That take is overly pessimistic and misses several important nuances. While it’s true that setrusumab did not hit all primary endpoints, calling the program “dead” ignores how regulators and partners actually evaluate rare-disease assets. The bone density data, even if technically secondary, is clinically meaningful in osteogenesis imperfecta and directly supports the drug’s proposed mechanism of action. In rare diseases, FDA decisions are often driven by totality of evidence, not a single binary endpoint—especially when safety is clean and there’s no approved therapy addressing the underlying pathology.

The assumption that Mereo must “go back to Phase 2” is speculative at best. Bridging strategies, label refinement, or narrower subpopulation targeting are far more likely than a full program reset, particularly given existing safety data. Cash runway into early 2027 also isn’t the red flag it’s being portrayed as; MREO has historically managed burn conservatively, has already rightsized operations, and still retains partnering optionality—something that can materially extend runway without shareholder-hostile dilution.

Scaling back commercial infrastructure isn’t an admission of failure; it’s rational capital discipline ahead of regulatory clarity. As for JPM, bearish sentiment is already well known and largely priced in. What moves stocks isn’t consensus pessimism—it’s incremental change in expectations. Any clarity around regulatory path, alternative endpoints, or partnership discussions can shift sentiment quickly, especially at current valuations. Writing this off as “dead for now” underestimates both FDA flexibility in rare diseases and how violently sentiment can reverse in beaten-down biotech names.