Mereo BioPharma

Oncologie takes global licence to Navi

Lighthouse | 13 January 2020

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  • Mereo Biophama has entered into an exclusive global licence agreement with Oncologie Inc, for the development and commercialisation of its anti-DLL4/VEGF bispecific antibody, navicixizumab.
  • Under the terms of the licence, Mereo BioPharma will receive a $4m upfront payment, and an additional $2m payment conditional on a CMC (chemistry, manufacturing and controls) milestone. Mereo will also be eligible to receive up to $300m in future clinical, regulatory and commercial milestones; tiered royalties (mid-single-digit to sub-teen) on global annual net sales; and a negotiated percentage of sub-licensing revenue from certain sublicencees.
  • Oncologie will be responsible for all future research, development and commercialisation of navicixizumab. It closed an $80m Series B in June 2019, and has a current clinical development pipeline of three assets: lefitolimod (partnered with Mologen), bavituximab and varisacumab.
  • Navicixizumab is under evaluation in a 44-pt Phase Ib study in combination with paclitaxel in patients with advanced heavily pre-treated ovarian cancer. The study is fully enrolled, and the Q119 interim analysis indicated an unconfirmed response rate of 41% and 7.3 months median PFS.
  • Following a Type B End of Phase I meeting (July 2019), the FDA agreed in principle the design of a Phase II study that could potentially support accelerated approval in high grade ovarian, primary peritoneal or fallopian tube cancer in patients who have received at least three prior therapies and/or prior bevacizumab. In October 2019, the FDA granted Fast Track designation for this indication.
  • Navicixizumab was acquired by Mereo BioPharma through its 2019 merger with OncoMed and is the subject of a CVR (contingent value right) with former OncoMed shareholders. If a milestone occurs prior to the fifth anniversary of the closing of the Mereo/OncoMed merger (ie April 2024), CVR holders are entitled to receive, in cash, 70% of the aggregate amount received by Mereo BioPharma (net of agreed costs), subject to a cash consideration cap of $79.7m.

Trinity Delta view: This global licencing deal with Oncologie for naviciximab is important on a number of fronts: it underlines management’s ability to strike deals, provides a small fillip to the existing cash runway (currently into mid-2020), and retains economic upside potential from a non-core asset. Mereo BioPharma’s focus remains on the development of its innovative rare disease portfolio of four key assets. These include the lead programme setrusumab for osteogenesis imperfect, which is on track to initiate a pivotal Phase IIb/III paediatric study in Europe this year; an FDA meeting in early 2020 should help define the US approval pathway.

We currently value Mereo BioPharma at £442m ($574m), equivalent to 412p/share or $20.60/ADS (fully diluted).


13 January 2020

Price (UK share)
Market Cap£32.3m
ExchangesAIM London
Company CodeMPH.L
Corporate clientYes

Company description

Mereo BioPharma develops and commercialises innovative therapeutics addressing rare and specialty diseases. These are acquired or licensed in at clinical stages from large pharmaceutical companies. The portfolio consists of four compounds that are progressing through late clinical development.


Mick Cooper
+44 (0) 20 3637 5042

Lala Gregorek
+44 (0) 20 3637 5043


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