Mereo BioPharma price target lowered to $1 from $6 at BTIG

BTIG lowered the firm’s price target on Mereo BioPharma (MREO) to $1 from $6 and keeps a Buy rating on the shares after the company announced that neither of the Phase 3 Orbit and Cosmic studies for setrusumab in Osteogenesis Imperfecta achieved statistical significance against their primary endpoints. However, the bone mineral density improvements had strong statistical significance in both trials and could support a potential path to market, adds the analyst, who points out that the FDA endorsed BMD as a valid surrogate endpoint in osteoporosis ten days ago. Based on today’s update, the firm is lowering its view of the probability of success for setrusumab in OI to 30% from 90% and “conservatively” removing alvelestat in AATD from its valuation on Mereo, the analyst tells investors.