Mereo BioPharma, a London biotech developing a pipeline of assets it snagged from Big Pharma shelves, has yanked its IPO application to go public in the US, citing “challenging market conditions.”
Just weeks ago, the company rolled out plans to raise $81 million by listing on the Nasdaq. The company, which is already listed on the London Stock Exchange, planned to use the extra cash to develop at least three drug candidates through mid-stage trials. In an SEC statement signaling the stock offering, Mereo said the money would fuel two programs it picked up from Novartis and one it got from AstraZeneca.
Without the infusion of cash, it’s unclear if Mereo will be able to tackle its original plans to move deeper into the clinic. The company had planned for the IPO proceeds to get BPS-804 (setrusumab), an ex-Novartis rare disease drug for patients with osteogenesis imperfecta, into Phase IIb/III trials in 2018. The cash would also go toward the late-stage advancement of ex-Novartis drug BGS-649 for the treatment of hypogonadotropic hypogonadism in obese men. The company also wanted to get AZD-9668, a respiratory disease asset Mereo out-licensed from AstraZeneca last fall, through proof-of-concept trials.
For its part, Mereo said the company remains well-funded, with a net cash, short-term deposits and short-term investment balance of $73 million at December 31, 2017.
“We received positive feedback and strong levels of institutional interest during the offering process. However, challenging stock market conditions have led our Board to take the decision to withdraw our global offering and postpone our proposed listing of (American Depositary Shares) on Nasdaq in the interests of our existing shareholders,” said CEO Denise Scots-Knight in a statement.
Calling the stock market conditions “challenging” may raise a few eyebrows, considering the epic success of several biotechs that have gone public in recent months. Just days ago, Endpoints covered two knockout IPO offerings — MorphoSys and Surface Oncology — which hauled a combined $316 million in upsized deals.
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