Mereo Biopharma Group Plc (MREO) AI Stock Analysis

• Market Cap: $68.81M
• Dividend Yield: N/A
• Average Volume (3M): 27.55M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.25
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 36
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.01
• Shares Outstanding: 159,131,700
• 10 Day Avg. Volume: 7,791,883
• 30 Day Avg. Volume: 27,554,128
• PEG Ratio: 0.12
• Price to Book (P/B): 8.49
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -15.44
• Enterprise Value/Market Cap: 0.27
• Enterprise Value/Revenue: 37.49
• Enterprise Value/Gross Profit: 196.17
• Enterprise Value/Ebitda: -0.43
• 1Y Price Target: $1.75
• Price Target Upside: 316.67% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 45 Neutral
• Price Target: $0.44 ▲(4.29% Upside)

Overall score is weighed down primarily by weak financial performance (large losses and ongoing cash burn despite a low-leverage balance sheet) and bearish technicals (below major moving averages with negative MACD). Valuation offers limited support due to negative earnings and no provided dividend yield.

Positive Factors

Balance sheet strength

Very low leverage and meaningful equity provide durable financial flexibility for a clinical-stage biotech. This reduces near-term solvency risk, supports continued R&D spend or partnering negotiations, and gives time to restructure programs without immediate distress.

Near-term cash runway and tighter cost controls

A reported cash balance and disclosed runway through mid-2027, combined with announced cost controls, materially extend planning visibility. This allows the company to complete data analyses, advance select programs and pursue partnerships without immediate fundraising pressure.

Partnering and pipeline diversification

An explicit partnering strategy and existing out-license reduce the firm's need to self-fund all late-stage programs. Collaborations can provide non-dilutive milestones, external development expertise and shared commercialization risk, improving long-term prospects despite single-program setbacks.

Negative Factors

Phase 3 trial failures for setrusumab

Missing primary endpoints in two Phase 3 studies is a durable negative: it raises regulatory and commercial uncertainty, forces program pauses and resource reallocation, and can materially reduce the value of the asset absent compelling subgroup or regulatory paths.

High cash burn and negative free cash flow

Sustained negative operating and free cash flow at this magnitude requires external financing or asset monetization. Over a multimonth horizon, persistent burn increases dilution risk, constrains strategic optionality and pressures management to prioritize deals or cuts over growth initiatives.

Tiny, volatile revenue and deep recurring losses

A minimal and volatile revenue base combined with large recurring losses means no internal cash generation from products. This structural revenue weakness sustains dependency on partners or capital markets and limits predictable reinvestment into development or commercialization over the medium term.

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

Financials reflect an early-stage biotech profile: very weak profitability and visibility (TTM revenue ~$0.5M vs. net loss ~$41.5M) and heavy cash burn (TTM operating cash flow about -$32.7M; free cash flow about -$33.0M). The balance sheet is a relative positive with very low leverage (debt-to-equity ~0.01) and meaningful equity (~$46.6M), but ongoing losses and burn increase funding dependence risk.

Income Statement

Profitability is weak in TTM (Trailing-Twelve-Months), with a small revenue base ($0.5M) and deep losses (net loss of ~$41.5M), translating to extremely negative profit margins. Revenue has been volatile over time (including years with zero revenue), and while 2021 showed strong profitability, the business has since reverted to sustained, sizable operating losses—suggesting limited earnings visibility near-term.

Balance Sheet

The balance sheet is a relative strength: leverage is very low in TTM (Trailing-Twelve-Months) (debt-to-equity ~0.01) and equity remains solid (~$46.6M) versus total assets (~$53.6M). That said, returns on equity are sharply negative in recent periods due to ongoing losses, and equity has declined versus prior years—highlighting continued burn risk if losses persist.

Cash Flow

Cash generation remains pressured, with TTM (Trailing-Twelve-Months) operating cash flow of about -$32.7M and free cash flow of about -$33.0M. Free cash flow deterioration versus the prior year (negative growth) underscores ongoing funding dependence. A positive note is that cash burn broadly tracks accounting losses (free cash flow roughly in line with net loss), but the absolute level of outflow remains high relative to the current revenue base.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	500.00K	0.00	10.00M	0.00	49.21M	0.00
Gross Profit	95.54K	0.00	7.43M	257.44K	25.04M	-2.05M
EBITDA	-43.45M	-40.80M	-26.06M	-39.98M	25.49M	-203.41M
Net Income	-41.51M	-43.25M	-29.47M	-42.12M	17.17M	-209.83M
Balance Sheet
Total Assets	53.60M	76.39M	66.50M	77.41M	170.96M	86.08M
Cash, Cash Equivalents and Short-Term Investments	48.70M	69.80M	57.42M	68.18M	127.52M	32.09M
Total Debt	397.00K	6.43M	5.95M	15.37M	22.66M	24.53M
Total Liabilities	7.00M	15.42M	15.96M	26.01M	51.95M	106.55M
Stockholders Equity	46.60M	60.97M	50.54M	51.40M	119.01M	-20.47M
Cash Flow
Free Cash Flow	-33.03M	-33.53M	-21.55M	-48.83M	-7.79M	-38.65M
Operating Cash Flow	-32.71M	-32.83M	-21.13M	-48.82M	-7.07M	-38.62M
Investing Cash Flow	-20.00K	-699.00K	-419.00K	1.99M	-568.20K	2.04M
Financing Cash Flow	248.00K	46.15M	7.97M	200.00K	104.80M	47.34M

Mereo Biopharma Group Plc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MREO, the sentiment is Negative. The current price of 0.42 is below the 20-day moving average (MA) of 0.51, below the 50-day MA of 1.24, and below the 200-day MA of 1.87, indicating a bearish trend. The MACD of -0.21 indicates Negative momentum. The RSI at 29.87 is Positive, neither overbought nor oversold. The STOCH value of 10.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MREO.

Mereo Biopharma Group Plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VNDA	60 Neutral	$457.41M	-5.62	-16.72%	―	11.12%	-406.76%
ABEO	60 Neutral	$280.17M	4.52	75.90%	―	―	―
CAPR	57 Neutral	$1.26B	-13.83	-107.79%	―	-52.08%	-69.35%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
OMER	50 Neutral	$830.95M	-5.86	―	―	―	12.32%
MREO	45 Neutral	$68.81M	-1.60	-69.98%	―	―	―

Mereo Biopharma Group Plc Corporate Events

Mereo BioPharma Issues Corporate Update on Pipeline and Cash

On January 12, 2026, Mereo BioPharma provided a corporate update detailing the status of its rare disease pipeline and financial position. Following Phase 3 Orbit and Cosmic trials in osteogenesis imperfecta that failed to meet primary fracture-reduction endpoints but showed strong gains in bone mineral density and a consistent safety profile, the company has reduced and delayed pre-commercial and manufacturing activities for setrusumab while conducting further data analyses and considering regulatory interactions with partner Ultragenyx. In parallel, Mereo is pushing ahead with partnering talks and key preparations for a single global Phase 3 trial of alvelestat in alpha-1 antitrypsin deficiency-associated lung disease, and highlighted progress on vantictumab, which has been out-licensed to āshibio for autosomal dominant osteopetrosis type 2 with a Phase 2 study planned for the second half of 2026. The company reported approximately $41 million in cash and cash equivalents as of December 31, 2025, and updated its guidance to indicate this balance is expected to fund operations through mid-2027, underscoring tighter cost controls and providing greater visibility for investors as Mereo navigates mixed clinical outcomes and seeks partners to share late-stage development and commercialization risk.

The most recent analyst rating on (MREO) stock is a Hold with a $0.37 price target. To see the full list of analyst forecasts on Mereo Biopharma Group Plc stock, see the MREO Stock Forecast page.

Mereo Biopharma Updates Setrusumab Trials and Cost Controls

On December 29, 2025, Mereo BioPharma reported that its Phase 3 ORBIT and COSMIC trials of setrusumab (UX143) in pediatric and young adult patients with osteogenesis imperfecta did not meet their primary endpoints of statistically significant reduction in annualized clinical fracture rates versus placebo and bisphosphonates, respectively, although both studies showed strongly significant improvements in bone mineral density and no change in the safety profile. The company said it is conducting further analyses of the data, particularly in the higher-risk pediatric population where bone density gains were associated with a non-significant reduction in fractures, and in response to the outcome it is tightening cost controls, immediately reducing pre-commercial and manufacturing activities for setrusumab, and continuing efforts to extract value from its broader rare-disease portfolio, including ongoing partnering discussions for alvelestat.

The most recent analyst rating on (MREO) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Mereo Biopharma Group Plc stock, see the MREO Stock Forecast page.