Novartis helps to launch new UK biotech firm Mereo

Novartis has announced the launch of Mereo BioPharma Group, a new specialty biopharmaceutical company based in the UK.

The firm has partnered with Phase 4 Partners and a number of institutional investors to launch Mereo, which will be dedicated to the acquisition and development of innovative medicines, particularly in rare and specialist disease areas.

To support the new business, Novartis has announced a swap of clinical assets for equity with Mereo, including the brittle bone syndrome therapy BPS-804, the chronic obstructive pulmonary disease therapy BCT-197, and BGS-649 for obese men with hypogonadotrophic hypogonadism.

Novartis will have an equity stake in Mereo and will share in the success of the development of these compounds, including a share of milestones and royalties on future commercial sales.

David Epstein, head of Novartis Pharmaceuticals, said: "We are pleased that through this deal with Mereo we have found a way to work together to bring these valued innovations to patients."

This comes after the firm agreed to acquire Spinifex Pharmaceuticals, a privately-held development-stage pharma company, in June.