Knight said. SEC
Mereo said ORBIT enrolled 159 patients aged 5 to 25 and randomized them 2-to-1 to setrusumab or placebo. COSMIC enrolled 69 patients aged 2 to under 7 and compared setrusumab with intravenous bisphosphonates, a class of bone-strengthening medicines often used in bone disorders.
The company said ORBIT’s placebo group had a low fracture rate, and the bone-density gains in treated patients did not translate into a corresponding reduction in fracture rates. In COSMIC, Mereo said improvements in bone mineral density were associated with a reduction in fracture rate versus bisphosphonates, but the reduction did not reach statistical significance.
Mereo said it had $48.7 million in cash at the end of the third quarter and will “tightly control costs,” including immediate reductions in pre-commercial and manufacturing activities — spending tied to preparing for a potential product launch before approval. The company also flagged partnering discussions for alvelestat, its program in alpha-1 antitrypsin deficiency-associated lung disease, as it looks to “maximize value” across its portfolio. SEC
Wall Street also moved quickly. BTIG cut its price target on Mereo to $1 from $6 while keeping a buy rating, according to an Investing.com report. LifeSci Capital analyst Cory Jubinville downgraded the stock to market perform from outperform, MarketBeat data showed.
Mereo’s partner on setrusumab, Ultragenyx Pharmaceutical, also sold off hard after the readout, underscoring how central the program had been to both companies’ near-term narrative, MarketWatch reported.
Before next session, traders will be watching for any follow-up disclosure that clarifies what “additional analyses” could mean in practice — including whether the companies see a viable path forward in pediatrics or on endpoints beyond fractures. Any update on the pace of cost cuts or on alvelestat partnering talks could also move the stock. SEC
Chart watchers now have a stark new trading map: Monday’s $0.20 low and $0.30 high are the nearest reference points after the collapse, with liquidity likely to remain driven by headline risk rather than fundamentals in the very short term.
Mereo has not announced a confirmed date for its next earnings report, though Investing.com lists an early April 2026 release on its earnings page. With setrusumab’s path uncertain, investors are likely to focus less on near-term revenue and more on cash burn, any revised spending plans, and whether the company needs to raise capital in 2026.
