Persistent negative free cash flow, with quarterly outflows frequently exceeding $7 million, highlights a critical liquidity inflection point as cash reserves have dropped to $36.2 million.
| Cash from Operations | -26.95M | -30.97M | -32.83M | -21.13M | -48.82M | -7.07M | -38.62M | -60.22M | -23.14M | -32.15M | -27.4M |
| Operating CF Margin % | - | -6194.2% | - | -211.32% | - | -14.37% | - | - | - | 978.54% | - |
| Operating CF Growth % | 72.67% | 5.67% | -55.38% | 56.72% | -590.46% | 81.69% | 35.87% | -160.29% | 28.03% | -17.33% | - |
| Net Income | -35.7M | -41.88M | -43.25M | -29.47M | -42.22M | 19.22M | -226.84M | -53.91M | -37.31M | -46.95M | -33.72M |
| Depreciation & Amortization | 1.18M | 622K | 1.09M | 1.06M | 889K | 866.47K | 2.18M | 2.07M | 37.8K | 36.08K | 32.94K |
| Stock-Based Compensation | 5.21M | 7.6M | 7.39M | 4.92M | 4.77M | 4.46M | 2.12M | 2.15M | 2.19M | 3.65M | 6.49M |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 7.62M | 7.34M | 1.6M |
| Other Non-Cash Items | 2.66M | 5.9M | 2.31M | 3.94M | -9.91M | -29.12M | 188.56M | -472.02K | 1.92M | 751.65K | 179.76K |
| Working Capital Changes | -299.66K | -3.21M | -369K | -1.59M | -2.35M | -2.49M | -4.65M | -10.05M | 2.41M | 3.02M | -1.99M |
| Change in Receivables | -1.32M | 1.4M | -1.65M | 456K | -3.47M | -794.94K | 192.16K | -1.23M | 0 | 0 | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 456.35K | -1.38M | 146K | -1.26M | 617K | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -1.52K | -20K | -699K | -419K | 1.99M | -568.2K | 2.04M | 56.77M | 251.56K | -3.74M | 372.61K |
| Capital Expenditures | -301.02K | -20K | -699K | 0 | -13K | -722.06K | -21.8K | -27.53K | -35.54K | -2.3M | -3.47K |
| CapEx % of Revenue | 60.2% | 4% | - | 4.19% | - | 1.47% | - | - | - | -69.87% | - |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | -482.44K | 13.21M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 299.5K | 0 | 0 | -419K | 2M | 153.86K | 2.54M | 494.31K | 287.09K | 1.05M | 376.08K |
| Cash from Financing | -95.27K | 327K | 46.15M | 7.97M | 200K | 104.8M | 47.34M | -7.49M | -2.07M | 33.74M | 68.36M |
| Debt Issued (Net) | 0 | 0 | 0 | -3.19M | 0 | -933.95K | 30.65M | -2.9M | 577.35K | 27.03M | 4.27M |
| Equity Issued (Net) | 38.73K | 327.76K | 47M | 11.14M | 0 | 105.99M | 27.44M | -1.31M | -43.14K | 20.27M | 83.76M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1.31M | -306.84K | 0 | 0 |
| Other Financing | -134K | -764 | -853K | 24K | 200K | -253.73K | -10.75M | -3.28M | -2.61M | -1.7M | -3.7M |
| Net Change in Cash | -26.26M | -28.81M | 12.38M | -10.76M | -59.22M | 95.59M | 9.71M | -11.4M | -25M | -3.53M | 41.33M |
| Free Cash Flow | -26.96M | -30.99M | -33.53M | -21.55M | -48.83M | -7.79M | -38.65M | -60.25M | -23.17M | -34.44M | -27.4M |
| FCF Margin % | -5391.1% | -6198.2% | - | -215.51% | - | -15.83% | - | - | - | 1048.42% | - |
| FCF Growth % | 19.52% | 7.58% | -55.6% | 55.87% | -526.66% | 79.84% | 35.86% | -160.01% | 32.72% | -25.69% | - |
| FCF per Share | -0.17 | -0.19 | -0.23 | -0.16 | -0.40 | -0.07 | -0.57 | -3.37 | -1.63 | -2.50 | -3.06 |
| FCF Conversion (FCF/Net Income) | 0.76x | 0.74x | 0.76x | 0.72x | 1.16x | -0.41x | 0.18x | 1.35x | 0.72x | 0.83x | 0.97x |
| Interest Paid | 7K | 0 | 21K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Liquidity and clinical execution
According to the provided financial data, Mereo BioPharma's operating cash flow consistently trails net income, with the OCF/NI ratio fluctuating between 0.50 and 1.35, suggesting that non-cash items and working capital volatility significantly distort the company's underlying cash-generating capability during this pre-revenue clinical development phase.
The persistent gap between net income and operating cash flow indicates that reported losses do not fully capture the cash-based burn rate required to sustain clinical trials. Investors should monitor these fluctuations as they suggest that accounting adjustments, rather than operational efficiency, are the primary drivers of the reported cash flow variance.
As reported in financial statements, Mereo BioPharma has maintained a consistent negative free cash flow trajectory, with quarterly outflows frequently exceeding $7 million, reflecting the heavy capital requirements inherent in the company's orphan drug development model and the absence of a self-sustaining commercial revenue stream.
The lack of positive free cash flow is expected for a clinical-stage entity, yet the stability of these outflows suggests a high fixed-cost base that is difficult to scale down. This trajectory implies that the company remains entirely dependent on external financing or milestone-based inflows to fund its ongoing research activities.
Based on the quarterly cash flow tables, Mereo BioPharma exhibits significant volatility in working capital changes, with swings ranging from a $2.2 million inflow to a $2.3 million outflow, which complicates the predictability of the company's short-term liquidity and cash runway projections.
These erratic shifts in working capital likely stem from the timing of milestone payments and the settlement of clinical trial-related liabilities. Such volatility warrants further investigation into the company's ability to manage its payables effectively without disrupting critical research operations.
Data from recent filings reveals that Mereo BioPharma consistently utilizes stock-based compensation, with quarterly figures often exceeding $1.5 million, which effectively serves as a non-cash expense that masks the true economic cost of operations while simultaneously diluting the equity value for existing shareholders.
By relying on equity-based incentives to manage cash burn, the company preserves its limited cash reserves at the expense of shareholder ownership. This practice suggests that management is prioritizing immediate liquidity over long-term equity preservation, a strategy that may become increasingly contentious as the cash runway tightens.
Quick answers to the most common questions about buying MREO stock.
Mereo BioPharma Group plc (MREO) generated $-31.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Mereo BioPharma Group plc (MREO) reported negative free cash flow of $31.0M in 2025, indicating capital requirements exceeded cash from operations.
Mereo BioPharma Group plc (MREO) spent $0.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.