Mereo BioPharma Group (MREO) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01We have a limited operating history and have never generated any revenue from product sales27% rewritten
2. 02We have devoted substantially all of our financial resources and efforts to the acquisition and clinical development of our product candidates. We have not completed the clinical development of any product through approval and have never generated any revenue from product sales
3. 03tax liabilities or other assessments and our ability to claim R&D tax credits or other reliefs
4. 04Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability
5. 05We may not be successful in our efforts to identify and acquire additional product candidates
6. 06there may be competitive bids for potential product candidates which we do not seek to or are unable to match
7. 07Raising additional capital may cause dilution to, or adversely affect the rights of, our security holders, restrict our operations; or require us to relinquish rights to our technologies or product candidates
8. 08If we do not successfully manage one or more of these factors in a timely manner or at all, we could experience significant delays or may not be able to successfully commercialize our current product candidates
9. 09Exchange rate fluctuations may materially affect our results of operations and financial condition78% rewritten
10. 10Our business is subject to unstable market, economic, political, regulatory and other risks in a number of international operations and business disruptions could seriously harm our financial condition and increase costs
11. 11operations and may exacerbate the effects of the risks described herein
12. 12Our future growth and ability to compete depends on retaining our key personnel and recruiting additional qualified personnel
13. 13We aim to expand our development, regulatory, and sales and marketing capabilities, and as a result, we may encounter difficulties in managing our planned growth, which could disrupt our operations
14. 14Changes in our tax rates, unavailability of certain tax credits or reliefs, or exposure to additional tax liabilities or assessments could adversely affect our results of operations and financial condition42% rewritten
15. 15The U.K.’s withdrawal from the EU, commonly referred to as Brexit, could negatively impact our business63% rewritten

Risks Related to Development, Clinical Testing, Manufacturing and Regulatory Approval

1. 16third parties being unwilling or unable to satisfy their contractual obligations to us in a timely manner
2. 17The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR. Compliance with the CTR requirements by us, and our third-party service providers, such as CROs, may impact our developments plans51% rewritten
3. 18Interim, “top-line” and preliminary data from our clinical trials and preclinical studies that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
4. 19our reputation may suffer
5. 20Manufacturing tests of setrusumab have shown that it may cause an opalescence appearance to the liquid antibody formulation
6. 21the risk that patients enrolled in clinical trials will drop out of such trials before completion20% rewritten
7. 22We may become exposed to costly and damaging liability claims, either when testing our product candidates in the clinic or at the commercial stage, and our product liability insurance may not cover all damages from such claims
8. 23the inability to commercialize, co-commercialize or promote our product candidates
9. 24The regulatory approval processes of the FDA and comparable foreign authorities, such as the EMA and MHRA, are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be harmed substantially
10. 25With respect to foreign markets, approval procedures vary among countries and, in addition to the foregoing risks, may involve additional product testing, administrative review periods and agreements with pricing authorities25% rewritten
11. 26The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity27% rewritten
12. 27Even if we obtain marketing approval of any of our product candidates in a major pharmaceutical market such as the U.S. or the EU, we may not be able to obtain approval or commercialize that product in other markets, which would limit our ability to realize our full market potential

Risks Related to Healthcare Laws and Other Legal Compliance Matters

1. 28Enacted and future healthcare legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and may affect the prices we may set
2. 29a licensure framework for follow on biologic product candidates58% rewritten
3. 30pharmaceutical product candidates and which suppliers will be included in their prescription drug and other healthcare programs. This could reduce the ultimate demand for our product candidates or put pressure on our product pricingNew
4. 31In markets outside of the U.S., the EU and the U.K., reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific product candidates and therapies
5. 32Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient organizations, and customers will be subject to applicable healthcare regulatory laws, which could expose us to penalties
6. 33similar healthcare laws and regulations in the EU, the U.K. and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers
7. 34We are subject to governmental regulation and other legal obligations related to privacy, data protection and data security. Our actual or perceived failure to comply with such obligations could harm our business37% rewritten
8. 35Due to our international operations, we are subject to anti-corruption laws, as well as export control laws, customs laws, sanctions laws and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures and legal expenses22% rewritten
9. 36Our business and operations may suffer in the event of information technology system failures, cyberattacks or deficiencies in our cybersecurity

Risks Related to Commercialization

1. 37We operate in a highly competitive and rapidly changing industry, which may result in others acquiring, developing, or commercializing competing product candidates before or more successfully than we or our partners do69% rewritten
2. 38There are no therapies with regulatory approval for ADO2. We consider vantictumab closest competitor to be the pre-clinical CLCN7-targeting siRNA developed by SiSaf LtdNew
3. 39form more advantageous strategic alliances28% rewritten
4. 40Although we have obtained a rare pediatric disease designation for setrusumab, there is no guarantee that FDA approval will result in issuance of a priority review voucher
5. 41the application is approved for a different adult indication than the rare pediatric disease for which the product is designated45% rewritten
6. 42A Fast Track Designation from the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive marketing approval47% rewritten
7. 43Product developers that benefit from PRIME designation may be eligible for accelerated assessment (in 150 days instead of 210 days), which may be granted for medicinal products of major interest from a public health perspective or that target an unmet medical need, but this is not guaranteed35% rewritten
8. 44We currently intend to enter into out-licensing or sales arrangements with pharmaceutical, biopharmaceutical or other partners for the continued development and commercialization of our non-core disease product candidates acumapimod and etigilimab and we may take the same approach for our other product candidates
9. 45Our existing and future product candidates may not gain market acceptance, in which case our ability to generate revenues from product sales will be compromised
10. 46other potential advantages over alternative treatment methods
11. 47Any product candidates for which we intend to seek approval as biologic product candidates in the U.S. may face competition sooner than anticipated

Risks Related to Our Dependence on Third Parties

1. 48Our future plans may include entering into additional out-licensing or collaboration agreements on some or all of these programs or our other development programsNew
2. 49We also have existing acquisition agreements with Novartis which we entered into in 2015 in respect of our purchase of setrusumab, leflutrozole and acumapimod, and an existing in-licensing agreement with AstraZeneca which we entered into in 2017, as amended in 2024, in respect of our exclusive license of alvelestat92% rewritten
3. 50We intend to enter into strategic relationships with third parties, based on a product-by-product assessment, for the development of some of our product candidates. If we fail to enter into these arrangements, our business, development and commercialization prospects could be adversely affected

Risks Related to Intellectual Property

1. 51We rely on patents and other intellectual property rights to protect our product candidates, the obtainment, enforcement, defense and maintenance of which may be challenging and costly. Failure to enforce or protect these rights adequately could harm our ability to compete and impair our business74% rewritten
2. 52other intellectual property rights could adversely affect our ability to develop and market our product candidates, resulting in harm to our businessNew
3. 53We enjoy only limited geographical protection with respect to certain patents and may not be able to protect our intellectual property rights throughout the world
4. 54Our patents and other proprietary rights may not adequately protect our technologies and product candidates and may not necessarily address all potential threats to our competitive advantage
5. 55we may not develop additional technologies that are patentable73% rewritten
6. 56Opposition Division in a decision dated November 20, 2025. Appeal proceedings are ongoing, during which the patent may be maintained, narrowed or invalidatedNew
7. 57We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third- party patent which might adversely affect our ability to develop, manufacture and market our product candidates
8. 58If we fail to comply with our obligations under our existing and any future intellectual property licenses with third parties, we could lose license rights that are important to our business, and our business may be substantially harmed as a result
9. 59We may not be successful in maintaining necessary rights to our product candidates or obtaining patent or other intellectual property rights important to our business through acquisitions and in-licenses
10. 60Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
11. 61We may be subject to claims challenging the inventorship of our patents and other intellectual property
12. 62Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect our product candidates
13. 63If we do not obtain protection under the Hatch-Waxman Amendments and similar non-U.S. legislation for extending the term of patents covering our product candidates, our ability to compete effectively could be impaired
14. 64If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our competitive position may be adversely affected
15. 65If we are unable to protect the confidentiality of our trade secrets and know-how, our business and competitive position would be harmed
16. 66Our business and operations may suffer, and proprietary information may be lost, in the event of information technology system failures, cyberattacks or deficiencies in our cybersecurity

Risks Related to our ADSs

1. 67The trading price of our ADSs may be volatile, and you could lose all or part of your investment24% rewritten
2. 68other events and factors, many of which are beyond our control
3. 69We may not satisfy Nasdaq’s requirements for continued listing. If we cannot satisfy these requirements, Nasdaq could delist our ADSs, which could have an adverse impact on the liquidity and market price of our ADSsNew
4. 70You may be subject to limitations on the transfer of ADSs and the withdrawal of the underlying ordinary shares
5. 71The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation
6. 72If securities or industry analysts do not publish research or publish inaccurate research or unfavorable research about our business, the price and trading volume of ADSs could decline
7. 73Our ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable results to the plaintiff(s) in any such action
8. 74You may not receive distributions on ordinary shares represented by ADSs or any value for them if it is unlawful or impractical to make them available to holders of ADSs
9. 75Holders of ADSs may not have the same voting rights as holders of ordinary shares and may not receive voting materials in time to be able to exercise their right to vote
10. 76We are entitled to amend the deposit agreement and to change the rights of ADS holders under the terms of such agreement, or to terminate the deposit agreement, without the prior consent of the ADS holders
11. 77It may be difficult for you to bring any action or enforce any judgment obtained in the U.S. against us or members of our Board, which may limit the remedies otherwise available to us
12. 78Shareholders in countries other than the U.K. will suffer dilution if they are unable to participate in future preemptive equity offerings
13. 79Failure to establish and maintain effective internal controls could have a material adverse effect on our business and stock price
14. 80Commencing January 1, 2024, we were required to comply with the domestic reporting regime under the Exchange Act and will continue to incur significant legal, accounting and other expenses, and our management must devote substantial time to public company compliance initiatives and corporate governance matters