Trinity Delta Path cleared for partnering of acumapimod (BCT-197)

Path cleared for partnering of acumapimod (BCT-197)

Lighthouse | 16 April 2019

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Mereo BioPharma has had a successful end of Phase II meeting with the US FDA, in which the outline for a pivotal Phase III clinical trial programme for acumapimod for the treatment of acute exacerbations of COPD (AECOPD) was agreed in principle.
The Phase III programme will consist of two randomised, double-blind, placebo controlled studies, in which patients will receive either acumapimod with standard of care (SOC) or placebo with SOC. It is estimated that each trial will enrol c800 patients.
The primary endpoint of the trial will be time to next severe exacerbation/rate of severe exacerbations, with secondary endpoints including reduction in systemic corticosteroid exposure, all cause hospitalisation, symptoms measured by St Georges Health Questionnaire, as well as safety and tolerability.
Patients will have the option for re-treatment of severe exacerbations at any point after the first 14 days following initial dosing, and will have a 12-month follow-up period.
Acumapimod is a small molecule inhibitor of p38 MAP kinase, in-licensed from Novartis. In the 282-patient Phase IIb trial with two undisclosed doses of acumapimod and placebo, there was a significant reduction of more than 50% in clinical treatment failures (as defined by the number of re-hospitalisations for treatment of COPD) at days 90 through 150 in patients treated with the high dose of acumapimod compared to the low dose or placebo (p≤0.027 to 0.05, for further details see our Outlook note from January 2019).
Mereo BioPharma will continue to work on finalising the Phase III trial design and at the same time look to out-license acumapimod, so that it can focus its resources on on becoming a rare disease, specialty pharmaceutical company.

Trinity Delta view: Mereo BioPharma had previously reported very promising Phase II data suggesting that acumapimod is an effective treatment of AECOPD, and on the back of this, has already generated significant interest from various potential partners. However, uncertainty about the route-to-market for acumapimod had hindered negotiations; with this now better understood, we expect Mereo BioPharma to soon enter more meaningful discussions with potential partners that could result in a deal by year end.

Our valuation of Mereo BioPharma is currently under review, as the company is executing the proposed business combination with NASDAQ-listed OncoMed Pharmaceuticalsin (due to complete in the coming weeks). Prior to the announced combination, we valued Mereo BioPharma at £510m, or 615p/share.

Lighthouse

16 April 2019


Price	165p
Market Cap	£118m
Primary exchange	AIM London
Sector	Healthcare
Company Code	MPH

Corporate client	Yes

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.

Analysts

Mick Cooper PhD
mcooper@trinitydelta.org
+44 (0) 20 3637 5042

Lala Gregorek
lgregorek@trinitydelta.org
+44 (0) 20 3637 5043

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