21 Jun 2019

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON PUBLICATION OF THIS ANNOUNCEMENT THIS INFORMATION IS NOW CONSIDERED IN THE PUBLIC DOMAIN

Mereo BioPharma Group plc

("Mereo" or the "Company" or the "Group")

Conversion of loan note and issue of equity

 London and Redwood City, Calif., June 21, 2019 - Mereo BioPharma Group plc (AIM: MPH, NASDAQ: MREO), a clinical stage biopharmaceutical company focused on rare diseases, today announces the conversion by Novartis Pharma (AG) ("Novartis") of the remaining balance of principal and interest of £2,367,003.64 due under a loan note dated 3 June 2016, as subsequently amended, (the "Loan Note"). The conversion into 1,071,042 ordinary shares in the Company ("Conversion Shares") is at the fixed conversion price of £2.21 per share. Under the terms of the Loan Note and as previously disclosed, Novartis will also receive 864,988 additional ordinary shares in the Company ("Bonus Shares") they are entitled to under the Loan Note.

Application has been made for the Conversion Shares and Bonus Shares to be admitted to trading on AIM and dealings are expected to commence on or around 26 June 2019. These new ordinary shares will rank pari passu with the existing ordinary shares.

Following this conversion, Novartis will hold 15,703,871 ordinary shares in the Company representing 16.0% of the (enlarged) share capital and the Loan Note will be extinguished with no further interest.

Following the issue of the Conversion Shares and Bonus Shares, the total number of shares in issue is 97,959,622 ordinary shares, each with voting rights. Therefore, the total number of voting rights in the Company is 97,959,622. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest under the Disclosure and Transparency Rules.

FURTHER ENQUIRIES

Mereo
Denise Scots-Knight, Chief Executive Officer
Richard Jones, Chief Financial Officer
+44 (0)333 023 7300

Cantor Fitzgerald Europe (Nominated Adviser and Joint Broker to Mereo)
Phil Davies
Will Goode
+44 (0)20 7894 7000

RBC Capital Markets (Joint Broker to Mereo)
Rupert Walford
Jamil Miah
+44 (0)20 7653 4000

FTI Consulting (Public Relations Adviser to Mereo)
Simon Conway
Brett Pollard
Ciara Martin
+44 (0)20 3727 1000

Burns McClellan (US Public Relations Adviser to Mereo)
Lisa Burns
Steve Klass
+01 (0) 212 213 0006