Mereo Biopharma Group Plc (MREO) AI Stock Analysis

• Market Cap: $456.33M
• Dividend Yield: N/A
• Average Volume (3M): 1.13M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.86
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 36
• Sector: Healthcare
• Sector Strength: 39
• Industry: Biotechnology
• EPS (TTM): -0.02
• Shares Outstanding: 159,000,290
• 10 Day Avg. Volume: 1,087,951
• 30 Day Avg. Volume: 1,132,389
• PEG Ratio: 0.04
• Price to Book (P/B): 7.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -11.65
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 325.60
• Enterprise Value/Gross Profit: -1.59K
• Enterprise Value/Ebitda: -2.49
• 1Y Price Target: $7.75
• Price Target Upside: 170.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 43 Neutral
• Price Target: ―

Mereo Biopharma Group's overall stock score reflects significant financial and operational challenges typical of an early-stage biotech firm. The lack of revenue and ongoing cash flow issues weigh heavily on its financial performance. Technical indicators suggest some bearish momentum, although not excessively so. The valuation remains unattractive with a negative P/E ratio and no dividends, indicating limited immediate returns for investors.

Positive Factors

Financial Outlook

The company reiterated cash runway will support operations into 2027, providing a stable financial outlook.

Market Opportunity

There are no approved therapies for OI, and current treatment relies on off-label bisphosphonates that have modest impacts on fracture rate, highlighting the potential market opportunity for setrusumab.

Negative Factors

Clinical Trial Risks

Key risks include the degree of fracture rate variability across patients, which may be higher in Phase 3 considering that a greater proportion of generally more severe Type 3 and 4 patients were enrolled.

Financial Constraints

Years of cash left is approximately 1.3, indicating potential financial constraints for Mereo Biopharma.

Mereo Biopharma Group Plc Business Overview & Revenue Model

Company Description

Mereo BioPharma Group plc, a biopharmaceutical company, develops and commercializes therapeutics for the treatment of oncology and rare diseases in the United Kingdom and internationally. Its lead product candidate, etigilimab (OMP-313M32), an antibody T-cell immunoreceptor with Ig and ITIM domains, which is in Phase 1b clinical trial for the treatment of tumor. The company is also developing Navicixizumab (OMP-305B83), which has completed Phase 1b clinical trials for the treatment of the late line ovarian cancer; Acumapimod (BCT-197), a p38 MAP kinase inhibitor that is in Phase II clinical trials to treat acute exacerbations of chronic obstructive pulmonary disease; and Leflutrozole (BGS-649), an oral aromatase inhibitor for the treatment of hypogonadotropic hypogonadism. In addition, it develops rare disease product candidates, including Setrusumab (BPS-804), a novel antibody for the treatment of osteogenesis imperfecta; and Alvelestat (MPH-966), an oral small molecule that is in Phase II clinical trial to treat Alpha-1 antitrypsin deficiency. The company has a collaboration with The University of Texas MD Anderson Cancer Center to evaluate anti-TIGIT therapeutic antibody candidate, etigilimab. Mereo BioPharma Group plc was incorporated in 2015 and is based in London, the United Kingdom.

How the Company Makes Money

Mereo BioPharma Group Plc primarily generates revenue through partnerships and collaborations with other pharmaceutical and biotechnology companies. These partnerships often involve licensing agreements, milestone payments, and royalties related to the development and commercialization of its drug candidates. Additionally, the company may receive funding from grants and research collaborations to support its R&D initiatives. By advancing its clinical-stage programs and successfully bringing its therapeutics to market, Mereo aims to create revenue streams through product sales and continued licensing arrangements.

Mereo Biopharma Group Plc Financial Statement Overview

Summary

Mereo Biopharma Group Plc's financial statements reflect a typical early-stage biotech profile with high R&D expenses and no revenue generation, leading to significant losses. The balance sheet shows some financial prudence with moderate leverage, and the strong cash position is essential for ongoing operations. However, persistent cash flow issues and negative profit margins pose challenges to long-term sustainability and profitability.

Income Statement

The income statement shows significant challenges with negative revenue growth, declining EBIT and EBITDA margins, and consistent net losses over the years. The gross profit margin is non-existent due to zero revenue in the latest year. The company faces substantial hurdles to profitability, which is common in early-stage biotech firms focusing on research and development.

Balance Sheet

The balance sheet indicates a reasonable equity position with a positive equity ratio and manageable debt levels. However, the debt-to-equity ratio has improved over the past year, suggesting cautious leverage management. The company's total assets decreased, which may affect its capacity to invest in future growth. Nonetheless, the financial stability offers a moderate foundation amidst operational challenges.

Cash Flow

Cash flow analysis reveals a negative free cash flow trend, indicating high cash burn typical for biotech firms in development phases. Operating cash flow remains negative, but there is a strong cash position due to past financing activities. The consistency in raising funds is a positive sign for liquidity, yet the dependency on external financing highlights operational sustainability concerns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	0.00	0.00	10.00M	1.51M	36.46M	393.00K
Gross Profit	-257.29K	0.00	7.43M	571.00K	18.56M	-15.95M
EBITDA	-44.53M	-47.36M	-26.06M	-42.06M	-5.00M	-37.52M
Net Income	-47.19M	-43.25M	-29.47M	-34.20M	12.72M	-163.63M
Balance Sheet
Total Assets	68.32M	76.39M	66.50M	88.08M	126.42M	62.95M
Cash, Cash Equivalents and Short-Term Investments	62.48M	69.80M	57.42M	56.33M	94.30M	23.47M
Total Debt	747.00K	6.43M	5.95M	12.77M	16.76M	17.94M
Total Liabilities	8.24M	15.42M	15.96M	26.21M	38.41M	77.92M
Stockholders Equity	60.08M	60.97M	50.54M	61.87M	88.00M	-14.97M
Cash Flow
Free Cash Flow	-33.19M	-33.53M	-21.55M	-38.83M	-5.77M	-28.36M
Operating Cash Flow	-33.19M	-32.83M	-21.13M	-38.82M	-5.24M	-28.34M
Investing Cash Flow	-319.00K	-699.00K	-419.00K	1.50M	-421.00K	1.50M
Financing Cash Flow	46.57M	46.15M	7.97M	-784.00K	77.65M	34.74M

Mereo Biopharma Group Plc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.87
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MREO, the sentiment is Positive. The current price of 2.87 is above the 20-day moving average (MA) of 2.74, above the 50-day MA of 2.54, and below the 200-day MA of 3.12, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 61.43 is Neutral, neither overbought nor oversold. The STOCH value of 68.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MREO.

Mereo Biopharma Group Plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	64 Neutral	¥342.56B	10.47	-2.86%	2.57%	11.81%	-7.17%
HRTX	61 Neutral	$335.64M	―	40.36%	―	12.43%	91.67%
RGNX	52 Neutral	$440.40M	―	-47.44%	―	80.70%	46.66%
RNAC	52 Neutral	$290.95M	―	-938.38%	―	38.82%	-645.78%
VERV	52 Neutral	$1.01B	―	-34.26%	―	271.44%	26.65%
IVA	45 Neutral	$434.63M	―	344.74%	―	-47.32%	-26.67%
MREO	43 Neutral	$456.33M	―	-92.00%	―	―	―

Mereo Biopharma Group Plc Corporate Events

Mereo Biopharma Advances with Key Clinical Updates

Mereo BioPharma has announced updates on its lead clinical programs, including the ongoing Phase 3 study of setrusumab for osteogenesis imperfecta and the positive EMA opinion on alvelestat for alpha-1 antitrypsin deficiency-associated lung disease. The company is confident in the potential of setrusumab to become the standard-of-care and is prepared for key milestones through 2027, leveraging its cash runway and strategic partnerships. The Orphan Designation for alvelestat is a significant step towards its commercialization in Europe, promising benefits for patients with rare conditions.