Mereo BioPharma Reports Full Year 2021 Financial Results and Recent Highlights London and Redwood City, Calif.

Mereo BioPharma Reports Full Year 2021 Financial Results and Recent Highlights

London and Redwood City,

Calif., March 31, 2022 - Mereo BioPharma Group plc (NASDAQ: MREO) ( Mereo or the Company ), a clinical-stage biopharmaceutical company focused on oncology and rare diseases, today announced financial

results for the year ended December 31, 2021 and provided an update on recent corporate highlights.

During 2021, we continued to execute on

all fronts and made substantial progress across our pipeline. We further advanced our etigilimab anti-TIGIT program, reporting highly promising interim data from the ongoing ACTIVATE Phase 1b/2 study and expanded our research to include clear-cell

ovarian cancer through our partnership with Cancer Focus Fund and MD Anderson, said Dr. Denise Scots-Knight, Chief Executive Officer of Mereo. In addition, we reported positive data from multiple studies of alvelestat, which also

received orphan drug designation for the treatment of AATD. We ended the year well positioned for further success in 2022, with a strong balance sheet supported by the proceeds of our public offering early last year. Following our accomplishments in

2021, we look forward to our upcoming catalysts in 2022.

Highlights from 2021 and Recent Developments

Etigilimab (MPH-313)

Alvelestat (MPH-966)

Public Offering of American Depositary Shares

Strengthened Board of Directors

Full Year 2021 Financial Results

36.5 million in 2021, representing the upfront payment under the licensing and collaboration agreement with Ultragenyx in January 2021 for the development and commercialization of setrusumab for OI.

Full year 2021 research and development expenses were 23.6 million, compared to 16.3 million in 2020, an increase of

7.2 million, or 44%. R&D expenses relating to etigilimab increased by 12.5 million. The increase was due to the costs associated with commencement of the open label Phase 1b/2 basket study in combination with nivolumab in

a range of tumor types. R&D expenses relating to alvelestat increased 0.6 million, or 13%, primarily related to the ongoing Phase 2 proof-of-concept

study. Partially offsetting the increases, R&D expenses relating to setrusumab and navicixizumab decreased by 4.1 million and 1.7 million, respectively. The decrease related to setrusumab was primarily driven by the

licensing and collaboration agreement with Ultragenyx, under which Ultragenyx will fund global development of the program, and the decrease related to navicixizumab was driven by the global out-licensing

agreement with OncXerna for the development and commercialization of navicixizumab.

Administrative expenses decreased by 5.3 million, or 25%,

from 21.2 million in 2020 to 15.9 million in 2021. The decrease was primarily driven by a 4.0 million reduction in legal and professional fees in 2021, reflecting lower activity and related transaction costs in

2021 compared to 2020. Premises-related costs decreased by 1.3 million in 2021 primarily due to one-off transaction costs in 2020 associated with renegotiation of our office lease in Redwood City.

Net profit attributable to equity holders for the year 2021 was a net profit of 12.7 million, compared to a net loss of

163.6 million in 2020, reflecting an operating loss of 20.9 million and a gain of 40.0 million, due to changes in the fair value of financial instruments resulting from an unrealized gain on warrants.

Total ordinary shares outstanding at December 31, 2021 were approximately 585 million. Total ADSs outstanding at December 31, 2021 were

approximately 116.5 million, with each ADS representing five ordinary shares of the Company.

Cash and short-term deposits totaled 94.3

million at December 31, 2021.

About Mereo BioPharma

Mereo BioPharma is a biopharmaceutical company focused on the development of innovative therapeutics that aim to improve outcomes for oncology and rare

diseases and plans to commercialize selected rare disease programs. The Company has developed a portfolio of six clinical stage product candidates. Mereo s lead oncology product candidate, etigilimab (anti-TIGIT), has advanced into an open

label Phase 1b/2 basket study evaluating anti-TIGIT in combination with an anti-PD-1 in a range of tumor types including three rare tumors and three gynecological

carcinomas, cervical, ovarian, and endometrial carcinomas. The Company s second oncology product, navicixizumab, for the treatment of late line ovarian cancer, has completed a Phase 1 study and has been partnered with OncXerna Therapeutics,

Inc., formerly Oncologie, Inc. The Company has two rare disease product candidates, alvelestat for the treatment of severe Alpha-1 antitrypsin deficiency (AATD) and Bronchiolitis Obliterans Syndrome (BOS), and

setrusumab for the treatment of osteogenesis imperfecta (OI). Alvelestat has recently received U.S. Orphan Drug Designation for the treatment of AATD and is being investigated in an ongoing Phase 2 proof-of-concept study in the U.S. and Europe, with top-line data expected in early Q2 2022. The Company s partner, Ultragenyx Pharmaceutical, Inc., is expected to

initiate a pivotal Phase 2/3 pediatric study and young adult study (5-25 years old) for setrusumab in OI in H1 2022.

Forward-Looking Statements

This press release contains forward-looking statements. All statements other than statements of historical fact contained in this press release are

forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended (the Securities Act ), and Section 21E of the United States Securities Exchange Act of 1934, as amended (the

Exchange Act ). Forward-looking statements usually relate to future events and anticipated revenues, earnings, cash flows or other aspects of our operations or operating results. Forward-looking statements are often identified by the

words believe, expect, anticipate, plan, intend, foresee, should, would, could, may, estimate, outlook

and similar expressions, including the negative thereof. The absence of these words, however, does not mean that the statements are not forward-looking. These forward-looking statements are based on the Company s current expectations, beliefs

and assumptions concerning future developments and business conditions and their potential effect on the Company. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future

developments affecting the Company will be those that it anticipates.

All of the Company s forward-looking statements involve known and unknown

risks and uncertainties some of which are significant or beyond its control and assumptions that could cause actual results to differ materially from the Company s historical experience and its present expectations or projections. You should

carefully consider the foregoing factors and the other risks and uncertainties that affect the Company s business, including those described in the Risk Factors section of its latest Annual Report on Form 20-F, reports on Form 6-K and other documents furnished or filed from time to time by the Company with the Securities and Exchange Commission. The Company wishes to caution

you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether

as a result of new information, future events or otherwise, except to the extent required by law.

Consolidated Statements of Comprehensive Income/(Loss)

Consolidated Balance Sheets