Wednesday - Needham has raised the price target on Mereo BioPharma Group (NASDAQ:MREO) shares to $7.00 from the previous $6.00, while maintaining a Buy rating.
The adjustment follows the release of encouraging long-term results from the Phase II segment of the Orbit study, which assesses the efficacy of setrusumab in treating osteogenesis imperfecta (OI), a genetic bone disorder.
The study's findings revealed a stable median annualized fracture rate at 0.00, marking a 67% reduction, with at least 14 months of follow-up. This duration extends 8 months beyond the previous update.
Additionally, bone mineral density (BMD) and Z-scores have shown continued improvement, suggesting an enhancement in overall bone strength. Setrusumab has also continued to be well-tolerated, with no new safety concerns reported.
The analyst from Needham highlighted that the key near-term catalyst for Mereo BioPharma's stock is the anticipated interim analysis of the Phase III portion of the Orbit study, which is expected by the end of 2024. The analyst believes that the updated results from the Phase II study further mitigate the risks associated with the ongoing pivotal Orbit and Cosmic studies.
The positive outlook from Needham suggests confidence in the drug's development and its potential market impact. The firm's reiterated Buy rating and increased price target reflect an expectation of Mereo BioPharma's stock opening strongly in the market today.
In other recent news, Mereo BioPharma has been the subject of increased optimism due to developments in its clinical trials. Both BTIG and Needham have raised their price targets on the company's shares.
BTIG raised its target from $4.00 to $6.00, citing the completion of enrollment for the Phase 3 Orbit and Cosmic trials of setrusumab, a treatment for osteogenesis imperfecta. Needham also raised its target from $5.00 to $6.00, as Mereo progresses with its clinical studies, particularly the Orbit study of setrusumab.
These developments come as Mereo BioPharma has updated its timeline for the complete enrollment of the Cosmic study, aiming for the first half of 2024. The company has also reached an agreement with the FDA on the primary endpoint for its pivotal study of alvelestat. Furthermore, Mereo BioPharma concluded the year 2023 with a cash position of $57 million, which is expected to fund operations into 2026.
These are recent developments that investors should be aware of, as they could significantly impact the company's future prospects. The raised price targets by BTIG and Needham reflect heightened expectations for setrusumab's potential in treating osteogenesis imperfecta.
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