Mereo BioPharma: Good Science, Fairly Valued
Summary
- Mereo Pharma is transitioning to a rare disease focus, with lead candidate setrusumab showing promising phase 2 and 3 data for Osteogenesis Imperfecta.
- Setrusumab's phase 2 ORBIT study showed a 67% reduction in fracture rate and significant bone density improvements, outperforming current treatments like bisphosphonates.
- Mereo's financials show a market cap of $467mn and a cash runway of 8-10 quarters, but the small market limits potential returns.
- Despite promising data, the small market size for OI leads me to believe Mereo is fairly valued, so I recommend staying on the sidelines.
Avisol Capital Partners is made up of a team of medical experts, finance professionals and techies, all of whom invest their own money in the picks they share. They aim to help readers find the middle ground between value and growth investing, as they demystify the biopharma industry.
They lead the investing group Total Pharma Tracker where they offer a monthly updated catalyst database, an investability scoring system for quick reference ideas, and direct access in chat for dialogue and questions. Learn more.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.