AstraZeneca Rumored to Have Set Sights on Mereo BioPharma Buyout

AstraZeneca_Bodo Marks/picture alliance via Getty

Bodo Marks/picture alliance via Getty Images

Pharmaceutical powerhouse AstraZeneca appears to have taken an interest in its London-based partner Mereo BioPharma and may be considering a buyout, according to circulating speculations first reported by The Times UK.

If it does push through with the bid, AstraZeneca can expect to face competition from Mereo’s other partners, including Novartis, OncXerna and Ultragenyx.

The rumors come at a great time for Mereo, who just last month was served a notice by the Nasdaq Stock Market, stating that it had failed to maintain the $1 minimum bid price in the previous 30 business days. To avoid being delisted, Mereo was given until November 21 to comply with Nasdaq’s regulations, but times have been tough, and the company has lost about 40% of its value since.

The buzz surrounding AstraZeneca’s takeover seems to have somewhat renewed industry interest in the minnow, with its shares jumping approximately 16% pre-market.

AstraZeneca and Mereo entered into a partnership in 2017 when the former offloaded its candidate AZD9668, meant to treat alpha-1 antitrypsin deficiency, to trim down its pipeline. As part of the agreement, Mereo made an upfront payment of $3 million to AstraZeneca, as well as $2 million in stock.

In the five years since, AstraZeneca has grown into an industry giant using both its impressive portfolio of drugs for cancers and heart diseases and its COVID-19 vaccine. With more money in the bank, AstraZeneca may be looking to reacquire AZD9668, now named alvelestat, which demonstrated promising Phase II efficacy and safety outcomes, according to top-line data released by Mereo last month.

AstraZeneca may also be keeping its eyes on etigilimab, Mereo’s lead oncology candidate that works by blocking the immune receptor TIGIT. Etigilimab is currently in a Phase Ib/II basket study evaluating its efficacy and safety when combined with the anti-PD-1 nivolumab. This puts etigilimab in roughly the same space as many of AstraZeneca’s TIGIT inhibitors. Keeping close tabs on this space could be in the company’s interest, especially after a string of disappointing results doused the industry’s enthusiasm about TIGIT.

Last month, Genentech, one of the leading players in the TIGIT space, announced that its tiragolumab had failed to reach the co-primary endpoint of progression-free survival in patients with advanced non-small-cell lung cancer, as revealed by the Phase III Skyscraper-01 trial. This came months after tiragolumab fell flat for the first-line treatment of extensive-stage small-cell lung cancer.

If AstraZeneca’s plans are true and come to fruition, Mereo will follow in the footsteps of Alexion Pharmaceuticals, which was acquired in mid-2021 amid AstraZeneca’s push to expand its market presence. After the acquisition, Alexion now forms AstraZeneca’s dedicated group for the development of rare disease treatments.

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