Mereo: Positive Top-Line Results for BGS-649

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Mereo BioPharma Group plc

("Mereo" or the "Company" or the "Group")

Mereo BioPharma Announces Positive Top-Line Results from Phase 2b Study of BGS-649 for the Treatment of Hypogonadotropic Hypogonadism in Obese Men

Primary endpoint achieved; BGS-649 normalized testosterone in over 75% of patients across all three dose regimens with clear dose response

London, 19 March 2018- Mereo BioPharma Group plc (AIM: MPH), a multi-asset biopharmaceutical company focused on the acquisition, development and commercialization of innovative therapeutics that aim to improve outcomes for patients with rare and specialty diseases, today announced positive top-line results from a Phase 2b dose-ranging study with BGS-649 for the treatment of hypogonadotropic hypogonadism (HH) in men with a body mass index of over 30. BGS-649 is a once weekly oral aromatase inhibitor designed to restore a patient's own testosterone to normal levels by inhibiting the conversion of testosterone to oestradiol.

The study met its primary endpoint, normalizing total testosterone levels in over 75% of subjects after 24 weeks of treatment (p

Dr. Denise Scots-Knight, Chief Executive Officer of Mereo commented:

"We are delighted with the results from the primary and secondary endpoints of this study which we believe further demonstrate the potential of BGS-649 to become an important new and convenient treatment option for the more than 12 million obese men in the US and EU suffering from HH. We are particularly encouraged by the ability of BGS-649 to improve LH and FSH levels, one of the major limitations of current therapies.

"We look forward to the results from the BGS-649 six-month safety extension study expected in the fourth quarter of 2018. These will be combined with further detailed analysis of the current data to further inform our understanding of the exploratory PROs and how to most appropriately incorporate them into our developing clinical strategy for BGS-649 going forward."

Trial Results Highlights

· Primary Endpoint

o All three doses normalized testosterone in 75% of subjects at 24 weeks (p

o Normalization of testosterone observed at first time point after initial dosing of day 8 in >80% of subjects at all three doses (p

o Dose response observed with respect to absolute testosterone levels and response time.

· Secondary Endpoints

o No subjects on BGS-649 with testosterone levels >1500 ng/dl at any time during the study.

o Statistically significant increase in LH at all three doses at week 24 (p

o Statistically significant increase in FSH at all three doses at week 24 (

o The two highest doses normalized testosterone in 90% of subjects at 24 weeks with the lowest dose normalising testosterone in 88% of subjects at 24 weeks.

· Exploratory Endpoints

o Improvement in total motile sperm count across all three doses versus placebo (mean changes at 20 weeks of 70 million, 14 million, and 58 million for high, medium and low doses, respectively, compared with a decrease of 23 million for placebo) with statistical significance attained with the high dose although the trial was not powered to detect statistical significance for this endpoint (p=0.03).

o A positive trend of treatment effect was observed on reduction of fatigue in the exploratory patient reported outcomes (PROs) of the PROMIS short fatigue score at 8-12 weeks treatment. The trial was not powered to detect statistical significance for this endpoint.

· Safety

o BGS-649 was reported to be safe and well tolerated during the study.

o An increased incidence of elevated haematocrit levels was noted in the treatment arms of the study, which is consistent with increasing testosterone levels

About the Phase 2b Study

The Phase 2b dose-confirmation study, which commenced in 2016, was a randomized, double-blind, placebo-controlled clinical trial assessing three different dosing regimens of BGS-649 in 271 obese men with HH. Following baseline assessment, patients were randomized to receive one of three weekly doses of BGS-649 or placebo for 24 weeks. The primary endpoint was normalization of total testosterone levels in greater than 75% of subjects after 24 weeks of treatment. Secondary measures included determining the impact of BGS-649 on the levels of testosterone LH and FSH, as well as normalization of total testosterone in greater than 90% of the subjects after 24 weeks of treatment. Exploratory end points included semen parameters and patient reported outcomes (PROs). At the end of the initial 24-week treatment period, patients had the option to enrol into a six-month safety extension study in which they will receive the same dose or in the case of placebo patients, they will be randomized to one of the three doses. Patients will continue to be monitored for LH and (FSH) levels and bone mineral density. The Phase 2b safety extension study has fully enrolled 143 patients and results are expected in Q4 2018.

About Hypogonadotropic Hypogonadism

Hypogonadotropic hypogonadism results from inadequate levels of testosterone. Symptoms associated with testosterone deficiency include reduced/loss of libido, erectile dysfunction, tiredness, fatigue, impaired physical endurance, loss of vitality, lack of motivation and mood disturbance. There are approximately seven million cases of HH in obese men in the US and approximately five million cases in Europe. Current therapies for HH involve direct replacement of testosterone administered by gel formulations applied to the skin, which risk transference to anyone in close contact, patches or intramuscular injections, which can be painful and inconvenient. Direct exogenous testosterone replacement can also impair male fertility by suppressing LH and FSH.

About BGS-649

BGS-649 is a once a week oral treatment for HH in obese men, that restores a patient's own testosterone. It is a novel aromatase inhibitor that inhibits conversion of the patients' own testosterone to oestradiol, thereby increasing testosterone levels. BGS-649 is designed to be more convenient compared with current therapies and due to its mechanism of action restores normal testosterone production without the risk of supra-physiological levels or suppression of LH and FSH, thereby treating the symptoms of HH whilst maintaining or improving testicular function.

About Mereo

Mereo is a multi-asset biopharmaceutical company focused on the acquisition, development and commercialization of innovative therapeutics that aim to improve outcomes for patients with rare and specialty diseases. The portfolio consists of four clinical-stage product candidates, each of which were acquired from large pharmaceutical companies: BPS-804 for the treatment of osteogenesis imperfecta; AZD-9668 for the treatment of severe alpha-1 antitrypsin deficiency; BCT-197 for the treatment of acute exacerbations of chronic obstructive pulmonary disease, or AECOPD; and BGS-649 for the treatment of hypogonadotropic hypogonadism in obese men. Each of the Company's product candidates has generated positive clinical data for Mereo's target indication or in a related indication. The Company's strategy is to selectively acquire product candidates that have already received significant investment from pharmaceutical companies and that have substantial preclinical, clinical and manufacturing data packages. Since inception the Company has commenced large, randomized, placebo-controlled Phase 2 clinical trials for three of the product candidates and announced positive top-line results from its Phase 2 clinical trial of BCT-197 as an acute therapy for patients with AECOPD in December 2017. The Company intends to commence additional late-stage clinical trials in 2018.

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