Novartis Takes Equity Stake in New Company Mereo BioPharmaBy
Novartis has spun out three clinical assets for an equity stake in a newly formed pharmaceutical company, Mereo BioPharma Group Ltd, a UK-based specialty biopharmaceutical company focused on rare diseases. The deal involves the following drug candidates: BPS-804 for improving bone density in brittle bone syndrome, an orphan disease; BCT-197 for treating acute exacerbations in chronic obstructive pulmonary disease; and BGS-649 for obese men with hypogonadotrophic hypogonadism to normalize testosterone levels.
Under the agreement, Novartis will have an equity stake in Mereo and will share in the success of the development of these compounds, including a share on milestones and royalties on future commercial sales. Mereo has secured $119 million from UK institutional investors, Woodford Investment Management and Invesco Perpetual. In addition, Novartis, through the shares issued in consideration for the acquisition of products, will hold an equity stake in Mereo and intends to make a cash investment in Mereo in future financings, according to Mereo.