Rubric Capital Management Comments on Mereo BioPharma Updated Operating Plan

Rhea-AI Summary

Rubric Capital Management, an investment advisor owning approximately 14% of Mereo BioPharma Group plc (NASDAQ: MREO), commends the company for streamlining operations to extend its cash runway by two years. However, Mereo burnt approximately £9 million in cash in Q2, which is deemed unsustainable. Rubric emphasizes the need for active corporate governance and shareholder alignment to unlock further value, urging support for its slate of director nominees ahead of the general meeting.

Positive

• Mereo extended its cash runway by two years.
• Management has streamlined operations to preserve cash.

Negative

• Mereo burned approximately £9 million of cash in Q2, which is unsustainable.

Reiterates Urgent Need for Board Change to Maximize Value

NEW YORK--(BUSINESS WIRE)-- Rubric Capital Management LP (“Rubric”), an investment advisor whose funds and accounts collectively own approximately 14% of the outstanding equity of Mereo BioPharma Group plc (NASDAQ: MREO) (“Mereo” or the “Company”), today issued the following statement in response to the Company’s updated operating plan:

“We commend Mereo management for heeding our call for action and taking the painful but necessary step of streamlining operations in order to preserve cash. At the time of the alvelestat data release in May through today, Mereo has improved its cash runway by two years and refocused resources on its most valuable programs. Unfortunately, in the second quarter alone, Mereo burned approximately £9 million of cash, which the company clearly recognizes is unsustainable.

We do not believe this action would have been taken without Rubric’s public engagement and, while this step is encouraging, we believe there is more work that can be done to unlock value at Mereo. Mereo’s actions today confirm that our proxy contest has shaken the boardroom of Mereo off the autopilot it has been operating on for years, but this is not enough – active corporate governance paired with direct alignment with shareholders is necessary to achieve maximum value. Rubric’s slate of director nominees is highly qualified to drive further necessary change that is in the best interests of shareholders. We look forward to the general meeting and encourage all shareholders to vote in order to achieve further value enhancement led by our nominees.”

Rubric’s slate of highly qualified director nominees includes: Annalisa Jenkins, MBBS, FRCP, Daniel Shames, MD, Marc Yoskowitz, Justin Roberts, and David Rosen.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221018006032/en/

Media:

Jonathan Gasthalter/Sam Fisher

Gasthalter & Co.

(212) 257-4170



Investors:

Okapi Partners LLC

Bruce Goldfarb / Jason Alexander

(212) 297-0720

info@okapipartners.com

Source: Rubric Capital Management LP

FAQ

What did Rubric Capital Management say about Mereo BioPharma Group plc?

Rubric praised Mereo for streamlining operations, extending its cash runway by two years, but highlighted concerns regarding cash burn.

How much cash did Mereo burn in the second quarter?

Mereo burned approximately £9 million in cash during the second quarter.

What is Rubric Capital Management's stake in Mereo?

Rubric Capital Management owns about 14% of the outstanding equity of Mereo BioPharma Group plc.

What is the significance of the upcoming general meeting for Mereo BioPharma?

The general meeting is crucial as Rubric is advocating for its director nominees to drive further necessary changes in Mereo.