Mereo BioPharma and Sentynl Therapeutics partner on alvelestat licensing

Mereo BioPharma and Sentynl Therapeutics, a subsidiary of Zydus Lifesciences, have entered into an option and license agreement for alvelestat, a potential first oral treatment for alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD).

Under the terms of the deal, Sentynl receives exclusive rights to commercialize alvelestat in the United States and holds global manufacturing rights. Mereo BioPharma will retain commercial rights for the rest of the world. Upon the exercise of the option, Sentynl would fund the Phase 3 development program, which is projected to potentially begin in early 2027.

Financial terms include a non-refundable option fee, with Mereo eligible for up to $40 million in upfront and R&D payments upon option exercise, plus up to $435 million in regulatory and commercial milestones. Mereo is also set to receive double-digit tiered royalties on U.S. net sales. Alvelestat, a neutrophil elastase inhibitor, currently holds Orphan Drug Designation in the U.S. and EU, as well as Fast Track designation from the FDA.