# Mereo BioPharma Group plc: Form 10-Q for the period ended Jun 30, 2025

- Company: [Mereo BioPharma Group plc](/companies/mreo.md) (CIK 1719714)
- Form: 10-Q
- Filed: 2025-08-12
- Accepted by EDGAR: Aug 12, 2025, 07:55 ET
- Period: 2025-06-30
- Accession: 0001193125-25-178489
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1719714/000119312525178489/mreo-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1719714/000119312525178489/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $500.0k | us-gaap:Revenues |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $500.0k | us-gaap:Revenues |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $5.4m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2025-01-01 to 2025-06-30 | $9.3m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$10.5m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$21.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $24.0k | us-gaap:InterestExpense |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $204.0k | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$14.6m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$27.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.02 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.03 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.02 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.03 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 799,435,329 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 794,022,295 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$16.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $20.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-06-30 | $56.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $61.4m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $62.6m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $7.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $8.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $54.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 32,421 characters.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024, included in our 2024 Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of our 2024 Annual Report, our actual results could differ materially from the results described in, or implied by, these forward-looking statements.*

### Overview

We are a biopharmaceutical company focused on the development of innovative therapeutics for rare diseases. We have developed a portfolio of late-stage clinical product candidates. Our two rare disease product candidates are setrusumab for the treatment of OI and alvelestat for the treatment of severe alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD). Setrusumab has received orphan designation for OI from the European Commission ("EC") and the U.S. Food and Drug Administration ("FDA"), PRIME designation from the European Medicines Agency ("EMA") and has Breakthrough Therapy designation and rare pediatric disease designation from the FDA. Alvelestat has received orphan designation for AATD from the EC and the FDA, and Fast Track designation for the treatment of AATD-LD from the FDA.

Our strategy is to selectively acquire and develop product candidates for rare diseases that have already received significant investment from large pharmaceutical and biotechnology companies and that have substantial pre-clinical, clinical and manufacturing data packages. Since our formation in March 2015, we have successfully executed on this strategy by acquiring six clinical-stage product candidates of which four were in rare diseases and oncology. Four of our six clinical-stage product candidates were acquired from large pharmaceutical companies and two were acquired in our merger with OncoMed Pharmaceuticals Inc in 2019. We have successfully completed large, randomized Phase 2 clinical trials for four of our product candidates and the Phase 1b portion of a Phase 1b/2 for a fifth product candidate.

Rare diseases represent an attractive development and, in some cases, commercialization opportunity for us since they typically have high unmet medical need and can utilize regulatory pathways that facilitate acceleration to approval and to the potential market. Development of products for rare diseases involves close collaboration with key opinion leaders and investigators, and close coordination with patient organizations. Rare disease patients are typically treated at a limited number of specialized sites which helps identification of the patient population and enables a small, targeted sales infrastructure to commercialize the products in key markets.

### Recent Developments

On July 9, 2025, we and our collaboration partner Ultragenyx announced that the randomized, placebo-controlled Phase 3 portion of the Orbit study evaluating setrusumab in pediatric and young adult patients with OI is progressing toward a final analysis consistent with the original plan, around the end of 2025. The Data Monitoring Committee met and informed Ultragenyx that setrusumab demonstrates an acceptable safety profile and Ultragenyx and the Company should continue the study to final analysis. In addition, the Cosmic study evaluating setrusumab in young pediatric patients aged 2 to \<7 years old will also proceed to final analysis around the end of 2025.

### Results of Operations

### Comparison of three months ended June 30, 2025 and 2024

The following table sets forth Mereo’s results of operations for the three months ended June 30, 2025 and 2024.

|  | Three months ended June 30, 2025 ($'000) | 2024 ($'000) | Change ($'000) |
| --- | ---: | ---: | ---: |
| **Revenue** | $500 | $— | 500 |
| **Operating expenses** |  |  |  |
| Cost of revenue | (132) | — | (132) |
| Research and development | (5,373) | (4,946) | (427) |
| General and administrative | (5,494) | (7,868) | 2,374 |
| **Loss from operations** | (10,499) | (12,814) | 2,315 |
| **Other income/(expenses)** |  |  |  |
| Interest income | 589 | 559 | 30 |
| Interest expense | (24) | (331) | (307) |
| Changes in the fair value of warrants | (101) | (69) | (32) |
| Foreign currency transaction (loss)/gain, net | (5,326) | 31 | (5,357) |
| Benefit from research and development tax credit | 745 | 369 | 376 |
| **Net loss before income tax** | (14,616) | (12,255) | (2,975) |
| Income tax benefit | — | — | — |
| Net loss | $(14,616) | $(12,255) | (2,975) |
| Other comprehensive income – Foreign currency translation adjustments, net of tax | 6,647 | 5 | 6,642 |
| **Total comprehensive loss** | $(7,969) | $(12,250) | 3,667 |

#### Revenue

Revenue of $0.5 million for the three months ended June 30, 2025 comprised a one-time milestone payment of $0.5 million resulting from the achievement of a clinical milestone on leflutrozole by ReproNovo pursuant to the ReproNovo Licensing Agreement. No revenue was recognized for the three months ended June 30, 2024.

#### Cost of revenue

Cost of revenue for the three months ended June 30, 2025 was $0.1 million and represents amounts payable pursuant to the 2015 asset purchase agreement with Novartis for leflutrozole, under which the Company pays a percentage of proceeds resulting from milestone revenue received, subject to certain deductions and other amounts. No cost of revenue was recognized for the three months ended June 30, 2024.

#### Research and development (“R&D”) expenses

The following table sets forth our R&D expenses by product development program for the three months ended June 30, 2025 and 2024.

|  | Three months ended June 30, 2025 ($'000) | 2024 ($'000) | Change ($'000) |
| --- | ---: | ---: | ---: |
| Setrusumab (BPS-804/UX143) | $3,687 | $1,448 | 2,239 |
| Alvelestat (MPH-966) | 1,396 | 2,902 | (1,506) |
| Etigilimab (MPH-313) | 224 | 468 | (244) |
| Other | 66 | 128 | (62) |
| Total R&D expenses | $5,373 | $4,946 | 427 |

19

Total R&D expenses increased by $0.4 million, from $4.9 million in the three months ended June 30, 2024 to $5.4 million in the three months ended June 30, 2025.

The increase was primarily due to increases of $2.2 million in R&D expenses for setrusumab offset by decreases of $1.5 million and $0.2 million in R&D expenses for alvelestat and etigilimab, respectively.

The increase in program expenses for setrusumab was primarily driven by amounts due under the manufacturing and supply agreement with our partner, Ultragenyx, as well as ongoing activities related to real-world evidence programs and medical affairs activities in Europe. This is in addition to costs we incur in relation to our collaboration with Ultragenyx, who fund the global development of the program, including input into development, regulatory and manufacturing plans.

The decrease in program expenses for alvelestat was primarily due to the completion of the drug formulation and manufacturing activities undertaken in preparation for the Phase 3 study in the three months ended June 30, 2024.

#### General and administrative expenses

General and administrative expenses decreased by $2.4 million, from $7.9 million in the three months ended June 30, 2024 to $5.5 million in the three months ended June 30, 2025. The decrease was primarily due to the recognition of a $1.9 million reduction in expenses in the three months ended June 30, 2025 for amounts received from our depository to reimburse certain expenses incurred by us in respect of our ADR program as well as lower professional fees.

General and administrative expenses also includes $1.2 million in the three months ended June 30, 2025 of pre-commercial activities to lay the foundation for the commercial launch of setrusumab in Europe, including those to support pricing and reimbursement by HTA authorities and payor decision-makers in Europe.

#### Interest income and expense

Interest income increased by less than $0.1 million, from $0.6 million in the three months ended June 30, 2024 to $0.6 million in the three months ended June 30, 2025, principally due to a higher cash and cash equivalents balance as a result of receiving the net proceeds of $46.2 million from the underwritten registered direct offering in June 2024, offset by lower interest rates earned.

Interest expense decreased by $0.3 million, from $0.3 million in the three months ended June 30, 2024 to less than $0.1 million in the three months ended June 30, 2025. The decrease was principally due to the conversion of convertible loan notes in February 2025, following which the Company had no significant remaining interest-bearing liabilities.

#### Changes in the fair value of warrants

The total change in fair value of warrants in the three months ended June 30, 2025 was an unrealized loss of $0.1 million, compared to an unrealized loss of $0.1 million in the three months ended June 30, 2024, both of which were primarily due to the impact of decreases in the price of the Company’s ADSs on the value of the warrant liabilities.

#### Foreign currency transaction (loss)/gain

The net foreign exchange loss for the three months ended June 30, 2025 was $5.3 million, compared to a gain of less than $0.1 million for the three months ended June 30, 2024. This change primarily reflects (i) the impact of a weakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the three months ended June 30, 2025, compared to a strengthening of U.S. dollars in the three months ended June 30, 2024, and (ii) higher U.S. dollar balances following the underwritten registered direct offering in June 2024.

#### Benefit from research and development tax credit

The benefit from research and development tax credit increased by $0.4 million, from $0.4 million in the three months ended June 30, 2024 to $0.7 million in the three months ended June 30, 2025. This increase reflects a higher level of qualifying expenditure in the three months ended June 30, 2025. The income tax benefit represents eligible cash rebates paid or receivable from the tax authorities in the jurisdictions within which we operate for eligible types of research and development activities and associated expenditure.

*Other comprehensive income – Foreign currency translation adjustments*

The foreign currency translation adjustment for the three months ended June 30, 2025 was a gain of $6.6 million, compared to a gain of less than $0.1 million in the three months ended June 30, 2024. This change primarily reflects the impact of a greater weakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the three months ended June 30, 2025, compared to a lesser weakening of U.S. dollars in the three months ended June 30, 2024 .

### Comparison of six months ended June 30, 2025 and 2024

The following table sets forth Mereo’s results of operations for the six months ended June 30, 2025 and 2024.

|  | Six months ended June 30, 2025 ($'000) | 2024 ($'000) | Change ($'000) |
| --- | ---: | ---: | ---: |
| **Revenue** | $500 | $— | 500 |
| **Operating expenses** |  |  |  |
| Cost of revenue | (132) | — | (132) |
| Research and development | (9,303) | (8,939) | (364) |
| General and administrative | (12,766) | (13,777) | 1,011 |
| **Loss from operations** | (21,701) | (22,716) | 1,015 |
| **Other income/(expenses)** |  |  |  |
| Interest income | 1,248 | 1,175 | 73 |
| Interest expense | (204) | (641) | 437 |
| Changes in the fair value of warrants | 315 | (517) | 832 |
| Foreign currency transaction (loss)/gain, net | (8,091) | 644 | (8,735) |
| Benefit from research and development tax credit | 930 | 847 | 83 |
| **Net loss before income tax** | (27,503) | (21,208) | (6,295) |
| Income tax benefit | — | — | — |
| Net loss | $(27,503) | $(21,208) | (6,295) |
| Other comprehensive income/(loss) – Foreign currency translation adjustments, net of tax | 10,206 | (793) | 10,999 |
| **Total comprehensive loss** | $(17,297) | $(22,001) | 4,704 |

#### Revenue

Revenue of $0.5 million for the six months ended June 30, 2025 comprised a one-time milestone payment of $0.5 million resulting from the achievement of a clinical milestone on leflutrozole by ReproNovo pursuant to the ReproNovo Licensing Agreement. No revenue was recognized for the six months ended June 30, 2024.

#### Cost of revenue

Cost of revenue for the six months ended June 30, 2025 was $0.1 million and represents amounts payable pursuant to the 2015 asset purchase agreement with Novartis for leflutrozole, under which the Company pays a percentage of proceeds resulting from milestone revenue received, subject to certain deductions and other amounts. No cost of revenue was recognized for the six months ended June 30, 2024.

#### Research and development (“R&D”) expenses

The following table sets forth our R&D expenses by product development program for the six months ended June 30, 2025 and 2024.

|  | Six months ended June 30, 2025 ($'000) | 2024 ($'000) | Change ($'000) |
| --- | ---: | ---: | ---: |
| Setrusumab (BPS-804/UX143) | $5,930 | $2,357 | 3,573 |
| Alvelestat (MPH-966) | 2,761 | 5,515 | (2,754) |
| Etigilimab (MPH-313) | 431 | 818 | (387) |
| Other | 181 | 249 | (68) |
| Total R&D expenses | $9,303 | $8,939 | 364 |

Total R&D expenses increased by $0.4 million, from $8.9 million in the six months ended June 30, 2024 to $9.3 million in the six months ended June 30, 2025.

The increase was primarily due to an increase of $3.6 million in R&D expenses for setrusumab, offset by decreases of $2.8 million and $0.4 million in R&D expenses for alvelestat and etigilimab, respectively.

The increase in program expenses for setrusumab was primarily driven by amounts due under the manufacturing and supply agreement with our partner, Ultragenyx, as well as ongoing activities related to real-world evidence programs and medical affairs activities in Europe. This is in addition to costs we incur in relation to our collaboration with Ultragenyx, who fund the global development of the program, including input into development, regulatory and manufacturing plans.

The decrease in program expenses for alvelestat was primarily due to the completion of the drug formulation and manufacturing activities undertaken in preparation for the Phase 3 study in the six months ended June 30, 2024.

#### General and administrative expenses

General and administrative expenses decreased by $1.0 million, from $13.8 million in the six months ended June 30, 2024 to $12.8 million in the six months ended June 30, 2025. The decrease was primarily due to lower professional fees.

General and administrative expenses also includes $2.3 million in the six months ended June 30, 2025 of pre-commercial activities to lay the foundation for the commercial launch of setrusumab in Europe, including those to support pricing and reimbursement by HTA authorities and payor decision-makers in Europe.

#### Interest income and expense

Interest income increased by $0.1 million, from $1.2 million in the six months ended June 30, 2024 to $1.2 million in the six months ended June 30, 2025, principally due to a higher cash and cash equivalents balance as a result of receiving the net proceeds of $46.2 million from the underwritten registered direct offering in June 2024, offset by lower interest rates earned.

Interest expense decreased by $0.4 million, from $0.6 million in the six months ended June 30, 2024 to $0.2 million in the six months ended June 30, 2025. The decrease was principally due to the conversion of convertible loan notes in February 2025, following which the Company had no significant remaining interest-bearing liabilities.

#### Changes in the fair value of warrants

The total change in fair value of warrants in the six months ended June 30, 2025 was an unrealized gain of $0.3 million, compared to an unrealized loss of $0.5 million in the six months ended June 30, 2024. The unrealized gain in the six months ended June 30, 2025 was primarily due to the impact of a decrease in the price of the Company’s ADSs on the value of the warrant liabilities, whereas in the six months ended June 30, 2024, the unrealized loss was primarily due to an increase in the ADS price in the period.

#### Foreign currency transaction (loss)/gain

The net foreign exchange loss for the six months ended June 30, 2025 was $8.1 million, compared to a gain of $0.6 million for the six months ended June 30, 2024. This change primarily reflects (i) the impact of a weakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the six months ended June 30, 2025, compared to a strengthening of U.S. dollars in the six months ended June 30, 2024, and (ii) higher U.S. dollar balances following the underwritten registered direct offering in June 2024.

#### Benefit from research and development tax credit

The benefit from research and development tax credit increased by $0.1 million, from $0.8 million in the six months ended June 30, 2024 to $0.9 million in the six months ended June 30, 2025. This increase reflects a combination of a higher level of qualifying expenditure in the six months ended June 30, 2025. The income tax benefit represents eligible cash rebates paid or receivable from the tax authorities in the jurisdictions within which we operate for eligible types of research and development activities and associated expenditure.

*Other comprehensive income – Foreign currency translation adjustments*

The foreign currency translation adjustment for the six months ended June 30, 2025 was a gain of $10.2 million, compared to a loss of $0.8 million in the six months ended June 30, 2024. This change primarily reflects the impact of a significant weakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the six months ended June 30, 2025, compared to a slight strengthening of U.S. dollars in the six months ended June 30, 2024.

### Liquidity and Capital Resources

### Overview

Under the current business plan and cash flow forecasts, and in consideration of our ongoing research and development efforts and our general corporate funding requirements, we anticipate that our current on-hand cash resources will extend into 2027. However, we will need additional external funding to complete our development plans and potentially commercialize selected rare disease products. We plan to fund our operations through cash on hand and a combination of non-dilutive funding sources, public or private equity or debt financing or other sources.

We do not currently have any approved product candidates and as a result, have not generated any revenue from product sales. As a result, to date, we have financed our operations primarily through the issuances of our equity securities, convertible debt and warrants. These offerings have raised approximately $259.0 million, including through the $50.0 million underwritten registered direct offering in June 2024 and the $12.0 million “at-the-market” offering pursuant to our Open Market Sale Agreement with Jefferies LLC in July 2023 (all amounts are gross proceeds before fees and discounts).

We have also received payments under various license and collaboration agreements, including payments of:

- $50.0 million under the license and collaboration agreement with Ultragenyx for setrusumab in 2021 and a further milestone payment of $9.0 million in July 2023;
- $4.0 million under the license and collaboration agreement with Feng Biosciences (formerly OncXerna) for navicixizumab in 2020 and a further milestone payment of $2.0 million in 2022; and
- $1.0 million under the global license agreement with ReproNovo for leflutrozole in December 2023 and a further milestone payment of $0.5 million in July 2025.

### Contractual Obligations

As further described in our 2024 Annual Report, under “Item 1. Business—Material Agreements—Novartis Agreements” (as updated in Note 16 to the condensed consolidated financial statements included in this Quarterly Report) and “Item 1. Business—Material Agreements—Licensing Agreement with AstraZeneca,” under various agreements with Novartis and AstraZeneca, we have agreed to make milestone payments and pay royalties on potential future commercial sales. The amount, timing, and likelihood of such payments are not known and will remain uncertain for the foreseeable future.

In addition, we enter into contracts in the ordinary course of business with CROs, CMOs, and other vendors, including Ultragenyx for the manufacture of setrusumab as described in our 2024 Annual Report in “Item 1. Business—Material Agreements—Agreements with Ultragenyx for Setrusumab”, to assist in the performance of its research and development activities and other services and products for operating purposes. The contracts with CROs generally provide for termination on notice, and therefore are cancelable contracts. We have manufacturing commitments with CMOs of $0.7 million and $0.5 million as of June 30, 2025 and December 31, 2024, respectively.

### Cash Flows

### Comparison of the six months ended June 30, 2025 and 2024

The table below summarizes our cash flows (used in) from operating, investing and financing activities for the six months ended June 30, 2025 and 2024.

|  | Six Months Ended June 30, 2025 ($'000) | 2024 ($'000) |
| --- | ---: | ---: |
| Net cash used in operating activities | $(15,980) | $(15,895) |
| Net cash used in investing activities | (320) | (699) |
| Net cash provided by financing activities | 288 | 46,781 |
| Effect of exchange rate changes | 2,335 | (177) |
| (Decrease)/increase in cash and cash equivalents | $(13,677) | $30,010 |

#### Operating Activities

Net cash used in operating activities for the six months ended June 30, 2025 was $16.0 million, an increase of $0.1 million from $15.9 million in the six months ended June 30, 2024. This increase is principally due to receipt of $2.0 million from a claim on our Directors and Officers insurance policy to reimburse us for certain legal and professional costs incurred in prior years in the six months ended June 30, 2024 with no similar amounts recognized in the six months ended June 30, 2025. This increase was offset by receipt of $1.1 million in R&D tax credits in the six months ended June 30, 2025 and approximately $0.8 million in lower other net cash operating expense.

#### Investing Activities

Net cash used in investing activities for the six months ended June 30, 2025 was $0.3 million, a decrease of $0.4 million from $0.7 million in the six months ended June 30, 2024. The decrease is principally due to lower payments to acquire intangible assets in the six months ended June 30, 2025.

#### Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2025 was $0.3 million, a decrease of $46.5 million from $46.8 million in the six months ended June 30, 2024. The decrease principally represents the net proceeds of $46.2 million from the underwritten registered direct offering in the six months ended June 30, 2024 with no similar amounts recognized in the six months ended June 30, 2025.

### Operating and Capital Expenditure Requirements

As of June 30, 2025, we had an accumulated deficit of $486.6 million. We expect to continue to report significant operating losses for the foreseeable future as we continue our research and development efforts and seek to obtain regulatory approval of our product candidates and any future products we develop.

We expect to continue to incur expenses in connection with our ongoing development activities related to our product candidates, our outsourced manufacturing activities and other associated costs including the management of our intellectual property portfolio. We also expect to continue to incur costs associated with operating as a U.S. public company listed on Nasdaq and as a domestic registrant.

These costs will increase further if we:

- seek to develop additional product candidates;
- seek regulatory approvals for any of our product candidates that successfully complete clinical trials;
- potentially establish a sales, marketing, and distribution infrastructure and scale-up manufacturing capabilities to commercialize or co-commercialize any product candidates for which we may obtain regulatory approval and chose to commercialize directly;
- expand our intellectual property portfolio;
- add further clinical, scientific, operational, financial, legal and management information systems, and personnel, including personnel to support our development, potential commercialization and to support our operations as a U.S. public company listed on Nasdaq; or
- experience any delays or encounter any issues from any of the above, including but not limited to failed studies, complex results, safety issues, manufacturing issues, or other regulatory challenges.

We expect that our existing cash and cash equivalents will enable us to fund our currently committed clinical trials, operating expenses and capital expenditure requirements into 2027. We have based these estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development of our product candidates and any future product candidates and because the extent to which we may enter into collaborations with third parties for development of any of our product candidates is unknown, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates. Our future capital requirements will depend on many factors, including:

- the costs for our activities related to our ongoing collaboration with Ultragenyx for setrusumab for the treatment of children and adults with OI, including the costs for our preparation for the potential commercialization of setrusumab, if approved, in Europe and the U.K; and potential future costs for the alvelestat program in AATD;
- the costs and timing of manufacturing clinical or commercial supplies of our product candidates;
- the costs, timing, and outcome of regulatory review of our product candidates, including post-marketing studies that could be required by regulatory authorities;
- the costs, timing, and outcome of potential future commercialization activities, including manufacturing, marketing, sales, life cycle management and distribution, for our product candidates that we commercialize directly;
- the timing and amount of revenue, if any, received from commercial sales of our product candidates;
- the costs and timing of preparing, filing, and prosecuting patent applications; maintaining and enforcing our intellectual property rights; and defending any intellectual property-related claims, including any claims by third parties that we are infringing, misappropriating or otherwise violating their intellectual property rights;
- the sales price and availability of adequate third-party coverage and reimbursement for our product candidates;
- the effect of competitors and market developments;
- the performance of our collaborators and partners under the existing agreements on setrusumab, leflutrozole and navicixizumab;
- the extent to which we are able to acquire new product candidates or enter into licensing or collaboration arrangements for our product candidates, although we currently have no commitments or agreements to complete any such transactions;
- milestone payments under the Amended AstraZeneca Agreements; and
- tax liabilities or other assessments and our ability to claim R&D tax credits or other reliefs.

Our revenues, if any, will be derived from development milestones or sales of any product candidates that we are able to successfully develop, receive regulatory approval for, and commercialize in future years. In the meantime, we will need to obtain substantial additional funds to achieve our business objective.

Adequate additional funds may not be available to us on acceptable terms, or at all. If we raised additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

Any future debt financing or preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may require the issuance of warrants, which could potentially dilute your ownership interests.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, shareholders' ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a shareholder. If we are unable to raise additional funds through partnerships, debt or equity financings when needed, we may be required to delay, limit, reduce, or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

### Critical Accounting Estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our accounting estimates based on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The actual impact on our financial performance could differ from these estimates under different assumptions or conditions.

An accounting estimate is considered critical if both (i) the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment involved, and (ii) the impact within a reasonable range of outcomes of the estimates and assumptions is material to our unaudited condensed consolidated financial statements. We believe that there are no estimates and assumptions made in our unaudited condensed consolidated financial statements that rise to this level. Our significant accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our 2024 Annual Report, which was filed with the SEC on March 26, 2025. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected. There have been no significant changes to our critical accounting estimates from those described in our 2024 Annual Report.

### Recent accounting pronouncements

There have been no recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance other than those previously included in the 2024 Annual Report that are of significance or potential significance to the Company. The Company is continuing to evaluate the impact of the recently issued pronouncements that are effective in future periods and were discussed in its 2024 Annual Report.

### Safe Harbor

See the section titled “Information Regarding Forward-Looking Statements” at the beginning of this Quarterly Report.

## Market risk

As filed, 139 characters.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

## Controls and procedures

As filed, 909 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a 15(e) and 15d 15(e)) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”)) as of June 30, 2025.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at June 30, 2025.

### Changes in Internal Control over Financial Reporting.

No changes in our internal control over financial reporting (as defined in Rules 13a-15(e) and 15d – 15(e) under the Exchange Act) occurred during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Filed Aug 12, 2025.
Source: SEC EDGAR, the filing index for accession 0001193125-25-178489. Last ingested by Listed: Oct 24, 2026, 15:15 ET. No prices; not investment advice.