Grant of Options and Awards

Mereo BioPharma Group plc

("Mereo" or the "Company")

Grant of Options and Awards

London, 5 April 2017 - Mereo BioPharma Group plc (AIM: MPH), a UK-based specialty biopharmaceutical company, today announces that it has granted Options and Awards over a total of 1,356,318 ordinary shares of £0.003 each in the capital of the Company ("Ordinary Shares") on 4 April 2017 to certain employees including persons discharging managerial responsibility ("PDMRs"), as set out below:

These Options and Awards form the respective PDMRs' long-term incentive component of their remuneration for the 2017 financial year.

Awards granted under the Deferred Bonus Share Plan ("DBSP")

Awards granted to PDMRs under the DBSP will normally vest on the third anniversary of the date of grant, after which they will normally be exercisable for a period of one year.

Award granted under the Long Term Incentive Plan ("LTIP")

The Award granted to the PDMR under the LTIP is subject to the PDMR continuing to hold employment with the Company and is subject to the satisfaction of the following performance conditions:

1. 75% of the Award will be subject to a number of share price growth targets, measured over three to five years; and

2. 25% of the Award will be subject to strategic targets, measured over five years.

The Award will vest to the extent the performance conditions have been satisfied, after which they will normally be exercisable for a period of one year.

Award granted under the Share Option Scheme ("SOS")

The Option granted to the PDMR under the SOS has an exercise price of 302.50 pence. The Award is subject to the PDMR continuing to hold employment with the Company and will vest on the third anniversary of the date of grant, after which it will normally be exercisable until the tenth anniversary of the date of grant. 

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About Mereo

Mereo is a UK-based 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. The Company seeks to selectively acquire development-stage product candidates with demonstrated clinically meaningful data from large pharmaceutical companies and to rapidly progress these product candidates to subsequent value inflection points.

Mereo combines the operational discipline and efficiency of a small company with the financial resources to conduct comprehensive clinical studies. The Company has the option to directly commercialise products, for example in orphan diseases, in addition to partnering or divesting its products.

Mereo's initial portfolio consists of three mid-late stage clinical assets that were acquired from Novartis in July 2015. BPS-804 is being developed for the prevention of fractures resulting from osteogenesis imperfecta (brittle bone disease); acumapimod (BCT-197), is being developed to treat inflammation in patients with an AECOPD; and BGS-649 is a once-weekly pill to restore normal testosterone levels in men with hypogonadotropic hypogonadism.

In H1 2016 the Company initiated a Phase 2 study with acumapimod and a Phase 2b study with BGS-649. Mereo expects to commence the first pivotal trial for BPS-804 during H1 2017. Additional product opportunities, from a range of large pharmaceutical and biotechnology companies, are under active evaluation.