LONDON, UK; SOLANA BEACH, California; and AHMEDABAD, India, August 11, 2026
Mereo BioPharma Group plc and Sentynl Therapeutics, Inc., a wholly owned subsidiary of Zydus Lifesciences, have entered into an option and license agreement for alvelestat for the treatment of alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD). The agreement gives Sentynl an exclusive option to acquire U.S. commercialization rights for alvelestat, while Mereo will retain commercial rights in the rest of the world and lead global development. The partnership is designed to support advancement of alvelestat toward a potential Phase 3 clinical trial, which could begin as early as 2027.
Sentynl Gains Option for U.S. Commercialization
Under the agreement, Sentynl will have the exclusive right to license alvelestat for commercialization in the United States if it exercises the option. Sentynl will also receive global manufacturing rights for the therapy, while Mereo will maintain commercial rights outside the United States. During the option period, the two companies will collaborate on refining the design of the planned global Phase 3 program and advancing manufacturing activities. Mereo said the program is supported by positive efficacy data from two Phase 2 studies, providing the basis for preparing the next stage of clinical development. The financial terms include a non-refundable option fee for Mereo. If Sentynl exercises the option, Mereo would receive $40 million in upfront and research and development payments, with eligibility for up to $435 million in regulatory and commercial milestone payments. The agreement also provides for double-digit tiered royalties on U.S. net sales of alvelestat. Mereo will lead the global Phase 3 study and regulatory interactions until completion of the study, while both companies work together during the option period to streamline development plans.
Alvelestat Targets AATD-Associated Lung Disease
AATD-LD is a rare genetic respiratory disease caused by deficiency of alpha-1 antitrypsin, a protein that helps protect lung tissue from damaging enzymes released during inflammation. Severe deficiency can lead to progressive pulmonary emphysema, shortness of breath, chronic cough, sputum production, and acute exacerbations. Patients may also develop conditions including asthma and bronchiectasis. The source material estimates that approximately 50,000 to 80,000 people in the United States have AATD-LD associated with the Pi*ZZ variant. Alvelestat is an oral small-molecule neutrophil elastase inhibitor designed to target neutrophil elastase, an enzyme involved in inflammation and lung tissue destruction. According to Mereo, the drug can access both cell-bound and soluble elastase and penetrate lung tissue. Its safety and tolerability profile has been evaluated in clinical trials involving more than 1,000 patients with respiratory diseases, including AATD-LD, COPD, bronchiectasis, cystic fibrosis, COVID-19, and bronchiolitis obliterans syndrome following allogeneic stem cell transplantation.
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Partnership Strengthens Rare Disease Development
The agreement expands Sentynl’s rare disease portfolio while providing Mereo with a strategic partner for U.S. commercialization and global manufacturing. Alvelestat has received Orphan Drug Designation from both the European Commission and the U.S. FDA, as well as FDA Fast Track designation, supporting its development in AATD-LD. The companies said the partnership will allow them to refine the Phase 3 program while preparing manufacturing and regulatory strategies. For Mereo, the agreement represents another step in advancing its rare disease pipeline, which includes setrusumab for osteogenesis imperfecta, alvelestat for AATD-LD, and vantictumab for autosomal dominant osteopetrosis type 2. Sentynl, meanwhile, is expanding its focus on rare diseases through partnerships designed to advance therapies for underserved patient populations. The Mereo-Sentynl agreement positions alvelestat for the next phase of clinical development while combining Mereo’s global development expertise with Sentynl’s U.S. commercial capabilities. If the planned Phase 3 program proceeds as expected, the investigational therapy could advance toward a potential new oral treatment option for patients living with AATD-associated lung disease, an area with significant unmet medical need.
Source: Mereo BioPharma, Sentynl Therapeutics press release
