Mereo BioPharma has raised £14.8 million ($21.6 million) and listed its stock on the AIM exchange in London. The listing and injection of capital come nearly 12 months after Mereo first emerged with £76.5 million in investment from Neil Woodford’s fund and Invesco Perpetual, plus a pipeline of three midphase candidates from Novartis ($NVS).
Back then, Novartis signaled its intention to make a cash investment in Mereo at some time in the future, a commitment it has now followed through on with a £3.5 million convertible loan. Mereo has raised a further £11.4 million through a private placement of shares at £2.21 a piece. The money is earmarked for the advance of the pipeline of programs Mereo picked up from Novartis, the most advanced of which is set to start a registration study later this year.
By handing over responsibility for the drugs to Mereo and taking a stake in the company, Novartis has shifted the programs off its balance sheet while retaining the ability to profit from their success. For Mereo, the deal with Novartis is the first step in an attempt to build a fully fledged specialty pharma company, an initiative that could gather pace now that it has successfully listed its stock on London’s AIM.
“We are very excited to be joining AIM, allowing the company to take the next logical step towards realising our vision of becoming a leading speciality biopharma company,” Mereo CEO Denise Scots-Knight said in a statement. “Our strategy is to build, over time, a diverse portfolio, and having publicly-traded shares, will provide additional flexibility to secure the next product candidates which are likely to be primarily sourced from large pharmaceutical companies.”
The timing of the listing fits with the stated goal of acquiring additional assets. When Mereo struck the agreement with Novartis for the three assets, it agreed to work exclusively on the programs it picked up from the Swiss pharma for 12 months. Given that Mereo was unveiled to the world late in July of last year, the time for dealmaking could be drawing close. Talking to FierceBiotech last year, Scots-Knight said the long-term goal is to have up to 7 assets on the go.
- read the statement