Mereo BioPharma Group Plc (NASDAQ:MREO) Beats Q3 2025 EPS Estimates, Maintains Cash Runway into 2027

Mereo BioPharma Group Plc (NASDAQ:MREO) reported its third-quarter 2025 financial results, delivering an earnings per share figure that came in ahead of analyst expectations, though the company continues to operate without generating revenue as it advances its clinical-stage pipeline.

Earnings and Revenue Versus Estimates

For the quarter ended September 30, 2025, Mereo BioPharma reported a net loss of $7.0 million, which resulted in a loss per share of $0.01. This EPS figure was notably better than the analyst consensus estimate of a $0.0248 loss per share. On the revenue front, the company reported no revenue for the quarter, which fell short of the $11.9 million that analysts had been anticipating.

Key financial metrics from the report include:

• Reported EPS (Non-GAAP): -$0.01
• Analyst EPS Estimate: -$0.0248
• Reported Revenue: $0.0 million
• Analyst Revenue Estimate: $11.9 million

The discrepancy between the revenue estimate and the actual figure of zero appears to stem from the company's pre-revenue status. The provided analyst sales estimates for the upcoming quarter and full year suggest expectations of future revenue generation, which did not materialize in Q3 2025.

Market Reaction and Financial Position

The market's reaction to the earnings release has been muted in immediate after-hours trading. However, the stock has faced significant pressure over recent weeks, declining approximately 11.5% over the past month. This suggests that while the narrower-than-expected loss may be viewed positively, investors are likely focusing on the broader clinical and financial timeline.

The company's financial position remains a key point of focus. Mereo reported cash and cash equivalents of $48.7 million as of September 30, 2025. Management reiterated that this balance is expected to fund its currently committed clinical trials, operating expenses, and capital expenditure requirements into 2027. This provides a clear runway for upcoming milestones without an immediate need for additional financing.

Pipeline and Corporate Highlights

The earnings press release heavily emphasized progress across Mereo's rare disease portfolio. The most significant near-term catalyst is setrusumab for osteogenesis imperfecta (OI). Data from the pivotal Phase 3 Orbit and Cosmic studies, conducted by partner Ultragenyx, are expected around the end of 2025. The company is actively engaged in pre-commercial efforts for setrusumab in Europe, where it holds commercial rights.

Other key pipeline developments include:

• Alvelestat (AATD-LD): Activities are ongoing to initiate a global Phase 3 pivotal study, and the company continues partnership discussions for this asset.
• Vantictumab (ADO2): Following a partnership with āshibio in August 2025, Mereo retained European commercial rights for this program in autosomal dominant osteopetrosis type 2.

Outlook and Analyst Expectations

The company's provided cash guidance, extending into 2027, offers clarity on its operational footing. When comparing this operational outlook to financial projections, analysts are estimating sales of $22.0 million for the fourth quarter of 2025 and $28.4 million for the full year. The realization of these sales estimates would mark a significant inflection point for the company, transitioning it from a clinical-stage entity to one with commercial revenue.

Conclusion

Mereo BioPharma's third-quarter results present a mixed financial picture. The company beat EPS estimates with a narrower loss and maintains a solid cash position, yet it remains in a pre-revenue state. The substantial sell-off in the stock over the past month indicates that investor sentiment is heavily tied to the clinical success of its lead candidate, setrusumab, with the late-2025 data readout serving as a critical near-term catalyst. The company's value proposition continues to hinge on the successful execution of its clinical programs and the eventual transition to a commercial-stage organization.

For a detailed look at future earnings estimates and historical performance, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.