• Mereo BioPharma Group recently reported that its Phase 3 Orbit and Cosmic trials of setrusumab in osteogenesis imperfecta missed their primary fracture reduction endpoints but achieved strong statistical improvements in bone mineral density, while also updating investors that its approximately US$41,000,000 cash balance at 31 December 2025 is expected to fund operations to mid-2027.
• Alongside reassessing the future of setrusumab with partner Ultragenyx, Mereo is pushing ahead with a single global Phase 3 trial for alvelestat in alpha-1 antitrypsin deficiency-associated lung disease and has out-licensed vantictumab for autosomal dominant osteopetrosis Type 2, highlighting a pipeline that is evolving across different rare disease indications.
• We’ll now examine how the mixed setrusumab Phase 3 results, particularly the statistically significant bone mineral density gains, shape Mereo’s investment narrative.

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What Is Mereo BioPharma Group's Investment Narrative?

To own Mereo today, you have to believe that its rare‑disease pipeline can still create meaningful value despite setbacks, and that management can stretch a relatively modest balance sheet. The mixed Phase 3 readout for setrusumab is central here: missing the primary fracture endpoints clearly weakens one of the key short term catalysts and helps explain the sharp share price reset, but the statistically strong bone mineral density gains keep a potential regulatory or partnership path on the table, rather than closing the book. That shifts near term focus toward data deep‑dives, regulator feedback and Ultragenyx’s stance, while elevating alvelestat’s planned single global Phase 3 trial as the next major value inflection point. At the same time, Mereo’s cash runway to mid‑2027 reduces immediate dilution risk but does not remove it.

Yet there is one funding and execution risk here that current shareholders cannot ignore.

Our valuation report here indicates Mereo BioPharma Group may be overvalued.

Exploring Other Perspectives

Seven Simply Wall St Community fair value estimates span roughly US$1.22 to US$12.17 per share, underlining how far apart individual views sit. Against that backdrop, the mixed setrusumab data and reliance on future trial success place a lot of weight on how you judge Mereo’s clinical risk and funding options.

Explore 7 other fair value estimates on Mereo BioPharma Group - why the stock might be a potential multi-bagger!

Build Your Own Mereo BioPharma Group Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Mereo BioPharma Group research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Mereo BioPharma Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Mereo BioPharma Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.