Welcome, everyone. It's my pleasure to start our fireside chat with Mereo BioPharma. We're very pleased to have Denise Scots-Knight, CEO, and Christine Fox here with us to give us an update. Thanks so much. Thank you, Joe. It's really great to be here. Thanks for the weather, too. It's wonderful. Absolutely. We do what we can. So why don't we start by having you give us a quick level set of the current state-of-the-art at Mereo and your different programs here, and then we will dive into each. OK. Let's start with setrusumab for osteogenesis imperfecta. As you know, the phase III fully enrolled, w e had the first interim analysis earlier this year. The second interim analysis is coming up mid-year. I'm sure we're going to dive into that. The second program, alvelestat for alpha-1 antitrypsin deficiency, we are really getting the program ready for the phase III, doing a lot of work, site feasibility, and that kind of thing. We are well into a partnering process there. Great. All right. Thank you. Let's start with setrusumab. Can you help us contextualize the purpose of these interims and the impact on Mereo? Yeah, let's go through the interims. We had the interim one analysis, which was done when all the patients had had at least between six and eight months' therapy. Just as a reminder, the original, so the study design, the study is designed to show a 50% treatment effect with 80% power at 18 months. However, these interim analyses were put in because there is a placebo arm. So there's two reasons to put these interim analyses in. One is there's a placebo arm, and we wanted to move these highly fracturing patients onto setrusumab as soon as possible. That's one reason, the clinical reason. The second reason is because, obviously, it makes business sense if we have overwhelming efficacy to get to that filing and launch as soon as possible. The first interim analysis was done, as I mentioned, when the patients had had between six and eight months' treatment, at least. Some had had longer than that. We had to hit a p-value of 0.001. It was 2% use of the alpha. That would have needed, based on the power, a treatment effect which was larger than the 67% reduction in fracture that we saw in the phase II, based on the same baseline AFR, annualized fracture rate, in the placebo arm. It was a very high bar, as it needed to be, to stop the study so early. As you know, the regulators like more data, not less. More time, not less. It was a shock. We did not expect to meet it. Indeed, when the DMC met, they did n't get in touch with us to say that we had met it. We moved on now to IA-2. The study continued in a blinded fashion. Now we are coming on to IA-2, interim analysis two. For interim analysis two, all the patients have had at least 12 months' treatment. We already have patients who are out at 18 months. It is last patient, last plus 12 months' treatment. Obviously, we have got a lot longer for the treatment effect to kick in. Remember, in the phase II, you know, you have that you need to build the bone. We estimate it could take two to three months for the patients to have built sufficient bone for the treatment effect to kick in. We have a lot longer period over that initial two to three-month treatment period. We'll have had a lot more events and, hopefully, reduced variability. We' re using, instead of 2% of the alpha, 20% of the alpha. Yeah. If we hit that, great. We're off to the races. If we don't, one of the reasons that we may not hit this, and we estimate that we would need around a similar treatment effect to what we saw in the phase II. However, we could have that same treatment effect but still not hit this p-value of 0.01. One of the reasons for that is the variability. We don't know what the variability looks like between the arms. That could be one of the reasons that we don't hit it. If we don't hit it, it doesn't mean that we don't have a very good treatment effect. There are factors that go into why we may not hit it. Of course, we hope to, and we have a good shot. If we don't, it doesn't mean we've got a very small treatment effect. I think that's really important to understand. Right. If we don't hit it, we then go into the 18-month time point. We've still got 79% of the alpha for that last 18-month time point, which would be in Q4. Right. Super helpful. Thanks for that perspective. Is there any way to contextualize the variability and magnitude of effect size that's required in order to hit IA-2? Yeah. You see, we don't know the variability. OK, so that's the unknown. It was low in the original study, right? I mean, very few fractures equal low variability. Yes. But you've also got the placebo arm here, right? So that's a big difference between the phase II and the phase III. In the phase II, we were comparing it to pretreatment, post-treatment versus pretreatment. Now, clearly, here, it's compared to placebo. So I think the one thing is there's no doubt that if you think about the phase II, in the phase II, at the six-month data point, we had a 67% treatment effect compared to pretreatment. And we had a p-value of 0.04. Now, with time, at the 14-month time point, we had the same treatment effect but a p-value of 0.0014. So the signal with time got stronger. Right. Time is important here. Time is very important. Time gives, hopefully, with time, what we should be seeing is separation of the curves between placebo and active, tightening of that variability. OK. The variability is an unknown. OK. Super helpful. One of the questions we get a lot is based partly on mechanism and how this drug could be helpful for patients that do not just have a haploinsufficiency but have low-quality bone due to the type of their mutation. Can you help us contextualize the benefit, like, at a biological level for folks that wonder about that? Yeah. I mean, we have a lot of questions about this. This question, since we took the program over from Novartis, we've had this question. The theory is, OK, with setrusumab, you're not fixing the collagen. Therefore, why should this work to reduce fractures? Because the key problem is the collagen. That's the theory. Right. You are just adding low-quality bone. And you're just adding bone. The data speaks for itself, OK, first of all. It turns out that in these patients, the collagen, so there are a group of type I patients who have low collagen, not mutated collagen. That's number one. What it turns out is in these patients, actually, the collagen, if you build strong bone in the phase II ASTEROID, what we showed in adult patients is that not only are we building bone, we're building stronger bone. We were able to show a statistically significant increase in bone stiffness and bone failure load, which has translated into reduction in fractures. So it turns out, although the collagen is mutated, by building bone with a mechanism like setrusumab, which is bone building but also inhibiting bone resorption, the collagen is good enough. It's not perfect, but it's good enough to support, with that mechanism of action, a really strong impact on fractures. I think the other thing to take into account is not just the fractures, the reduction in fractures that we're seeing. As you remember, in the phase II, we saw changes, really profound changes in mobility. We showed the picture of the young six-year-old boy who was able to get up. He started in his wheelchair. He transitioned to a walker. And then he was playing in the playground, unaided. It's about fractures, but it's also about those other profound effects that we're seeing with setrusumab. Right. Right. Yeah, that's important. I guess the Orbit study is comparing patients to placebo. Yeah. Cosmic has an active control, which a lot of people currently receive. How should we think about the hurdle rate in both of these trials, given bisphosphonates might, either being washed out, but there might be some activity left over based on how long it's taken for people to be randomized. But then in Cosmic, there seems to be a higher hurdle. And it's really difficult for us to envision how high that hurdle is. Yeah. Let's just look at why we're doing two studies. The 5 to 25-year-olds, the Orbit study, as you say, that's comparing, it's two-to-one randomization, comparing setrusumab to placebo. The patients, many of them were on bisphosphonates, but they have a short washout period from their bisphosphonates. It's compared to placebo. That's in both arms. Now, bisphosphonates take many, many months, maybe years, to wash out. You'll have that impact in both of those arms, in both the setrusumab and the placebo arm. The main point here is that these patients were, many of them were already on their bisphosphonates but were fracturing. Right. They've entered the study. That's Orbit. As we look at Cosmic, Cosmic, far fewer patients. We're going down between two and six-year-olds. In Cosmic, we couldn't do a placebo-controlled trial. You couldn't, with these highly fracturing young children, put them on placebo. It had to be compared to setrusumab. But the purpose of Cosmic is really to get some good safety data down to that two-year-old group so we can start treating these patients as early as possible. Cosmic is a much lower power than Orbit. What we're looking for there is a difference between setrusumab and bisphosphonates. And it'd be great to show us that significant difference, but we're looking for a numerical difference in fracture reduction. The fracture rates, the baseline rate should be much higher in Cosmic. The base. That could give power. It could give more power. The baseline fracture rates should be higher in these very young children. We are looking for a numerical difference and good safety data to allow us to go down to this very young age. Right. Bisphosphonates, if you talk to the physicians, they will tell you that they do believe bisphosphonates do have an impact on fractures. The studies are all academic. They're all over the map in terms of fracture reduction, in terms of different endpoints, whether they're open label, whether they're comparing, they've got a comparator arm. It is very hard to get hold of consistent bisphosphonate data. Yeah. There is nothing else available, so the physicians do use them. Neridronate is approved in Italy. That was on the basis of a very small study. Right. I go back to the original, which is these patients, they're taking bisphosphonates. They're still fracturing. Do you have a sense of how much bisphosphonates reduce the fracture rate in different ages and types of patients? Yeah. Collecting the data on that is really tough to get consistency across all of those different subsections. Right. We'll learn that. Yeah. It is something that we are looking at. There are two centers in Italy where they have a significant amount of longitudinal data. They start to treat the children as young as six months, and they have tracked them out. We are digging into all of those data. As yet, there is no consistency. Right. Which of these studies is more important? It feels like people are treated with bisphosphonates. Cosmic's pretty important, but Orbit is the main study. Orbit is the main study. We're looking at the sole impact of setrusumab versus placebo. I go back to the bisphosphonates. They use because there's nothing else available. We had a young Belgian chap who came in to talk to us for Rare Disease Day two weeks ago. He is a type III individual. He was on bisphosphonates from when he was six months old. He still has had 70 fractures. Amazing. Averaging at least about around five fractures a year. Wow. He’s been on bisphosphonates since he was six months old. He's not in the study. No, he's not in the study. But yes. OK. Yeah, that's illuminating perspective. I go back to my original question. Is there any way to contextualize what kind of a reduction? I guess you answered this with the second IA, the reduction in fracture rate. It depends on the baseline rate, and it depends on the variability. It depends on the timing. Did you say that it's kind of in the zone of what we saw in phase I? It's in the phase II, yeah. It's in the zone. Yeah. If the variability is, if it's tight, if the curves are tight, we've had time for the curves to separate. Because remember, we're using the mean, right? It needs to be tight data. If we get good, tight data, and we have a 67% treatment effect, then we've got a good shot with IA2. There's a chance. OK. Super helpful. Appreciate that perspective. What are you doing on the ground to size up and prepare for the market opportunity, assuming setrusumab is successful? Yeah. We have Med Affairs and Med Access contractors in each of the key EU5. We have actually, I think we talked about last time, we've identified 5,000 pediatric patients and 5,000 adult patients in those key EU5 who could be eligible for therapy. We're rolling that out to Benelux and Scandinavia. I think the other important thing is that we've been mapping these centers. What we found is that in these key EU5, you tend to have between three and five key expert treatment centers. Then anything from 10-30 other centers where these patients are treated. It is very concentrated. That is why we believe with an in-the-field force of 65 at peak, we will be able to access those patients. Yep. Makes sense. Yep. Makes sense. We have really mapped it out very carefully. The other thing we are doing to support the pricing and reimbursement, we 've been in front of NICE and G-BA for scientific advice. We have the groundwork for what we need to do in terms of pricing and reimbursement. We have two programs, one called IMPACT, which is our survey that we did in collaboration with OIFE and the other OI foundations. We had over 2,500 responses to that. There is a lot of data on the impact of OI on patients, on their caregivers, and the physicians who treat them. We are pulling all that data together. We have a huge publications rollout plan there. We also have SATURN, which is collecting real-world evidence and looking at questions like you just asked about the bisphosphonates. As I mentioned, we're working with these two centers in Italy where they have this wealth of information on longitudinal data treating patients with bisphosphonates from very young to adulthood. We're pulling all that data out. Again, a very detailed publications plan around this. A lot of work going on behind the scenes. Great. How are you thinking about treatment duration? Yeah. Yeah, that's a really good question, Joe. We get asked about this a lot because people say to us, oh, romosozumab in osteoporosis, it's used for 12 months. The patients switch to bisphosphonates to maintain the effect. The reason for that is that in osteoporosis patients with romosozumab, you see a waning effect of the treatment. The slope of the line for building BMD in the first six months is higher than in the second six months. You start to see a flattening of the curve after 12 months. That's why romosozumab in osteoporosis is stopped after 12 months. In OI, we haven't seen that. We haven't seen that waning effect. We now have the patients in the phase II. There were 24 patients who enrolled into the phase II. Most of those patients now are out 24 months and still on treatment and doing very well. We do believe that this is going to be a chronic therapy. We also showed in ASTEROID in the adult study that that was a 12-month study. They were treated with setrusumab for 12 months. If you then stop treatment after 12 months, they started to lose that BMD that they gained. We have a lot of evidence that's building that this really needs to be a chronic therapy in OI as compared to osteoporosis, different disease. As part of the open label extension studies, we'll be looking at different maintenance schedules, for example. Should it be every other month rather than every month once you've got to a certain Z-score or a certain BMD score? OK. Chronic therapy for sure. OK. Very helpful. Can we switch gears to alvelestat? Of course. I'm amazed that we don't get more of a focus on this program given the molecule and what it is and what it's related to. You're developing this in Alpha-1. It's been a very busy space. Yep. You're focused on the lung disease component. Yep. Can you talk a little bit about the data that you have and what additional data that you need to generate in order to get this over the finish line? Yep. The data we have from two phase II studies, the ATALANTa study and the ASTRAEUS study. We did biomarkers, so desmosine as a biomarker of lung function. We showed a static change or reduction in desmosine, so hopefully translating into improvement. Importantly, the key data are that we also showed improvements in the St. George's Respiratory Questionnaire, especially the activity domain of that questionnaire. Also, we showed when we pulled the two phase II studies together, actually a reduction, 50% reduction in exacerbations. These sorts of outcomes data that we showed with alvelestat in this phase II, those have not been shown with augmentation. The desmosine, yes, although we saw a bigger reduction than they see with augmentation. These outcomes of SGRQ exacerbations not being shown with augmentation. I mean, 50% is a big reduction. Yeah. It wasn't static, but we pulled, it wasn't powered for this, but we pulled the data. And what was great about those data is that it was across the GOLD category. So we enrolled a range of patients. This is another important point compared to augmentation. We enrolled a range of patients with FEV1 that was up to 85%, 90% of predicted, down to the more severe patients where it's more like 50%. What was great about the exacerbation data was, as you know, they're categorized by GOLD category. As you go up in GOLD category and the patients are more severe, so have less of their lung function, you see an increase in the placebo arm in the number of exacerbations. That 50% effect was maintained. So quite striking data. Yeah. Interesting. Moving on to the phase III, we've agreed the phase III endpoints with both the FDA and the EMA, as you're aware. FDA focused on feels and functions. We're going to be doing primary endpoint as SGRQ, hoping to replicate, better replicate the data we saw in phase II. For the EMA, they're focused on lung function by, so lung density by CT as a marker of a biomarker for FEV1. We have those two independent primary endpoints, a study that is around 220 patients for 18 months. What's really important and differentiates our program from the others that are looking at the lung disease is that we plan to enrich for these earlier stage patients. We'll be enrolling patients who have very little of their lung, they have to have emphysema, they have to be genetically diagnosed. However, they can have 90% to 95% of their predicted FEV1 to enroll in the study. We're going to have this range of earlier stage down to the more severe patients. If you look at the clintrials.gov and you look at a lot of the studies in the lung disease right now, the top end is around 70%. Right. Yeah. You're targeting relatively healthy patients. Looking at prevention of disease progression. Because if you can impact those earlier stage patients before they start to decline, you can't bring that lung function back. If you can really target these earlier stage patients, that is going to be very hugely differentiating. Interesting. I know that you have agreed to be able to have like a relaxed. P-value. P-value. With the EMA. Would help with a couple endpoints. Yes. How does that work with the requirement to hit, what is the requirement to hit each of those endpoints through the FDA? With the FDA, we have to hit static normal with the SGRQ. We are looking at, we've been doing a validation of the instrument in AATD because it's used, it's very standardly used in COPD, but we've been doing validation. Static for SGRQ. As you say, for lung density by CT, the EMA has said a 0.1 may be acceptable. That's to allow us to do a shorter study. If we had to go to static of 0.05, we'd probably have to do a three-year study. OK. Great. How can you get this study going? As you know, we're in a partnering process. We're making very clear progress with this partnering process. I'm very pleased with the quality of the companies that we're speaking with. Watch this space, is what I would say. OK. We'll stay tuned. Thank you. Thank you so much for the update today. Thank s, Joe. Appreciate it. Appreciate it.