Conference Transcript - MREO 2026-06-02

Maury Raycroft, Analyst — Jefferies

Hi, everyone. My name is Maury Raycroft, and I'm one of the biotech analysts at Jefferies. I'm happy to introduce and welcome Denise Gotsknight, CEO of Moreo, and John Lowecki, the CSO of Moreo. Thanks so much for joining us today.

Dr. Denise Scots-Knight, CEO

Thank you so much for hosting us today, Maury.

Maury Raycroft, Analyst — Jefferies

And we're going to do fireside chat format, so maybe for those who are new to the story, if you can give a one-minute intro to the company.

Dr. Denise Scots-Knight, CEO

Sure. Thank you. So, Moreo, we're a rare disease company. We have two late-stage programs, citruzumab for osteogenesis imperfecta, which is partnered with Ultrogenics, and we recently announced the phase three data, and we're currently having regulatory interactions, which I know we're going to come on to. And then second program is alveolastat for alpha-1 antitrypsin deficiency. This is an oral neutrophil elastase inhibitor, which is phase 3 ready. And then finally, we have a program for osteopetrosis, fantictimab, which is partnered with Ashibio. And we have EU rights in that partnership. And that is being readied for phase 2.

Maury Raycroft, Analyst — Jefferies

Got it. Yeah, it's a good overview of the company. um you mentioned uh the one of the key updates in your recent first quarter press release is the statement that regulatory interactions have been initiated to determine if there's a path forward for such a mob um understanding you can't disclose specifics beyond the press press release can you describe at a high level the typical process and expected timeline for such regulatory discussions yeah so i think the first thing to understand is that each of these um processes you know whether and we are talking to multiple agencies so so this is not just the FDA but we're talking about the EMA the MHRA but the thing about these processes that I think everybody needs

Dr. Denise Scots-Knight, CEO

to understand is that they take several months so for example if you have a type c meeting or in Europe if you have scientific advice meeting you know that is can typically be two to three months from requesting the meeting to actually having the meeting so they do take time and obviously we didn't succeed in meeting the primary endpoints so that makes these conversations much more complex and likely to take more time but what I can say is that we're expecting what we've said is that we will provide updates once we have clarity you know what we don't want to do is drip feed the process um and so we're looking to provide real a real clear picture of of you know if there is a path forward or not and what it looks like and so we're expecting to provide those updates maybe from individual agencies or multiple um before the end of the year so at some point during the next six to seven months got it okay that's that's really helpful so um yeah you have those conversations.

Maury Raycroft, Analyst — Jefferies

You got to wait for minutes from the conversations and kind of make sure you've got everything right. There could be some back and forth there. And then you do public disclosure on it.

Dr. Denise Scots-Knight, CEO

But it is about having the clarity.

Maury Raycroft, Analyst — Jefferies

Yeah. Right. Okay. Makes sense. And you've noted that further analyses of orbit and cosmic, including patient subgroups, have been completed.

Dr. John Lewicki

Can you discuss the breadth and maybe the depth of the analyses across age groups oi severity types fracture types and bmd responders versus non-responders yeah i'll take that so as is we have and ultragenics have announced we're now focused on pediatric patients age ages two to less than 18 so that's really the focus at this point in time recall in cosmic the study that uh originally the study that enrolled the higher fracturing and younger patients ages 2 to 6. Although the original powering was lower than that of ORBIT, we nevertheless saw a 20% reduction in fractures relative to IV bisphosphonates, which are used as standard of care, although it didn't achieve statistical significance, but a pretty good trend. You know, the curve separated quite early. We also saw statistically significant improvements in BMD in both cosmic versus IV bisphosphonates and orbit versus placebo, consistent with the powerful anabolic effects of citruzumab. So over the past few months, we in Ultragenics have been focused on analyzing both pre-specified an ad hoc analyses of the data and in addition to that trying to get a handle on confounding factors that have affected the primary endpoint readout you know in terms of confounding factors in orbit despite the fact that there was stratification of based on the number of fractures we nevertheless and I I don't understand how this could happen, but we nevertheless saw a proportionally twice as many of the patients in the citruzumab arm of type 3 patients. So these are the most severely ill patients in the citruzumab arm relative to the placebo arm. So this obviously skewed fractures toward the citruzumab arm. You know, we also announced that we saw statistically significant reductions in pain in these patients, which is quite significant, and clinically significant improvements in sports and activity in these patients. You know, the changes in sports and activity, in particular, led to behavioral changes in these patients. So, in contrast to placebo patients, the citruzumab patients were doing things like karate, climbing walls, bouncing on trampolines, gymnastics, mountain biking, all of the above. Horse riding. Horse riding. which predisposed them, put them in higher risk, and predisposed them to activity-driven fractures, right? So contributed to it as another confounding factor in the analysis. You know, the patients are doing exactly what we wanted them to do. It was exactly what we hoped the drug would do, but nevertheless impacted the final outcomes, particularly since, once again, bias fractures toward the satruzumab arm. We also have examples of major improvements in mobility in the Phase 3 patients, as we saw in Phase 2, where some patients have been able to leave their wheelchairs and become independently mobile. So that's very significant. You know, we've talked about BMD, which achieves statistical significance. Alongside of that, we have measures of bone health and also bone biopsies, which really support the mechanism of action and the fact that we are building significantly stronger bone in these patients. And we also have some other positive subgroup analyses. And of course, we've mentioned the vertebral fractures, where we see about a 30 percent decrease in vertebral fractures in orbit and closer to a 60% reduction in vertebral fractures in cosmic associated with a p-value of less than 0.08. These vertebral fractures are obviously very important in the development of the young kids and something that we're focusing on going forward.

Maury Raycroft, Analyst — Jefferies

Got it. I mentioned a lot there, maybe digging into a couple of the points. So For the 2X type 3 patients in the cetruzumab arm, if you take out the type 3 patients from the study, I guess, what do you see there?

Dr. Denise Scots-Knight, CEO

I mean, we're not disclosing that sort of data at the moment, Mari.

Maury Raycroft, Analyst — Jefferies

But that's something that you're obviously.

Dr. Denise Scots-Knight, CEO

We've done a lot. I mean, there's a lot of different data analyses that have been done. And what we don't want to get into is slicing and dicing the data so that we end up with small populations. Yeah.

Maury Raycroft, Analyst — Jefferies

Yeah, that makes sense. And I guess maybe talk about just what the bone marrow density improved, or bone mineral density improved. Well, you mentioned the biopsies as well from bones. How many patients do you have biopsies?

Dr. Denise Scots-Knight, CEO

Yeah, again, I mean, those data are going to be disclosed at a medical meeting. Okay.

Maury Raycroft, Analyst — Jefferies

With the bone mineral density improvements versus control, you've highlighted the reductions in vertebral fractures and patient-reported outcome improvements. What's the feedback been from clinicians and the clinical meaningfulness of these outcomes, given that no FDA or EMA-approved therapies exist for OI?

Dr. Denise Scots-Knight, CEO

Yeah, so, I mean, what we've done at Mareo is, you know, we've spoken to a lot of clinicians in Europe about, obviously, the data that we've published. And the feedback actually has been very, very consistent. So we know that pain, you know, we did the impact survey. We know pain is the number one symptom that the patients note that really impacts on them the most. But a lot of that pain actually does come from these vertebral fractures, whether that's clinical, you know, the clinical fractures. And the clinicians have been telling us, and this is including in the UK, that actually they treat patients on the basis. So if a patient has a vertebral fracture, you know, a young child has a vertebral fracture, they will start with a single vertebral fracture, they will start bisphosphonate treatment off-label. Whereas if they have a single long bone fracture, that's not necessarily the case. And the reason that they do that is that they they want to protect the spine because these vertebral fractures can lead to, you know, the scoliosis and the kids being wheelchair bound as well. And also having one vertebral fracture can actually predispose you to having more vertebral fractures. So they're a really key component of a reason to start treating.

Maury Raycroft, Analyst — Jefferies

Got it. And is there a precedence for PROs supporting a label, even if hard endpoints like fracture claims are limited?

Dr. Denise Scots-Knight, CEO

Yeah, I mean, it's a good question. But, you know, we've talked, I've talked about pain. Pain is an important endpoint. And there are obviously, you know, other areas where pain is the endpoint. But, you know, we've got the BMD data, we've got other bone health data, and we also have these vertebral fracture data. And there are some other fracture data that, you know, we haven't disclosed yet. So we're not looking to, you know, solely rely on the PRO in these regulatory discussions.

Maury Raycroft, Analyst — Jefferies

Understood.

Dr. Denise Scots-Knight, CEO

And for outcomes from regulatory interactions, I guess, what are the range of possibilities there yeah so i i don't really want to speculate on the on the range of possibilities um so i think you know what i can say is when we do update on on these interactions uh it will be with with that clarity and um i also as we've seen with other companies what's important is we're having these multiple interact we're interacting with multiple agencies right because we've seen different with other companies in similar situations we've seen different outcomes from different agencies right so but i don't really want to speculate on the outcomes got it

Maury Raycroft, Analyst — Jefferies

okay um and when you do the update before the end of the year that's going to be uh a perspective from all the agencies or i could it just be one agency it could just be one it i mean it'll be when we get clarity. Got it. Okay. And as patients roll over into the open-label extension, what specific long-term fracture or biomarker trends are you monitoring to validate Citrus Mob's clinical profile?

Dr. John Lewicki

So the patients who enter the open-label extension, we're basically monitoring the same endpoints as we did during the double-blind treatment period. So we're looking at fractures, including vertebral fractures, all confirmed. We're looking at the PROs, such as pain comfort and sports and activity, and we're also looking at BMD and other measures of bone health. So we're really collecting the same data that we did during the double-blind treatment period. You know, while a minority of the patients move to the open-label extension at 12 months is a result of patients transitioning over as part of the rescue protocol. Most of the patients, or the rest of the patients in the study, were in the double-blind treatment period for 18 to 24 months. This includes patients who were receiving citruzumab or placebo in orbit and citruzumab or IV bisphosphonates in COSMIC. So once the patients move to the OLE, they're receiving citruzumab only. So what we basically have is we have patients who are receiving placebo and or IV bisphosphonates in the double-blind treatment period who now have effectively crossed over into a citruzumab arm. So that's going to be valuable clinical data, and we'll be looking at that in great detail. You know, I should also mention that almost all of the patients in Orbit and Cosmic have entered the OLE. And, you know, we talked previously about the Phase II data, and 22 of 24 patients still are in an OLE receiving citruzumab after about three years. And we think the fact that so many patients enter the OLE from Orbit and Cosmic and those phase two patients have stayed on citruzumab tells us something about what the patients think of the drug.

Maury Raycroft, Analyst — Jefferies

Yeah, it makes sense. And for Orbit and Cosmic, is there a certain amount of follow-up time that you want to just kind of strengthen the conversation with regulators?

Dr. Denise Scots-Knight, CEO

It's something that we're looking at at the moment. But, you know, we, if you think about it, so we reported the data out in December, end of December. So, you know, by the fourth quarter, all of these patients who've rolled over will have had at least 12 months data. So that's coming up in the fourth quarter.

Maury Raycroft, Analyst — Jefferies

Got it. Okay. Okay. And so just looking at the ORBIT study and the design types of patients that you enrolled, is there, if you had to do it all over again, I guess, would you do anything differently with the study design? Is it just a matter of having more patients, or what would you do?

Dr. John Lewicki

You know, basically, we are, you know, we are comfortable with how the study was powered and how the study was powered and how it was designed. So things like fracture adjudication were comfortable with the way that was done. You know, the rescue protocol, which did impact the number of placebo patients and citruzumab patients that went on through 18 months. It was something we basically had to do in a placebo-controlled trial because you had to give those patients the opportunity to move to citruzumab if they weren't doing well on placebo or, you know. So we had to incorporate that into the study. You know, people mention things like the bisphosphonate washout period. Did that affect us? What bisphosphonates do with respect to fractures in OI is really pretty obscure. So we have no evidence that that had any impact on the study. You know, we've mentioned the activity levels, which we couldn't control for and believe would happen again. And I think one of the factors here, and you've seen a number of rare disease trials that read out and they've missed the primary and or secondary endpoints. And I think a big factor there is that we underestimate the heterogeneity in these patient populations. You know, we underestimate the heterogeneity, and particularly when you conduct a larger trial like we've conducted. So that also impacts the trial. And, you know, COSMIC, which had a tighter age group and higher fracturing population, actually performed pretty much as we expected. If you recall, we were saying that COSMIC was underpowered and that we wanted to see a numerical trend. And we actually achieved that in that study. But it was a little tighter, a little better defined, right? So when you think about the trial, we're comfortable with the trial that was done. We're comfortable with how it was powered. And we think we understand some of the factors that contributed to the primary analysis.

Maury Raycroft, Analyst — Jefferies

Got it. And can you walk through just more on the EU reimbursement process and what you need there to just have robust conversations with EMA for a path forward?

Dr. Denise Scots-Knight, CEO

Yeah, so, I mean, separating the two. So, obviously, there's the EMA and the MHRA in terms of, you know, if there is a path forward, what does that look like? What are any post-marketing commitments? and you know yeah what might what might a label look like and so that then directly impacts into our conversations with with the htas the individual country htas nice for reimbursement and we've already you know we've got a there's a you have your launch sequence but we've already been in discussions for several years with the national HTAs over, you know, what comparator data they would need to see, for example. So, for example, residronate is, sorry, noridronate is approved in Italy, for example, so you need to have those comparator data. And so we really understand, you know, across the European landscape, if we're able to find a path forward in Europe and the UK, what the reimbursement process, what we need to deliver for the reimbursement and pricing.

Maury Raycroft, Analyst — Jefferies

Got it. And so that's something that you, or those conversations are happening in parallel, or how do we think about that?

Dr. Denise Scots-Knight, CEO

Well, they have been happening in parallel.

Maury Raycroft, Analyst — Jefferies

Obviously, at the moment, the focus is on determining if there's a path forward with the regulators. and once we know where we are with that then we can refresh all the work that we've done got it okay um so yeah next steps for citruzumab you guys are working with the the regular regulatory interactions right now um is it fair to assume that there's back and forth with the regulators uh and then you kind of get the the minutes from or how does that yeah i mean there's the minutes are one part i mean you know in the meeting you know what the feedback is and then

Dr. Denise Scots-Knight, CEO

you get the minutes but um yeah there's you know as i say it's complex because we didn't hit the primary so so there's multiple ways of of interacting there's the meetings there's also written communications and you know there's different forms but it's just going to take time Okay.

Maury Raycroft, Analyst — Jefferies

And switching gears for the AATD LD market, can you characterize the competitive landscape with emerging oral therapies, gene editing, and explain how alveolostats mechanism, development timeline, and regulatory path position it for commercial success?

Dr. Denise Scots-Knight, CEO

Yeah. So alveolostax, an oral neutrophil elastase inhibitor, daily dosing. And it's designed at the dose that we're taking into the phase three to really inhibit neutrophil elastase at the 90% level, 24-7. okay and if you think about so you know obviously there's second generation um augmentation therapies in development and as you said there's the the editing um platforms um that are working in the aatd space and i think you know there's lots of discussion at the moment around um what is the right level, you know, chronic level, I guess, of AAT, circulating level of AAT, and then what do you need during an acute event, like an exacerbation? And so I think the question for the, not so much the second generation augmentation therapies, But the question for the new platforms is, you know, what level of AAT on a steady state can they achieve? And then do the, we've seen these acute responses in a few patients in one of the platforms. And the question is, does that improvement in the AAT level in that acute response lead to clinical outcomes? Okay, so what we showed in our phase two in both Astraeus and Atlanta was that with alveolostat, we actually, so we saw these improvements in SGRQ, which is a standard PRO instrument used in COPD studies. And we also importantly saw a reduction in exacerbations, you know, which is a key clinical outcome. here. So we have seen trends, at least in these clinical outcomes with alveolostat already in phase two. And in terms of the regulatory path forward for alveolostat, so right now the current design, we have these two independent primary endpoints. We have SGRQ for the FDA, and we have lung density by CT for the EMA and so and it's a single a single global trial so two independent primary endpoints in one study and the you know the thing that we are doing is obviously there's a lot of interactions going on with with the FDA and the EMA right now over pivotal endpoints for these other platforms and also for the second generation augmentation so we're keeping an eye on those discussions just in case there's an opportunity for us without too much delay to simplify our design okay um and so keeping an eye on some of the updates in the space are there specific competitor programs that you're focused on um no we we keep we're keeping a watching eye on all the different platforms, you know, as the data evolves. And obviously, you know, there was some data updates from Sanofi at ATS on their three-weekly augmentation. So, yeah, so there's a lot of debate around AAT levels and acute responses.

Maury Raycroft, Analyst — Jefferies

Got it. Okay, that's interesting. And for this opportunity, what could your estimated peak sales and market share opportunity look like for Alveolistat?

Dr. Denise Scots-Knight, CEO

Yeah, so Alveolistat, we're, you know, one of the differentiation factors here is that we're actually, the phase three is designed to enroll both late stage and early stage patients. So, and when I say early stage, I mean patients who haven't lost so much of their lung function. So they're still at, you know, 95 to 100 percent of their predicted FEV1. But they have got emphysema and they have got the genetic diagnosis. And so, you know, the opportunity there with a daily oral is to really try and prevent, you know, the lung tissue from deteriorating. So really preventative. And so that's one area that we're really targeting. The sales of augmentation right now are around a billion dollars annually, but there's only about 10 to 15% of patients are actually diagnosed. So I think as these therapies evolve and are developed, that 10 to 15% will hopefully go up significantly in terms of diagnosis rate.

Maury Raycroft, Analyst — Jefferies

Got it. And maybe going back to the Sanofi data that you mentioned, what's the exact relevance or read-through to your program?

Dr. Denise Scots-Knight, CEO

Well, I think the Sanofi data was more around the levels of AAT that they were able to achieve. So, you know, they were talking that they don't believe 11 micromolar in a steady state is sufficient. They're focused more on 20 micromolar.

Maury Raycroft, Analyst — Jefferies

Yeah. Okay. And then as you engage in active alveolosad, partnering discussions, what's a realistic timeline for closing a deal?

Dr. Denise Scots-Knight, CEO

Again, a very good question, difficult to answer because you never want to guide when things might close, just in case. But I think what I can say is that we are, you know, we're targeting to start the phase three around the end of the year.

Maury Raycroft, Analyst — Jefferies

Got it. Okay. Around the end of this year. Yes. Start the phase three. And so you'd run the study on your own.

Dr. Denise Scots-Knight, CEO

No, I mean, we've said, consistently said that, you know, we plan to partner this to have the cost of the study funded.

Maury Raycroft, Analyst — Jefferies

Okay. And so, theoretically, then, you'd have some sort of a partnership in place by that time. How much would a phase three cost?

Dr. Denise Scots-Knight, CEO

So, rather than give you the exact cost, because it depends on what's included, what's excluded, CMC, et cetera. So, you know, it's around 220 patients. So, you know, it's a very reasonably, it's a very reasonable cost for a study given the market opportunity.

Maury Raycroft, Analyst — Jefferies

Got it. Okay. Interesting. And for vantictimab, do you want to provide a brief update on the program?

Dr. John Lewicki

So just quickly, vantictimab is an antagonist. It's an antibody that basically blocks Wnt signaling in various tissues, but most significantly in bone. And when you block Wnt signaling in bone, it's actually the opposite of what we do with citruzumab. What you do is you increase the activity of osteoclasts, in other words, increasing bone breakdown. And osteoclasts are deficient or aberrant in conditions like osteoporosis. autosomal dominant osteoporosis type 2 specifically. So what we've done is we have licensed Vantictimab to ASHI-Bio. We've retained the European rights. They're paying for the clinical studies in the CMC and obviously have rights to the U.S. and the rest of the world. Uh, you know, so we, uh, so, you know, we've basically completed that with them. And, you know, one of the advantages of Vantictimab is that it was in the clinic previously for the treatment of solid tumors, uh, having it in the, it's been in over several hundred patients, and it has a safety profile consistent with its use in ADO type 2. So it's a ready-packaged program, ready to go back into the clinic, phase two studies. And as we speak, ASHI-Bio is completing all the requisite work to move it into the clinic as quickly as possible.

Maury Raycroft, Analyst — Jefferies

Got it. Okay, so probably no updates on that program this year, but maybe something next year from then. Okay, so we're out of time. Maybe to close out, if you want to highlight cash runway assumptions and key catalyst investors should be focused on over the next six months.

Dr. Denise Scots-Knight, CEO

So, you know, at the end of Q1, we reported that we had just around $36 million in cash on the balance sheet. We expect that to give us runway into mid-2027. And so, you know, that doesn't include any potential, you know, income or milestones from business development. month. So we expect, you know, that's going to provide us runway to work through these regulatory interactions alongside ultragenics, and also, you know, we'll see what happens with alveolus sac.

Maury Raycroft, Analyst — Jefferies

Got it. Okay, Denise, John, thanks so much for joining us today.

Dr. Denise Scots-Knight, CEO

Thank you, Mari.