MREO 10-K & 10-Q changes, risk factors and insider trading

We are a multi-asset, clinical-stage biopharmaceutical company with a limited operating history, and have incurred significant operating losses since our formation. For the year-ended December 31, 20242025 we had a net loss of $(43.3)$41.9 million, and we had a net loss of $(29.5)$43.3 million for the year ended December 31, 2023.2024. As of December 31, 2024,2025, we had an accumulated deficit of $462.9$501.0 million ($419.6$462.9 million as of December 31, 20232024). Our losses have resulted principally from expenses incurred from the research and development of our product candidates and from general and administrative costs that we have incurred while building and operating our business infrastructure. We expect to continue to incur significant operating losses for the foreseeable future as we invest in our research and development efforts, and seek to obtain regulatory approval and potentially commercialize our product candidates. We anticipate that our expenses will increase substantially as we:

While we have raised approximately $259 million since 2020 through private placements of ordinary shares and convertible loan notes in 2020, a public offering of ADSs in February 2021, an “at-the-market” offering of ADSs in 2023, and an underwritten registered direct offering of ADSs in 2024, we expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue to advance our rare disease portfolio. In addition, if we obtain marketing approval for product candidates where we retain commercial rights, we expect to incur significant commercialization expenses related to product sales, marketing, distribution and manufacturing. Furthermore, we expect to continue to incur additional costs associated with operating as a publicly traded company in the U.S. and maintaining a listing on Nasdaq.the Nasdaq Capital Market. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.

We believe that our existing cash and cash equivalents will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into 2027mid-2027 at which point we will require additional capital. Our failure to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on our business, results of operations and financial condition.

the costs for our activities related to our ongoing collaboration with Ultragenyx for setrusumab for the treatment of children and adults with OI, including the costs forrelated ourto any regulatory interactions, and preparation for the potential commercialization of setrusumab, if approved, in Europe and the U.K, andas well as costs for potential future clinical trials for alvelestat in AATD;

the performance of our collaborators and partners under the existing agreements on setrusumab, navicixizumabvantictumab, leflutrozole and leflutrozolenavicixizumab;

Since our formation, we have devoted substantially all of our resources to acquiring our product candidates and developing setrusumab, alvelestat, etigilimab, acumapimod and leflutrozole; building our intellectual property portfolio; developing our supply chain; planning our business; raising capital; and providing general and administrative support for these operations. Additionally, prior to our acquisition of vantictumab, etigilimab and navicixizumab in the Merger, Mereo BioPharma 5 (formerly OncoMed) had invested significant resources to developing boththese product candidates. We have not yet demonstrated our ability to successfully complete any Phase 3 or other pivotal clinical trials, obtain regulatory approval, directly contract with third parties to manufacture commercial-scale product candidates, or conduct or partner with others to conduct sales and marketing activities necessary for successful product commercialization. Additionally, although we have acquired product candidates from two large pharmaceutical companies, we have not demonstrated the sustainability of our business model of acquiring and developing product candidates from, and becoming a partner of choice for, pharmaceutical and biotechnology companies, nor have we demonstrated our ability to obtain approvals for or to commercialize or co-commercialize these product candidates. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

We are not permitted to market or promote any product candidates in the U.S., EU, U.K., or other countries before we receive regulatory approval from the FDA, the EMA, or comparable U.K. or foreign regulatory authorities, and we may never receive such regulatory approval for our current product candidates. We have not submitted a BLA or an NDA to the FDA, an application for a MA ("MAA')MAA or a conditional MA to the EMA, an MAA to the MHRA or comparable applications to other regulatory authorities. The success of our current product candidates will depend on many factors, including the following:

receipt of regulatory approvals from applicable regulatory authorities, including approvals of NDAs or BLAs from the FDA, or MAAs from the EMA or MHRA and maintaining any such approvals;

maintaining and growing an organization of people who can develop and, if approved, commercialize, market and sell our product candidates, if approved; and if approved, acceptance of our current product candidates by patients, the medical community, and third-party payors; our ability to compete with other therapies to treat OI, AATD, BOSADO2 or certain oncology indications; continued acceptable safety profiles following approval of our current product candidates; and our ability to qualify for, maintain, enforce, and defend our intellectual property rights and claims.

Following the licensing agreements for navicixizumabvantictumab, leflutrozole and leflutrozole,navicixizumab, and the completion of a strategic partnership for setrusumab, and if we out-license or sell our non-core product candidates or out-license any of our core rare disease product candidates for any territories, we could be exposed to future liabilities.

In January 2021, we completed a strategic partnership for setrusumab and completedannounced the out-licenseout-licenses of vantictumab, navicixizumab and leflutrozole in August 2025, January 2020 and in December 2023, respectively. We plan to partner or sell or out-license our non-core product candidates, acumapimod for the treatment of AECOPD and etigilimab for the treatment of advanced solid tumors, recognizing the need for a larger sales infrastructure and greater resources to take these product candidates to market.

The global credit and financial markets have experienced extreme volatility and disruptions (including as a result of the COVID-19 pandemic and actual or perceived changes in interest rates and economic inflation), which has included severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, high inflation, uncertainty about economic stability and swings in unemployment rates. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of supply chain disruptions, labor shortages, fluctuations in currency exchange rates, changes in interest rates, trade barriers, tariffs, military conflict, acts of terrorism or other geopolitical events.

Our business is subject to many of these risks as we conduct business internationally. We source research and development, manufacturing, consulting, and other services from companies based throughout the U.S., the EU, the U.K., Switzerland, IndiaSwitzerland and ChinaIndia and we conduct our clinical trials in the U.S., Canada, certain European countries, and other countries. Accordingly, our future results could be harmed by a variety of factors, any or all of which could disrupt our supply chain, adversely affect the cost of raw materials and other services, adversely affect our ability to conduct ongoing and future clinical trials of our product candidates, and adversely affect our ability to commercialize our products (subject to regulatory approval).

Current global economic conditions are highly volatile due to a number of reasons, including geopolitical instability, such as the military conflicts between Russia and Ukraine, the various military conflicts betweenin Israelthe andMiddle Hamas,East, recent inflation that increased our operating expenses and disruptions in the capital and credit markets that may reduce our ability to raise additional capital when needed on acceptable terms, if at all. Emerging international trade relations, new legislation and tariffs may also adversely impact our operations and/or financial condition by limiting or preventing the activities of third parties that we engage, increasing import costs or increasing the cost of our operations. New or increased tariffs, export controls or other trade barriers could result in higher prices for the materials we use and the investigational products we are developing and could materially impact our supply chain and manufacturing costs. Furthermore, the recent inflationary environment related to increased aggregate demand and supply chain constraints has increased our operating expenses and may continue to affect our operating expenses. Economic conditions may also strain our suppliers, possibly resulting in supply disruptions that impact our ongoing clinical trials and other operations. A significant worsening of global economic conditions could materially increase these risks we face. Any new or prolonged downturn of global economic conditions could harm our business operations, and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

As a company that carries out extensive research and development (“R&D”) activities, we benefithistorically benefited from the U.K. small and medium sized enterprises (“SME”) research and development relief (“SME R&D Relief”), which providesprovided relief against U.K. Corporationcorporation Taxtax and enablesenabled us to surrender some of our trading losses that arisearose from our R&D activities for a cash rebatecredit (the “R&D tax credit”). Pursuant to changes made by the Finance Act 2023,s,2023, a cash rebate of up to 27% of eligible R&D expenditure is available,available for R&D intensive companies where at least 40% of their total expenditure is on qualifying R&D, or up to 18.6% of eligible R&D expenditure for other companies. forFor expenditure incurred on or after April 1, 2023, certain subcontracted qualifying research expenditures are eligible for a cash rebate of up to 17.53% for R&D intensive companies or 12.09% for other companies. The difference in cash rebate for qualifying subcontracted expenditure versus other qualifying expenditure is due to a statutory restriction of 65% being applied to unconnected qualifying subcontracted expenditure, thus restricting the benefit available. Pursuant to changes made by the Finance Act 2024, for accounting periods starting on or after April 1, 2024, the new merged scheme will come into effect for all companies, other than loss making R&D intensive SMEs. For loss making R&D intensive SMEs, the enhanced R&D intensive support (“ERIS”) regime will be available (for companies where at least 30% of their total expenditure including any connected companies is on qualifying R&D). Under the new merged scheme, we expect to benefit from the taxable credit for qualifying R&D expenditure which may either be offset against corporation tax liabilities or paid net of tax as a cash credit where there is no liability in the future. Subcontracted expenditure in most cases is expected to be a qualifying cost (unless it relates to non-qualifying costs subcontracted overseas) under the new merged scheme. In the event we generate revenues in the future, we may also benefit from the U.K. “patent box” regime that allows profits attributable to revenues from patents or patented product candidates to be taxed at an effective rate of 10%. This relief applies to profits earned following election into the regime. When taken in combination with the enhanced relief available on our R&D expenditures (assuming the R&D intensity threshold is still met at this stage), we expect a long-term lower rate of corporation tax to apply to us. If, however, there are unexpected adverse changes to the U.K. R&D tax credit regime or the “patent box” regime, or for any reason we are unable to qualify for these regimes, or we are unable to use net operating loss and tax credit carry forwards and certain built-in losses to reduce future tax payments, our business, results of operations, and financial condition may be adversely affected.

Prior to our acquisition of setrusumab, alvelestat, vantictumab, etigilimab, acumapimod, leflutrozole and navicixizumab, we were not involved in the development of these product candidates and, as a result, we are dependent on Novartis, AstraZeneca and Mereo BioPharma 5 (formerly OncoMed) having accurately reported the results and correctly collected and interpreted the data from all clinical trials conducted prior to our acquisition.

Before obtaining approval from regulatory authorities for the commercialization of any of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidate, or with respect to product candidates regulated as biologics, safety, purity and potency, in humans. Before we can initiate clinical trials for any product candidates, we must submit the results of preclinical studies to the FDA or comparable foreign regulatory authorities (including the EMA and MHRA) along with other information, including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an IND or similar regulatory submission. The FDA or comparable foreign regulatory authorities (including the EMA and MHRA) may require us to conduct additional preclinical studies for any product candidate before it allows us to initiate clinical trials under any IND or similar regulatory submission, which may lead to delays and increase the costs of our preclinical development programs. Moreover, even if we commence clinical trials, issues may arise that could cause regulatory authorities to suspend or terminate such clinical trials. Any such delays in the commencement or completion of our ongoing and planned clinical trials for our product candidates could significantly affect our product development timelines and product development costs and harm our financial position.

The results from preclinical studies or early clinical trials of a product candidate may not predict the results of later clinical trials of the product candidate, and interim results of a clinical trial are not necessarily indicative of final results. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy characteristics despite having progressed through preclinical studies and initial clinical trials. It is not uncommon to observe results in clinical trials that are unexpected based on preclinical studies and early clinical trials, and many product candidates fail in clinical trials despite very promising early results.results, or results from trials earlier in the clinical development process. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies. For example, the results of the top-line data from the setrusumab Phase 3 Orbit and Cosmic studies. See “Item 1. Business—Core Rare Disease Product Candidates—Setrusumab (BPS-804/UX143) for the Treatment of Osteogenesis Imperfecta—Top-line Data from Setrusumab Phase 3 Orbit and Cosmic Studies.”

the FDA, EMAEMA, MHRA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials;

Clinical trials must be conducted in accordance with the FDA and other applicable regulatory authorities’ legal requirements, regulations and guidelines, and remain subject to oversight by these governmental agencies and ethics committees or IRBs at the medical institutions where such clinical trials are conducted. We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by a Data Safety Monitoring Board for such trial or by the FDA or comparable foreign regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or applicable clinical trial protocols, adverse findings from inspections of clinical trial sites by the FDA, EMAEMA, MHRA or comparable foreign regulatory authorities, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols to comply with these changes. Amendments may require us to resubmit our clinical trial protocols to regulators or to IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial.

Furthermore, on April 28, 2025, the U.K. adopted an amendment to the Medicines for Human Use (Clinical Trials) Regulations 2004 intended to support a more streamlined and flexible regulation of clinical trials, removing unnecessary administrative burdens on trial sponsors, whilst protecting the interests of trial participants. It also intends to bring the U.K. regulatory framework for clinical trials, which is still based on the EU Clinical Trials Directive, into closer alignment with the CTR. The amendment will become applicable on April 28, 2026 following a one-year transition period. Further, conducting clinical trials in foreign countries, as we may do for our product candidates, presents additional risks that may delay completion of our clinical trials. These risks include the failure of enrolled subjects in foreign countries to adhere to clinical protocols as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, and political and economic risks, including war, relevant to such foreign countries.

From time to time, we may publicly disclose interim, top-line, or preliminary data from our and our partners' clinical trials and preclinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the interim, top-line, or preliminary results that we report may differ from future results of the same studies or trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Top-line and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the top-line or preliminary data we previously published. As a result, top-line and preliminary data should be viewed with caution until the final data are available.

These factors and others outside our control may make it difficult for us to enroll enough patients to complete our clinical trials in a timely and cost-effective manner. For example, the COVID-19 pandemic previously resulted in delays in our ability to enroll and treat patients and obtain data from clinical trials, particularly patients with severe AATD-LD. We also rely on, and will continue to rely on, CROs and clinical trial sites to ensure proper and timely conduct of our clinical trials and preclinical studies. Though we have entered into agreements governing their services, we will have limited influence over their actual performance. Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates and jeopardize our ability to obtain regulatory approval for the sale of our product candidates. Furthermore, even if we are able to enroll a sufficient number of patients for our clinical trials, we may have difficulty maintaining enrollment of such patients in our clinical trials.

The regulatory approval processes of the FDA and comparable foreign authoritiesauthorities, 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 substantiallyharmed harmed.substantially.

The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of our product candidates are subject to extensive regulation by the FDA in the U.S. and by comparable foreign regulatory authorities in foreign markets, such as the EMA.EMA and MHRA. In the U.S., we are not permitted to market our product candidates in the U.S. until we receive regulatory approval of a BLA or NDA from the FDA. The process of obtaining such regulatory approval is expensive, often takes many years following the commencement of clinical trials and can vary substantially based upon the type, complexity and novelty of the product candidates involved, as well as the target indications and patient population. Approval policies or regulations may change, and the FDA, EMAFDA and comparable foreign regulatory authoritiesauthorities, such as the EMA and MHRA, have substantial discretion in the approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons. Despite the time and expense invested in clinical development of product candidates, regulatory approval of a product candidate is never guaranteed. Of the large number of drugs in development, only a small percentage successfully complete the FDAFDA, EMA, MHRA or comparable foreign regulatory approval processes and are commercialized.

Prior to obtaining approval to commercialize a product candidate in the U.S. or abroad, we must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, including the EMA and MHRA, that such product candidates are safe and effective for their intended uses, and in the case of biological products, that such product candidates are safe, pure and potent. Results from nonclinical studies and clinical trials can be interpreted in different ways. Even if we believe available nonclinical or clinical data support the safety purity, potency, or efficacy, of our product candidates, such data may not be sufficient to obtain approval from the FDA and comparable foreign regulatory authorities.authorities, including the EMA and MHRA. The FDA, EMAEMA, MHRA or comparable foreign regulatory authorities, as the case may be, may also require us to conduct additional preclinical studies or clinical trials for our product candidates either prior to or post-approval, or may object to elements of our clinical development program.

The FDA, EMAEMA, MHRA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including:

negative or ambiguous results from our clinical trials or results may not meet the level of statistical significance required by the FDA, EMAEMA, MHRA or comparable foreign regulatory agencies for approval;

We may attempt to secure approval from the FDA or comparable foreign regulatory authoritiesauthorities, such as the EMA and MHRA, through the use of accelerated approval pathways. If we are unable to obtain such approval, we may be required to conduct additional preclinical studies or clinical trials beyond those that we contemplate, which could increase the expense of obtaining, and delay the receipt of, necessary marketing approvals. Even if we receive accelerated approval from the FDA, if our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw any accelerated approval we have obtained.

The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional confirmatory studies to verity and describe the drug’s clinical benefit. If such post-approval studies fail to confirm the drug’s clinical benefit or are not completed in a timely manner, the FDA may withdraw its approval of the drug on an expedited basis. In addition, in December 2022, President Biden signed an omnibus appropriations bill to fund the U.S. government through fiscal year 2023. Included in the omnibus bill is the Food and Drug Omnibus Reform Act of 2022, which among other things, provided FDA newadditional statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval. Under these provisions, the FDA may require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted.

Prior to seeking accelerated approval for any of our product candidates, we intend to seek feedback from the FDA and will otherwise evaluate our ability to seek and receive accelerated approval. There can be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit an NDA or BLA for accelerated approval or any other form of expedited development, review or approval. Furthermore, if we decide to submit an application for accelerated approval for our product candidates, there can be no assurance that such application will be accepted or that any expedited development, review or approval will be granted on a timely basis, or at all. The FDA or other comparable foreign regulatory authoritiesauthorities, such as the EMA and MHRA, could also require us to conduct further studies prior to considering our application or granting approval of any type. A failure to obtain accelerated approval or any other form of expedited development, review or approval for our product candidate would result in a longer time period to commercialization of such product candidate, if any, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs and biologics to be reviewed and/or approved by necessary government agencies or to otherwise respond to regulatory submissions, which would adversely affect our business. In recent years, the U.S. government has shut down multiple times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA and other government employees and stop critical activities. In addition, the current U.S. Presidential administration has issued certain policies and Executive Orders aimed at reducing the workforce and operating costs of certain U.S. federal agencies, including the FDA, and it remains unclear the extent to which these actions may affect the FDA’s ability to conduct its regulatory review and oversight activities. If a prolonged government shutdown occurs, or if staffing shortages, funding limitations or similar factors prevent the FDA and other government agencies from conducting their regular activities, it could significantly impact the ability of the FDA or such other governmental agencies to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

If the FDA or a comparable foreign regulatory authorityauthority, such as the EMA and MHRA, approves any of our product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, and recordkeeping for such product will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, facility registration, and drug listing, as well as continued compliance with cGMP or similar foreign requirements for manufacturing, good distribution practice, requirements for product distribution, and GCP requirements for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize, or co-commercialize, a product. We and our contract manufacturers will also be subject to user fees and periodic inspection by the FDA, and other comparable foreign regulatory authorities to monitor compliance with these requirements and the terms of any product approval we may obtain. In addition, any regulatory approvals that we receive for a product may also be subject to limitations on the approved indicated uses for which such product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of such product.

If there are changes in the application of legislation or regulatory policies, or if problems are discovered with a product or the manufacture of a product, or if we or one of our distributors, licensees, or co-marketers fails to comply with regulatory requirements, the regulatory authorities could take various actions. These include if we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facilities where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. In addition, failure to comply with FDA and other comparable foreign regulatory requirementsrequirements, including those of the EMA and MHRA, may subject our company to administrative or judicially imposed sanctions, including:

refusal by the FDAFDA, EMA, MHRA or comparable foreign regulatory authority to approve pending applications or supplements to approved applications submitted by us or suspension or revocation of approvals;

The policies of the FDA, theEMA, EMA,MHRA and other comparable foreign regulatory authorities may change and additional government regulations may be enacted that could prevent, limit, or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature, or extent of government regulation that may arise from future legislation or administrative or executive action, either in the U.S., the U.K.,EU, EU,or the U.K. or other jurisdictions. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to enforcement action and we may not achieve or sustain profitability.

Our employees and independent contractors, including principal investigators, CROs, CMOs, consultants, vendors, and any other third parties or partners we may engage in connection with the development and commercialization of our product candidates may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could adversely affect our business.

Misconduct by our employees and independent contractors, including principal investigators, CROs, CMOs, consultants, vendors, and any other third parties or partners we may engage in connection with the development and commercialization of our product candidates, could include intentional, reckless, or negligent conduct or unauthorized activities that violate: (i) the laws and regulations of the FDA and other similar regulatory authorities, including those laws that require the reporting of true, complete and accurate information to such authorities; (ii) manufacturing standards; (iii) data privacy, security, fraud and abuse, and other healthcare laws and regulations; or (iv) laws that require the reporting of true, complete, and accurate financial information and data. Specifically, sales, marketing, and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing, and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs, and other business arrangements. Activities subject to these laws could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, creation of fraudulent data in pre-clinical studies or clinical trials, or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations. Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid, other U.S. federal healthcare programs or healthcare programs in other jurisdictions, individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations. We are also subject to the data privacy regime in the EU and U.K., which imposes obligations and restrictions on the collection and use of personal data relating to individuals located in the EU and U.K., respectively. If we do not comply with our obligations under these privacy regimes, we could be exposed to significant fines and may be the subject of litigation and/or adverse publicity, which could have a material adverse effect on our reputation and business.

Moreover, heightened governmental scrutiny is likely to continue over the manner in which manufacturers set prices for their marketed products, which has resulted in several recent U.S. Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), redesigns the Medicare Part D benefit (beginning in 2024), and replaces the Part D coverage gap discount program with a new discounting program (which began in 2025). The IRA permits the Secretary of the Department of Health and Human Services, or HHS, to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has issued and will continue to issue guidance implementing the IRA. CMS has published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and the list of the subsequent 15 drugs that will be subject to negotiation, although the Medicare drug price negotiation program is currently subject to legal challenges. While the impact of the IRA on the pharmaceutical industry cannot yet be fully determined, it is likely to be significant. We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare product candidates and services, which could result in reduced demand for our product candidates or additional pricing pressures.

The current U.S. administration is pursuing a two-fold strategy to reduce drug costs in the U.S. While it is unclear whether and how the proposed policies will be implemented, these policies are likely to have a negative impact on the pharmaceutical industry and on our ability to receive adequate revenues for any product candidate that we receive marketing authorization for and commercialize. On the one hand, President Trump has threatened to impose significant tariffs on pharmaceutical manufacturers that do not adopt pricing policies such as most favored nation pricing, which would tie the price for drugs in the U.S. to the lowest price in a group of other countries. In response, multiple manufacturers have reportedly entered into confidential pricing agreements with the federal government. On the other hand, the U.S. administration is pursuing traditional regulatory pathways to impose drug pricing policies, although proposed regulations have not yet been published. Even regulatory proposals or executive actions that are ultimately deemed unlawful could negatively impact the U.S. pharmaceutical sector and our business. In addition, pharmaceutical pricing and marketing has long been the subject of considerable discussion in Congress and among policymakers, and it is possible that Congress could enact additional laws that negatively affect the pharmaceutical industry. Individual states in the U.S. have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure, drug price reporting and other transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Some states have enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states. Legally-mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition, and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical 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 pricing.

We are a biopharmaceutical company focused on the development of innovative therapeutics for rare diseases. We have developed a portfolio of late-stage clinical product candidates. Our twolate-stage rare disease product candidates are setrusumab for the treatment of osteogenesis imperfecta (OI) and alvelestat for the treatment of severe alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD).Setrusumab. Setrusumab has received orphan designation for OI from the EC and the FDA, PRIME designation from the EMA and has Breakthrough Therapy designation and rare pediatric disease designation from the FDA. Alvelestat has received orphan designation for AATD from the EC and the FDA, and Fast Track designation for the treatment of AATD-LD from the FDA. We also have an early-stage rare disease program, vantictumab, for the treatment of a second bone disease, autosomal dominant osteopetrosis Type 2 (ADO2). The global development of vantictumab is being funded and led by our partner, āshibio, and we retain the European commercial rights.

Our strategy is to selectively acquire and develop product candidates for rare diseases that have already received significant investment from large pharmaceutical and biotechnology companies and that have substantial pre-clinical, clinical and manufacturing data packages. Since our formation in March 2015, we have successfully executed this strategy by acquiring sixall of our clinical-stage product candidates of which fourthree were in rare diseases and oncology. Four of our six clinical-stage product candidates were acquired from large pharmaceutical companies and two were acquired in our merger with OncoMed Pharmaceuticals Inc. in 2019.diseases. We have successfully completed large, randomized Phase 2 clinical trials for four of our product candidates and the Phase 1b portion of a Phase 1b/2 for a fifth product candidate.candidate, and we and our partner Ultragenyx recently announced the results from two Phase 3 studies for our lead program setrusumab in OI.

No revenue was recognized in the year ended December 31, 2024, however in previous years revenueRevenue has included income from licensing and collaboration agreements. Consideration received up front is recognized at the point in time in which the right to use a license or intellectual property is transferred. Income from development, regulatory, commercial or similar milestones is recognized when considered probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the milestone is subsequently resolved.

We do not currently have any approved product candidates. Accordingly, we have not generated any commercial sales revenue during the period. In the future, we expect to be able to generate revenuescommercial sales revenue if we are able to obtain regulatory approval and commercialize one or more of our product candidates.

Payments to third parties arising as a direct consequence of the revenue recognized are recorded within cost of revenue in the Company’s consolidated statements of operations and comprehensive loss. No cost of revenue was recognized inFor the year ended December 31, 2024, however for the year ended December 31, 2023,2025, cost of revenue included amounts that we were obligated to pay to Novartis under the 2015 asset purchase agreements. In 2015, when we purchased acumapimod, leflutrozole and setrusumab from Novartis, we agreed to pay Novartis if certain events occurred in relation to these compounds. The events that warrant a payment to Novartis are sales related or when a change in control occurs. When it is probable that either of these events will occur, revenue is recognized, and the corresponding payment obligation to Novartis is recognized within cost of revenue.

Research and development expenses (“R&D expenses”) expenses

Interest income comprises interest received on cash and shortcash term deposits.equivalents.

Interest expense principally comprises interest on convertible loan notes,notes prior to their conversion in February 2025, deferred consideration and bank charges. For further information on the terms of our convertible loan notes see “—Liquidity and Capital Resources—Indebtedness.”

Our consolidated financial statements are presented in U.S. dollars. We initially record transactions in foreign currencies at the rate prevailing on the date the transaction first qualifies for recognition. Foreign currency transaction gain/(loss) consists of the difference arising on settlement or translation of transactions denominated in currencies other than the functional currency of the transacting foreign entity, which are primarily held inbetween U.S. dollars and British pound sterling.

AsWe ahistorically U.K. resident trading entity, we are subject to U.K. corporate taxation. Due to the nature of our business, we have generated operating losses since formation. As of December 31, 2024 and 2023, we had cumulative carry-forward U.K. tax losses of $36.6 million and $30.6 million, respectively. Subject to any relevant restrictions, we expect these to be available to carry forward and offset against future operating profits. As a company that carries out extensive R&D activities, we benefitbenefited from the U.K. R&D small or medium-sized enterprise tax credit regime, or SME R&D Relief, which provided relief against U.K. corporation tax and areenabled ableus to surrender some of our trading losses that arisearose from our research and developmentR&D activities for a cash rebate (the "R&D tax credit").credit. Pursuant to changes made by the Finance Act 2023, fromfor expenditure incurred on or after April 1, 2023, a cash rebatecredit of up to 27% of eligible R&D expenditure is available for R&D intensive companies where at least 40% of their total expenditure is on qualifying R&D, or for non-R&D intensive companies, a cash rebatecredit of up to 18.6% of eligible R&D expenditure is available. From April 1, 2023, certain subcontracted qualifying research expenditures arewere eligible for a cash rebatecredit of up to 17.53% for R&D intensive companies or 12.09% for other companies. The difference in cash rebatecredit for qualifying subcontracted expenditure versusvs. other qualifying expenditure is due to a statutory restriction of 65% being applied to unconnected qualifying subcontracted expenditure, thus restricting the benefit available. Qualifying expenditures largely comprise employment costs for R&D staff, subcontracted CRO and CMO costs, consumables and certain internal overhead cost incurred as part of research projects. We do not currently expect to qualify as an R&D intensive company.

We operate in the U.K. and in the U.S. and are subject to corporate taxation in those countries. We have generated losses since inception and have therefore not paid U.K. corporation taxtax, except in 2021. The income tax benefit included in the consolidated statements of operations and comprehensive loss in the year ended December 31, 2023 represents tax refunds in respect of income taxes paid in 2021.

The U.K. corporation tax rate applied for 20242025 was 25% (20232024: 23.5%25%). The U.K. corporation tax for 2023 resulted from applying the enacted statutory rate of 19% from January 1, 2023 through April 1, 2023, and 25% for the remainder of 2023. U.K. deferred tax assets and liabilities have been measured at a rate of 25%. The U.S federal income tax rate is 21%.

As of December 31, 2024,2025, the Company had U.K. net operatingtax losslosses carryforwardscarried forward of $36.6$64.1 million, that can be carried forward indefinitely.indefinitely, subject to certain restrictions in usage. The Company had U.S. federal tax losses to be carried forward of approximately $66.3$67.0 million of which $19.5$20.5 million can be carried forward indefinitely and $46.8$46.5 million which will begin to expire in 2025.2026. The Company also had $13.9$13.7 million of U.S. federal R&D tax credits that begin to expire in 20252027 and U.S. state tax losses to be carried forward of less than $0.1 million which begin to expire in 2027. The Company also had less than $0.1 million of state R&D tax credits that do not have an expiration date.

No costCost of revenue of $0.1 million was recognized in the year ended December 31, 2024.2025, Costwhich of revenue of $2.6 million for the year ended December 31, 2023 primarily representedcomprised amounts payablepaid pursuant to ourthe 2015 asset purchase agreement with Novartis,Novartis for leflutrozole, under which the Company pays a percentage of proceeds resulting from milestone revenue received, subject to certain deductions and other amounts. No cost of revenue was recognized in the year ended December 31, 2024.

Total R&D expenses increaseddecreased by $3.5$3.2 million, from $17.4 million in 2023 to $20.9 million in 2024.the year ended December 31, 2024 to $17.8 million in the year ended December 31, 2025.

The increasedecrease was primarily due to a $6.2 million and $2.6 million increasereductions in R&D expenses for alvelestat and setrusumab,etigilimab of $7.7 million and $1.0 million, respectively, partially offset by aan $5.5increase of $5.7 million decrease in R&D expenses for etigilimab.setrusumab.

The reductionreductions in etigilimabprogram expenses for alvelestat was primarily due to the winding down and completion of the openactivities labelundertaken in preparation for the potential Phase 1b/23 basketstudy, studyincluding drug formulation and manufacturing, in combinationthe withyear anended anti-PD-1December in31, a range of tumor types.2024.

(i)General anand increaseadministrative ofexpenses approximatelyalso $2.7includes $3.8 million in certainthe year ended December 31, 2025 of pre-commercial activities to lay the foundation for the potential commercial launch of setrusumab in Europe, if approved, including activitiesthose to support pricing and reimbursement by HTA authorities and payor decision-makers in Europe, from $2.7 million in the year ended December 31, 2023 to $5.4 million in the year ended December 31, 2024;Europe.

Interest income increaseddecreased by $0.9 millionmillion, from $2.1 million in 2023 to $3.0 million in the year ended December 31, 2024,2024 to $2.2 million in the year ended December 31, 2025, principally due to a highercombination of lower interest rates earned and lower average cash and cash equivalents balancebalances asin athe year ended December 31, 2025 compared to the year ended December 31, 2024. These lower balances were the result of receivingthe utilization of the net proceeds of $46.2 million received from the underwritten registered direct offering in June 2024.

Interest expense decreased by $1.5$1.1 millionmillion, from $2.9 million in 2023 to $1.4 million in 2024.the year ended December 31, 2024 to $0.3 million in the year ended December 31, 2025. The decrease was principally due to the lower balance in the yearconversion of convertible loan notes asin February 2025, following which the privateCompany placementhad loanno notessignificant wereremaining fullyinterest-bearing converted and redeemed in August 2023.liabilities.

The total change in fair value of warrants forin 2024the year ended December 31, 2025 was an unrealized gain of $0.8 million, compared to an unrealized loss of $0.4 million, compared to an unrealized gain of $0.2 million in 2023. The unrealized loss in the year ended December 31, 20242024. The unrealized gain in the year ended December 31, 2025 was primarily due to the impact of the increasedecreases in the price of the Company’s ADSs on the value of the warrant liabilities, whereaswhile the unrealized loss in the year ended December 31, 2023, the unrealized gain2024 was primarily due to increases in the expiryprice of the PrivateCompany's Placement warrants in June 2023.ADSs.

The net foreign exchange gainloss for the year ended December 31, 20242025 was $1.2$6.3 million, compared to a lossgain of $2.3$1.2 million in the year ended December 31, 2023.2024. This change primarily reflects (i) the impact of a strengtheningweakening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the year ended December 31, 2024,2025, compared to a weakeningstrengthening of U.S. dollars in the year ended December 31, 2023, and (ii) higher U.S. dollar cash and cash equivalent balances following the underwritten registered direct offering in June 2024.

The benefit from research and development tax credit increased by $0.4$0.2 million, from $1.3 million in the year ended December 31, 2023 to $1.6 million in the year ended December 31, 2024.2024 Theto income$1.9 tax benefit represents eligible cash rebates paid or receivable from the tax authoritiesmillion in the jurisdictionsyear withinended whichDecember we31, operate2025. for eligible types of research and development activities and associated expenditure. TheThis increase was due toreflects a higher amountlevel of eligiblequalifying researchexpenditure andin developmentthe activities.year ended December 31, 2025.

The foreign currency translation adjustment for the year ended December 31, 20242025 was a lossgain of $1.4$8.0 million, compared to a gainloss of $4.2$1.4 million in the year ended December 31, 2023.2024. This change primarily reflects the impact of a strengtheningweakening in the value of U.S. dollars when translating U.S.pound dollarsterling functional currency balances into our functionalpresentational currency of pound sterling in the year ended December 31, 2024, compared to a weakening of U.S. dollars in the year ended December 31, 2023.2025, compared to a strengthening of U.S. dollars in the year ended December 31, 2024.

Under the current business plan and cash flow forecasts, and in consideration of our ongoing research and development efforts and our general corporate funding requirements, we anticipate that our current on-hand cash resources will extend into 2027.mid-2027. However, we will need additional external funding to complete our development plans and potentially commercialize selected rare disease products. We plan to fund our operations through cash on hand and a combination of non-dilutive funding sources, public or private equity or debt financings or other sources.

$50.0 million under the license and collaboration agreement with Ultragenyx for setrusumab in 2021 and a further milestone payment of $9.0 million in July 2023;

$4.0 million under the license and collaboration agreement with Feng Biosciences (formerly OncXerna) for navicixizumab in 2020 and a further milestone payment of $2.0 million in 2022; and $1.0 million under the global license agreement with ReproNovo for leflutrozole in December 2023.2023 and a further milestone payment of $0.5 million in 2025.

In addition, Mereo enters into contracts in the ordinary course of business with CROs, CMOs, and other vendors, including with Ultragenyx for the manufacture of setrusumab as described in “Item 1. Business—Material Agreements—Agreements with Ultragenyx for Setrusumab,” to assist in the performance of its research and development activities and other services and products for operating purposes. The contracts with CROs generally provide for termination on notice, and therefore are cancelable contracts. We have manufacturing commitments with CMOs of $0.0 million and $0.5 million as of December 31, 20242025 (2023:and $4.22024, million).respectively.

The table below summarizes our cash flows (used in) /provided by operating, investing and financing activities for the years ended December 31, 20242025 and 2023.2024.

Net cash used in operating activities for the year ended December 31, 20242025 was $32.8$31.0 million, ana increasedecrease of $11.7$1.9 million from $21.1$32.8 million in the year ended December 31, 2023.2024. TheThis mostdecrease significantis driversprincipally ofdue the increase wereto:

Our strategy is to selectively acquire and develop product candidates for rare diseases that have already received significant investment from large pharmaceutical and biotechnology companies and that have substantial pre-clinical, clinical and manufacturing data packages. Since our formation in March 2015, we have successfully executed on this strategy by acquiring all of our clinical-stage product candidates of which three were in rare diseases. We have successfully completed large, randomized Phase 2 clinical trials for four of our product candidates and the Phase 1b portion of a Phase 1b/2 for a fifth product candidate, and we and our partner Ultragenyx announced the results from two Phase 3 studies for our lead program setrusumab in OI in December 2025.candidate.

Comparison of three months ended MarchJune 31,30, 2026 and 2025

The following table sets forth Mereo’s results of operations for the three months ended MarchJune 31,30, 2026 and 2025.

Research and development expenses (“"R&D") expenses”)

The following table sets forth our R&D expenses by product development program for the three months ended MarchJune 31,30, 2026 and 2025.

Total R&D expenses increaseddecreased by $0.8$3.6 million, from $3.9$5.4 million in the three months ended MarchJune 31,30, 2025 to $4.7$1.8 million in the three months ended MarchJune 31,30, 2026.

The increasedecrease was primarily due to increasesreductions of $1.8$2.6 million in R&D expenses for setrusumab,setrusumab partiallyand offset by reductions of $0.9$1.0 million in R&D expenses for alvelestat.

The increasedecrease in program expenses for setrusumab was primarily driven by recognition of a $2.3 million payable for our share of certain costs related to the cancellation of manufacturing slots by Ultragenyx, partially offset by reductions of, and delays to, investment in manufacturing and ongoing activities, including medical affairs activities in Europe during the three months ended MarchJune 31,30, 2026.

The decrease in program expenses for alvelestat was primarily due to the completion of activities undertaken in preparation for the potential Phase 3 study in the three months ended March 31,during 2025.

a)General and administrative expenses decreased by $0.3 million, from $5.5 million in the three months ended June 30, 2025 to $5.2 million in the three months ended June 30, 2026. The decrease was primarily due to reductions of approximately $2.2 million driven by delays to investment in pre-commercial activities to lay the foundation for the potential commercial launch of setrusumab in Europe, and other realized cost savings. These decreases were partially offset by the recognition of a $1.9 million reduction in expenses in the three months ended MarchJune 31,30, 20262025 for amounts received from our depository to reimburse certain expenses incurred by us in respect of our ADR program, whereas the corresponding amount in the priorcurrent year was recognized in the three months ended JuneMarch 30,31, 2025;2026.

b)General reductionsand ofadministrative approximatelyexpenses $1.4decreased by $3.5 million, from $12.8 million drivenin bythe six months ended June 30, 2025 to $9.2 million in the six months ended June 30, 2026. The decrease was primarily due to delays to investment in pre-commercial activities to lay the foundation for the potential commercial launch of setrusumab in Europe, if approved, and other realized cost savings.

Interest income decreased by $0.3$0.6 million, from $0.7$1.2 million in the threesix months ended MarchJune 31,30, 2025 to $0.3$0.6 million in the threesix months ended MarchJune 31,30, 2026, principally due to a combination of lower interest rates earned and lower average cash and cash equivalents balances in the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025.

Interest expense decreased by $0.2 million, from $0.2 million in the threesix months ended MarchJune 31,30, 2025 to less than $0.1 million in the threesix months ended MarchJune 31,30, 2026. The decrease was principally due to the conversion of convertible loan notes in February 2025, following which the Company had no significant remaining interest-bearing liabilities.

The total change in the fair value of warrants in the threesix months ended MarchJune 31,30, 2026 was an unrealized gain of less than $0.1 million, compared to an unrealized gain of $0.4$0.3 million in the threesix months ended MarchJune 31,30, 2025. The unrealized gain in both periods was primarily due to the impact of decreases in the price of the Company’s ADSs on the value of the warrant liabilities.

The net foreign exchange gain for the threesix months ended MarchJune 31,30, 2026 was $1.6$1.3 million, compared to a loss of $2.8$8.1 million for the threesix months ended MarchJune 31,30, 2025. This change primarily reflects the impact of a strengthening in the value of U.S. dollars when translating U.S. dollar balances into our functional currency of pound sterling in the threesix months ended MarchJune 31,30, 2026, compared to a significant weakening of U.S. dollars in the threesix months ended MarchJune 31,30, 2025.

The benefit from research and development tax credit decreased by $0.1$0.7 million, from $0.9 million in the six months ended June 30, 2025 to $0.2 million in the threesix months ended MarchJune 31, 2025 to $0.1 million in the three months ended March 31,30, 2026. This decrease reflects a lower level of qualifying expenditure in the threesix months ended MarchJune 31,30, 2026 than in the threesix months ended MarchJune 31,30, 2025.

Other comprehensive (loss)/income – Foreign currency translation adjustments

The foreign currency translation adjustment for the threesix months ended MarchJune 31,30, 2026 was a loss of $1.7$1.5 million, compared to a gain of $3.6$10.2 million in the threesix months ended MarchJune 31,30, 2025. This change primarily reflects the impact of a strengthening in the value of U.S. dollars when translating pound sterling functional currency balances into our presentational currency of U.S. dollars in the threesix months ended MarchJune 31,30, 2026, compared to a significant weakening of U.S. dollars in the threesix months ended MarchJune 31,30, 2025.

Under the current business plan and cash flow forecasts, and in consideration of our ongoing research and development efforts and our general corporate funding requirements, we anticipate that our current on-hand cash resources will extend into mid-2027.late 2027. However, we will need additional external funding to complete our development plans and potentially commercialize selected rare disease products. We plan to fund our operations through cash on hand and a combination of non-dilutive funding sources, public or private equity or debt financing or other sources.

In addition, we enter into contracts in the ordinary course of business with CROs, CMOs, and other vendors, including Ultragenyx for the manufacture of setrusumab as described in our 2025 Annual Report in “Item 1. Business—Material Agreements—Agreements with Ultragenyx for Setrusumab”, to assist in the performance of its research and development activities and other services and products for operating purposes. The contracts with CROs generally provide for termination on notice, and therefore are cancelable contracts. We have no manufacturing commitments with CMOs as of MarchJune 31,30, 2026 and December 31, 2025.

Comparison of the threesix months ended MarchJune 31,30, 2026 and 2025

The table below summarizes our cash flows (used in)/provided by operating, investing and financing activities for the threesix months ended MarchJune 31,30, 2026 and 2025.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $4.3$10.4 million, a decrease of $4.0$5.6 million from $8.3$16.0 million in the threesix months ended MarchJune 31,30, 2025. This decrease is principally due to lower cash bonus payments of approximately $2.0 million, receipt of $1.9 million from our depository to reimburse certain expenses incurred by us in respect of our ADR program and lower net operating cash operating paymentsflows of approximately $1.2$4.7 million.million, reflecting reduced R&D and General and administrative expenses in the period. These decreases were partially offset by receipt of $1.1 million in R&D tax credits in the threesix months ended MarchJune 31,30, 2025 with no similar amount received in the threesix months ended MarchJune 31,30, 2026.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 and 2025 were $0.3 million. In both periods, theseThese cash flows primarily relate to payments to acquire intangible assets in both periods.

Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 was less than $0.1 million, compared to net cash provided by financing activities of $0.4$0.3 million in the threesix months ended MarchJune 31,30, 2025. The decrease primarily represents the $0.5 million received upon exercise of the 2020 Novartis Warrants in the threesix months ended MarchJune 31,30, 2025.2025, net of transaction costs.

As of MarchJune 31,30, 2026, we had an accumulated deficit of $507.5$514.5 million. We expect to continue to report significant operating losses for the foreseeable future as we continue our research and development efforts and seek to obtain regulatory approval of our product candidates and any future product candidates we develop.

We expect that our existing cash and cash equivalents will enable us to fund our currently committed clinical trials, operating expenses and capital expenditure requirements into mid-2027.late 2027. We have based these estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development of our product candidates and any future product candidates and because the extent to which we may enter into collaborations with third parties for development of any of our product candidates is unknown, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates. Our future capital requirements will depend on many factors, including:

the costs, timing, and outcome of regulatory review of our product candidates, including post-marketingadditional data or studies that could be required pre- or post-approval by regulatory authorities;

the timing and amount of revenue, if any, received from milestones, royalties or direct commercial sales of our product candidates;

the performance of our collaborators and partners under the existing agreements on setrusumab, alvelestat, vantictumab, leflutrozole and navicixizumab;