On Thursday, Mereo BioPharma Group's (NASDAQ:MREO) stock price target was raised to $6.00 from the previous $5.00 by Needham, while the investment firm maintained a Buy rating on the stock. The adjustment comes as Mereo progresses with its clinical studies, particularly the Orbit study of setrusumab for Osteogenesis Imperfecta (OI), which is on track to complete enrollment in the first quarter of 2024.
The company has also updated its timeline for the complete enrollment of the Cosmic study, which now aims for the first half of 2024, a revision from the initially projected first quarter. Mereo BioPharma is actively engaging with payers regarding reimbursement and has identified approximately 10,000 patients across the EU5 who could potentially benefit from setrusumab treatment.
Mereo has reached an agreement with the FDA on the primary endpoint for its pivotal study of alvelestat, using the SGRQ Total Score. The proposed design for this pivotal study is expected to be submitted within the first half of 2024, with the trial anticipated to start by the end of 2024, contingent upon securing a strategic partner.
The company concluded the year 2023 with a cash position of $57 million, which is forecasted to fund operations into 2026. This financial runway is expected to cover the company past significant readouts in OI. The analyst's optimism is reflected in the raised price target, which is attributed to the increased launch expectations for setrusumab in treating OI.
InvestingPro Insights
In light of Mereo BioPharma's (NASDAQ:MREO) recent developments and the analyst's revised price target, a few key metrics from InvestingPro provide additional context for investors. The company's market capitalization stands at approximately $412.99 million, indicating a notable presence in the biopharmaceutical sector. Despite the challenges of profitability, with a negative P/E ratio of -14.25 for the last twelve months as of Q4 2023, Mereo BioPharma holds more cash than debt on its balance sheet, which is a positive sign of financial stability.
InvestingPro Tips reveal that Mereo BioPharma's stock is currently in oversold territory according to the Relative Strength Index (RSI), suggesting potential for a rebound. Moreover, the company's liquid assets exceed its short-term obligations, providing some operational cushion. However, analysts do not anticipate the company will be profitable this year, reflecting the inherent risks in the biopharmaceutical industry. For investors looking to delve deeper into Mereo BioPharma's financials and forecasts, there are additional InvestingPro Tips available, which can be accessed with a special offer: use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
With a strong return over the last year, as evidenced by a 295.91% one-year price total return, and a significant price uptick over the last six months, Mereo BioPharma's stock performance has been noteworthy. This performance aligns with the company's ongoing clinical trials and strategic planning for its pipeline products. For more detailed analysis and tips, including 11 more that are available on InvestingPro, investors can explore the full suite of tools and insights.
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