U.S. stock futures edge higher; earnings season continues
Investing.com - JPMorgan has reiterated an Overweight rating and $7.00 price target on Mereo BioPharma Group (NASDAQ:MREO) following news about the company’s phase 3 ORBIT trial of setrusumab in osteogenesis imperfecta. According to InvestingPro data, analyst consensus remains highly bullish with targets ranging from $6.01 to $10.02, suggesting significant upside potential from current levels.
Ultragenyx and Mereo announced the trial is progressing to final analysis, expected around the end of the year, after not meeting criteria at the interim analysis stage. MREO shares fell approximately 35% on the news. Despite the sharp decline, InvestingPro data shows the company maintains a strong financial position with more cash than debt and a healthy current ratio of 8.92x.
JPMorgan considers this market reaction an overreaction, noting the trial is continuing to final analysis with readout anticipated around year-end 2025. The firm had previously viewed success as possible at either the mid-year interim analysis or year-end final analysis. InvestingPro subscribers can access additional insights through the comprehensive Pro Research Report, which includes detailed analysis of the company’s financial health, currently rated as ’FAIR’ by InvestingPro’s proprietary scoring system.
The Data Monitoring Committee reported that setrusumab demonstrated an acceptable safety profile in the trial. At the time of final analysis, all patients will have been on therapy for at least 18 months, with a significance threshold of p-value
JPMorgan maintains its positive outlook on the final analysis based on prior data, longer follow-up period, and a more fracture-susceptible patient population that should increase separation between the setrusumab arm and placebo.
In other recent news, Ultragenyx Pharmaceutical (NASDAQ:RARE) Inc. and Mereo BioPharma Group plc announced that their Phase 3 trials evaluating UX143 (setrusumab) for osteogenesis imperfecta will continue to final analysis. The Data Monitoring Committee reviewed interim data from the Orbit study and determined that UX143 has an acceptable safety profile, recommending the study proceed to completion. This Phase 3 Orbit study, involving patients aged 5 to 25 years, has not reached the threshold for early stoppage, prompting continuation as planned. The companion Cosmic study, testing the drug in younger children, will also proceed without interim data analysis. Both studies are set to conclude with final analyses after patients have been on therapy for at least 18 months. Ultragenyx’s CEO expressed confidence in the treatment’s potential benefits, despite hopes for an early conclusion to the study. The Orbit study’s primary focus is on the annualized clinical fracture rate, while the Cosmic study compares setrusumab to existing therapy options. The trials are significant as there are currently no globally approved treatments for osteogenesis imperfecta.
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