25 May 2018

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014.

THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY, AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF MEREO BIOPHARMA GROUP PLC.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT AMOUNTS TO A FINANCIAL PROMOTION FOR THE PURPOSES OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 ("FSMA") AND HAS BEEN APPROVED BY PRIMARYBID LIMITED WHICH IS AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY (FRN 779021).

Mereo BioPharma Group plc

("Mereo" or the "Company") (AIM: MPH)

PrimaryBid.com Offer

Mereo BioPharma Group plc (AIM: MPH), is pleased to announce, an offer via PrimaryBid (the "Offer") by the issue and allotment by the Company of new ordinary shares of 0.3pence each in the Company ("New Ordinary Shares") at an issue price of 300 pence per New Ordinary Share (the "Issue Price"), being a discount of 7.1 per cent to the closing mid-price on 24 May 2018.

Mereo is a biopharmaceutical company focused on developing and commercializing innovative therapeutics for patients with rare diseases with its two lead programs targeting Brittle Bone Disease (or Osteogenesis Imperfecta) and the respiratory disease Alpha-1 Antitrypsin Deficiency.

The Company is seeking to broaden its shareholder base by accessing additional retail investors via the Offer in order to facilitate a proposed listing of American Depositary Shares (“ADSs”) representing its ordinary shares on the Nasdaq Global Market (“Nasdaq”).

Recent Company Highlights

  • Positive top-line results announced in December 2017 from its Phase 2 clinical trial of BCT-197 as an acute therapy for patients with Acute Exacerbations of the respiratory disease COPD, or AECOPD
  • Positive top-line data announced in March 2018 from its Phase 2b clinical trial of BGS-649 for the treatment of Hypogonadotropic Hypogonadism or HH, an endocrine condition that affects obese men with low testosterone
  • Good progress towards completing a Phase 2b clinical trial of BPS-804 in Osteogenesis Imperfecta
  • On track to initiate a Phase 2 trial for AZD-9668 in patients with Alpha-1 Antitrypsin Deficiency in H2 2018
  • The Company is well funded with cash resources of £52.5 million at December 31, 2017
  • Our market capitalisation was £230m on 24 May 2018

A copy of the Company’s 2017 Annual Report which has more information can be found here: http://www.mereobiopharma.com/investors-page/results-reports-and-presentations/

Offer
Investors can apply exclusively through the www.PrimaryBid.com platform and the PrimaryBid mobile app available on the Apple App Store and Google Play. PrimaryBid does not charge investors any commission for this service.

The Offer, via the PrimaryBid.com platform, will be open to individual and institutional investors from 4.30 p.m. on Friday 25 May 2018 to 5.00 p.m. on Monday 28 May 2018. The Offer may close early at the Company’s election.

Subscriptions under the Offer will be considered by the Company in conjunction with PrimaryBid on a "first come, first served" basis, subject to conditions (which are available to view on PrimaryBid.com) with any investment request over £50,000 first requiring consultation with the Company.

PrimaryBid is acting as arranger to the Offer. No commission is charged to investors on applications to participate in the Offer made through PrimaryBid. It is vital to note that once an application for New Ordinary Shares has been made and accepted via PrimaryBid, an application cannot be withdrawn.

Further details of the Offer are set out below under “Further details of the Offer”.

For further information on PrimaryBid.com or the procedure for applications under the Offer, visit www.PrimaryBid.com or call PrimaryBid.com on +44 (0)20 7491 6519.

The New Ordinary Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Company's existing ordinary shares, including the right to receive all dividends and other distributions declared, paid or made after the date of issue of the New Ordinary Shares. The net proceeds of the offer will be added to the Company’s existing cash resources.

The results of the Offer are expected to be announced on Tuesday 29 May 2018.

Mereo BioPharma Group plc +44 (0)333 023 7300
Denise Scots-Knight, Chief Executive Officer
Richard Jones, Chief Financial Officer

Cantor Fitzgerald Europe (Nominated Adviser) +44 (0)20 7894 7000
Phil Davies
Will Goode

PrimaryBid
Dave Mutton +44 (0)20 7491 6519

FTI Consulting (Public Relations Adviser)
Simon Conway +44 (0)20 3727 1000
Brett Pollard

The person responsible for arranging the release of this information on behalf of the Company is Charles Sermon, Company Secretary.

Further details of the Offer
In order to facilitate its application to list on Nasdaq, the Company is seeking to broaden its shareholder base by accessing retail investors via a PrimaryBid Offer. Retail and other investors may participate in the Offer of New Ordinary Shares on a first come, first served basis, exclusively through PrimaryBid.com.

In order to comply with the Prospectus Directive, the Company will ensure that funds raised from individual investors investing less than €100,000 in a 12 month period does not exceed €5,000,000. The Offer does not exceed a maximum aggregate amount of €5,000,000. The Offer is offered under the exemptions against the need for a prospectus allowed under the Prospectus Rules and the Financial Services and Markets Act 2000. As such, there is no need for publication of a prospectus pursuant to the Prospectus Rules or the Financial Services and Markets Act 2000, or for approval of the same by the Financial Conduct Authority in its capacity as the UK Listing Authority. The Offer is not being made into any jurisdiction other than the United Kingdom.

There is a minimum subscription of £300 per investor under the terms of the Offer which is open to existing shareholders and other investors subscribing exclusively via PrimaryBid.com. This allocation will be filled on a "first come first served" basis.

Any investment request in excess of £50,000 will require the Company's consent and may be subject to scale back.

An application will be made for the New Ordinary Shares issued in the Offer to be admitted to trading on the London Stock Exchange plc’s AIM market (“Admission”). It is expected that Admission will take place at 08.00 on 1 June 2018 at which time it is also expected that the New Ordinary Shares will be enabled for settlement in CREST.

For further details please refer to the PrimaryBid.com website at www.PrimaryBid.com. The terms and conditions on which the Offer is made, including the procedure for application and payment for New Ordinary Shares, is available to all persons who register with PrimaryBid.com.

Investors should make their own investigations into the merits of an investment in the Company. Nothing in this announcement amounts to a recommendation to invest in the Company or amounts to investment, taxation or legal advice.

It should be noted that a subscription for New Ordinary Shares and investment in the Company carries a number of risks. Investors should consider the risk factors set out on PrimaryBid.com before making a decision to subscribe for New Ordinary Shares. Investors should take independent advice from a person experienced in advising on investment in securities such as the New Ordinary Shares if they are in any doubt.