Setrusumab's Setback: OI Drug Misses Fracture Goal in Phase 3 Trials

LONDON, UK – December 29, 2025 – Hopes for a new treatment for the rare genetic disorder Osteogenesis Imperfecta (OI) faced a significant hurdle today as Mereo BioPharma announced that its investigational drug, setrusumab, failed to meet its primary goal in two pivotal Phase 3 studies. The drug did not demonstrate a statistically significant reduction in fracture rates, a devastating blow for a therapy aimed at a condition commonly known as brittle bone disease.

The announcement sent ripples through the patient and investor communities, casting a shadow over a program that carried high expectations. Despite the primary endpoint failure, the company reported that setrusumab did achieve its secondary endpoints, showing strongly significant improvements in bone mineral density (BMD). This paradoxical result—stronger bones on scans that did not translate to fewer breaks—leaves the future of the program uncertain as the company scrambles to analyze the complex data and chart a path forward.

The Fracture Paradox: ORBIT and COSMIC Results

The late-stage clinical program for setrusumab, developed in partnership with Ultragenyx Pharmaceutical, consisted of two major studies: ORBIT and COSMIC. Both were designed to assess the drug's ability to do what matters most for OI patients: prevent debilitating fractures.

The ORBIT study, a global Phase 2/3 trial, enrolled 159 patients between the ages of 5 and 25. Participants were randomized to receive either setrusumab or a placebo. The primary goal was to measure the reduction in the annualized clinical fracture rate over the study period. While patients on setrusumab showed substantial improvements in bone mineral density, this did not lead to a statistically significant decrease in fractures compared to the placebo group. Compounding the issue, the company noted that the fracture rate in the placebo arm was unexpectedly low, making it mathematically more difficult to demonstrate a benefit.

The second trial, the Phase 3 COSMIC study, focused on a younger and often more severely affected population: 69 children aged 2 to under 7 years. In this study, setrusumab was compared against the current standard of care, intravenous bisphosphonates. This patient group had a much higher baseline fracture rate than the older cohort in ORBIT. Here, the data showed a trend toward fewer fractures for patients treated with setrusumab. However, this reduction did not reach the threshold for statistical significance, meaning the result could have been due to chance. As in the ORBIT study, the children receiving setrusumab experienced meaningful and statistically significant gains in their bone mineral density compared to those on bisphosphonates.

This disconnect between bone density measurements and clinical fracture outcomes is at the heart of the company's current challenge. Setrusumab, a monoclonal antibody, works by inhibiting sclerostin, a protein that naturally puts the brakes on bone formation. By blocking sclerostin, the drug is designed to "release the brake," promoting the creation of new, stronger bone. The Phase 3 data confirms the drug successfully builds bone mass, but the crucial link to improved bone strength and fracture resistance was not proven.

Navigating the Aftermath and Managing Resources

In the wake of the disappointing results, Mereo BioPharma's leadership moved quickly to address the situation and reassure stakeholders. The company announced it would conduct extensive additional analyses of the complete data set from both studies to better understand the findings.

"Whilst we are disappointed by these results, we will be conducting additional analyses on the data, to assess next steps and the best path forward for the program, especially in pediatrics given the totality of the data and lack of other treatment options for individuals with OI," said Dr. Denise Scots-Knight, Chief Executive Officer of Mereo, in a statement.

The company is particularly interested in exploring the data from the COSMIC study further, where a non-significant trend towards fracture reduction was observed in very young children. This exploration will include looking at other bone health markers and clinical endpoints beyond fractures to determine if a specific sub-population might still benefit from the treatment.

In parallel with this data deep-dive, Mereo is implementing immediate cost-control measures. The company confirmed it is making "immediate reductions in our pre-commercial and manufacturing activities" related to the setrusumab program. This move is designed to conserve capital and extend its cash runway as it evaluates the drug's future. According to its latest financial disclosures, Mereo had a cash balance of $48.7 million at the end of the third quarter of 2025. Prudent financial management will be critical as it navigates this period of uncertainty.

A High Unmet Need and a Diversified Pipeline

The setback is particularly poignant given the profound need for effective treatments for Osteogenesis Imperfecta. OI is a group of genetic disorders that disrupt the body's collagen production, leading to extremely fragile bones that can break with minimal or no trauma. The condition, which affects an estimated 60,000 people in major commercial markets, can cause hundreds of fractures over a lifetime, leading to chronic pain, bone deformities, and significantly impaired mobility. Currently, there are no globally approved therapies specifically for OI, and treatment largely consists of managing symptoms and using off-label drugs like bisphosphonates, which primarily work by slowing bone resorption rather than building new bone.

Setrusumab, with its novel mechanism of action aimed at bone formation, was seen as a potential paradigm shift in treatment. The drug had previously received Breakthrough Therapy and rare pediatric disease designations from the U.S. Food and Drug Administration (FDA), as well as PRIME designation from the European Medicines Agency (EMA), underscoring its perceived potential.

While the future of setrusumab is now in question, Mereo BioPharma emphasized that it is continuing to advance its other programs. The company is actively engaged in partnering discussions for alvelestat, a candidate for treating alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD). It also has partnered programs for vantictumab in osteopetrosis and leflutrozole for male infertility, which provide potential future value streams independent of the OI program. These other assets in its portfolio provide a degree of diversification, but the focus will remain squarely on the setrusumab data as the company, its partner Ultragenyx, and the OI community await the results of the forthcoming analyses.

The path forward is unclear, but the detailed examination of the trial data in the coming months will be crucial in determining whether there is any viable route to approval for setrusumab, or if this promising bone-building agent will become another casualty of the notoriously difficult journey of rare disease drug development.