First Day of Dealings on AIM

9 June 2016

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Mereo BioPharma Group plc

("Mereo" or the "Company")

First Day of Dealings on AIM

Mereo, a UK-based specialty biopharmaceutical company, announces that its Ordinary Shares were admitted to trading on the AIM market of the London Stock Exchange at 8.00am GMT today. This follows a successful capital raise with total gross proceeds of £14.8 million. On admission the Company will have a market capitalisation of approximately £142 million.

Trading of the Ordinary Shares will take place under the ticker symbol "MPH" with ISIN GB00BZ4G2K23.

RBC Capital Markets is acting as Global Coordinator, Private Placement Agent and Broker to the Company and Cantor Fitzgerald Europe is acting as Nominated Adviser, Private Placement Agent and Broker. Evercore is acting as Financial Adviser to the Company.

Enquiries:

About Mereo

Mereo is a UK-based specialty biopharmaceutical company focused on the development of innovative medicines that aim to address unmet medical needs in rare and specialty disease areas and improve patient quality of life.

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's initial mid-late stage portfolio consists of three exceptionally well characterised novel products for the treatment of diseases with considerable unmet medical need, which it acquired from Novartis Pharmaceuticals in July 2015. Each of these programmes has a comprehensive dataset for both pre-clinical and proof-of-concept clinical studies. Since that time the Company has initiated a Phase 2 study and a Phase 2b study in relation to two of the product candidates in 2016 and intends to commence registration studies during H2 2016 for the third product candidate. 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.

Disclaimers

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any State of the United States and the District of Columbia). This announcement is not an offer of or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

In any EEA Member State that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive, and such other persons as this document may be addressed on legal grounds, and no person that is not a relevant person or qualified investor may act or rely on this document or any of its contents.. The expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU to the extent implemented in any relevant Member State) and includes any relevant implementing measure in the relevant Member State.