Potential revenue uplift
If the Phase 3 results for setrusumab (the “Orbit” and “Cosmic” studies) come out positive, analysts are likely to model the drug as a first‑to‑market therapy for osteogenesis imperfecta (OI). The global OI market is still modest—estimated at roughly $200 million in 2025—but a successful, approved product can capture a sizable share of the pediatric and adult segments, especially given the lack of disease‑modifying treatments. Comparable rare‑disease biologics (e.g., Strensiq for hypophosphatasia, Fabrazyme for MPS VI) have generated $80‑120 million in first‑year net sales after launch. By applying a mid‑range uptake scenario (≈30 % of the $200 M OI market) and a 5‑year peak‑sales horizon, setrusumab could lift Mereo’s top‑line revenue by $70‑100 million in the next 12‑18 months and add roughly $150‑200 million of cumulative net‑sales over a 5‑year period, assuming successful regulatory filing and market launch in 2026‑27.
Trading implications
A positive Phase 3 readout would likely trigger a re‑rating of the stock as the company moves from a cash‑burn, development‑stage profile to a revenue‑generating one. The catalyst is priced in the market now; the current sentiment score (30) suggests modest optimism, leaving room for a upside of 20‑30 % if the data exceed expectations. Technical charts show the stock trading near its 200‑day moving average, with a modest bullish momentum (RSI ~48). A short‑term pull‑back to the $0.30‑$0.32 range could present a low‑risk entry ahead of the year‑end data release, with a target of $0.40‑$0.45 reflecting the projected uplift. Conversely, a miss would likely trigger a sharp sell‑off, so position sizing and stop‑losses around the recent swing low are prudent. Keep an eye on the data‑release window (Q4 2025) and any forward‑looking guidance from management on pricing, reimbursement, and launch partnerships, which will further shape the upside potential.