Exhibit 99.1
Mereo BioPharma Confirms Receipt of a Valid Notice Requiring it to Convene a General Meeting of Shareholders
Rubric has Rejected Mereo’s Reasonable Settlement Proposal and has Escalated its Costly, Distracting Proxy Campaign to Now Seek Control of Mereo’s Board
Mereo Reiterates Support for its Experienced, Highly Qualified Board and Urges Shareholders to Reject Rubric’s Proposals to Replace a Majority of the Independent Directors at the Upcoming General Meeting
LONDON – October 3, 2022 – Mereo BioPharma Group plc (NASDAQ: MREO), (“Mereo” or the “Company”), a clinical-stage biopharmaceutical company focused on rare diseases and oncology, today confirmed that it has received a valid notice from Rubric Capital Management LP (“Rubric”) under section 303 of the Companies Act 2006 requiring the Board to convene a General Meeting of Shareholders of Mereo (the “General Meeting”).
The Board believes Rubric’s resolutions – which, if passed, would replace a majority of the independent directors of the Board with Rubric’s hand-picked candidates – would constitute an effective takeover of Mereo’s Board, substantially weakening it and jeopardizing the Company’s considered efforts to generate maximum risk-adjusted returns from its programs and assets.
Prior to receiving a valid notice from Rubric, in an attempt to minimize disruption and expense, Mereo responded to Rubric’s proposal to nominate four directors, which was contained in Rubric’s previous invalid notices, by offering to put one of Rubric’s principals and a second new, fully independent candidate on its Board, as a compromise to Rubric’s overreaching demands. Rubric declined this reasonable offer, refused to make any counteroffer and responded today with an escalated proposal that now nominates five directors, seeking to control the Board and the Company’s future strategy through its resolutions.
The Board urges Mereo shareholders to reject all Rubric’s resolutions at the General Meeting.
Mereo’s Board of Directors issued the following comment:
“We believe Rubric’s proposals are not in the best interests of the Company and our shareholders, and we encourage our shareholders to reject these proposals.
Mereo’s Board has been thoughtfully composed to ensure an optimal combination of skills, experience and expertise, including with respect to strategic partnerships and M&A, to best position Mereo to advance its most promising programs, optimize operations and maximize shareholder value. We have evolved the composition of our Board as our business needs have changed, including with the addition of three new, highly experienced Board members with deep experience pertinent to our industry since September 2021.
Rubric’s proposal is also out-of-step with the expressed will of our other shareholders. For example, at this year’s Annual General Meeting, shareholders reelected Chairman Michael Wyzga and director Dr. Deepa Pakianathan, with 99% support of the votes cast. Yet now, just months later, Rubric is seeking to remove these two outstanding contributors to our Board.
Rubric’s proposal to replace five experienced directors with five candidates of Rubric’s selection (including two of its own employees) would upset and weaken Mereo’s carefully crafted Board composition. In our judgment, Rubric’s candidates lack the requisite experience, skill sets and expertise to help Mereo succeed and to evaluate our strategy and alternatives.
We believe our present strategy focused on maximizing the risk-adjusted value of our programs and assets through considered investments and well-timed partnership efforts is the right one and in the best interests of all Mereo’s shareholders. We remain confident that the clearest path to maximizing value for shareholders is to focus Mereo’s resources on setrusumab and on taking alvelestat through the next stage of the regulatory process, as these two, late-stage, rare disease programs have already delivered encouraging clinical results and provide Mereo the opportunity to continue reaching multiple value-driving milestones over the next two years.
We are working hard to create value and extend the reach of our resources. Our executive team has recently taken concerted actions to extend Mereo’s cash runway into Q2 2025, which will support the Company’s efforts to advance our critical programs and build value. We will continue to review our strategy and ensure Mereo manages its costs and investments wisely and in light of clinical data and pipeline developments, with the goal of maintaining a strong balance sheet and maximizing our returns on our programs, assets and cash.
Now is not the time to overhaul the Mereo Board or replace the Company’s strategy. We encourage shareholders to reject Rubric’s underqualified candidates and misguided approach.”
Mereo noted that it has faithfully reviewed each of Rubric’s purported notices that have aimed to call a General Meeting. As at every company governed by the UK Companies Act 2006, a General Meeting of Mereo Shareholders can only be called by a shareholder who is a registered member of the Company. Now that Rubric has complied with this most basic rule of law — like every one of the other approximately 19 shareholders who have successfully called General Meetings at public UK companies since the beginning of 20211 — Mereo will fulfill its responsibility to convene the meeting.
Accordingly, and consistent with section 304(1) of the Companies Act 2006, by no later than October 24, 2022, Mereo will issue a notice convening the General Meeting to be held on a date not more than 28 days after the date of such notice, in order to consider Rubric’s proposed resolutions. Shareholders do not need to take any action at this time.
| 1 | Source: FactSet. Data refers to all publicly announced campaigns to requisition a special meeting at UK-incorporated companies from January 1, 2021 to October 3, 2022, with the date based on the day the campaign was first publicly disclosed. |
