MREO Stock Forecast & Price Target

Mereo BioPharma Group PLC demonstrates a positive outlook due to its portfolio of late-stage clinical product candidates targeting rare diseases, particularly setrusumab and alvelestat. The establishment of a relationship between increased bone mineral density (BMD) and reduced fracture rates reinforces confidence in the potential efficacy of setrusumab, as evidenced by a significant 22% increase in BMD observed in Phase II trials. Furthermore, the company's robust study design, with significantly higher powering for final analysis, may support favorable outcomes despite prior interim setbacks.

Mereo BioPharma Group is facing increased uncertainty regarding the launch timing of its product candidates, particularly setrusumab for osteogenesis imperfecta, prompting a reduction in the price target from $7 to $5. Despite maintaining a positive view on the long-term success probability of setrusumab, the company is likely to experience downward pressure on stock performance due to this heightened uncertainty. Additionally, the significant allocation of approximately 80% of alpha spend reserved for the final analysis underscores the risks associated with the company's remaining clinical development milestones.