Mereo BioPharma Group and Sentynl Therapeutics have entered into an option and license agreement granting Sentynl commercial and global manufacturing rights to alvelestat in the U.S.

Alvelestat is being prepared for a Phase III trial that, if approved, would mark the first oral treatment for Alpha-1 Antitrypsin Deficiency-Associated Lung Disease (AATD-LD), a rare, progressive genetic lung disease that affects an estimated 50,000 to 80,000 people in the U.S.¹ Under terms of the agreement, Sentynl is set to receive the exclusive right to acquire a license to commercialize alvelestat for AATD-LD in the U.S., while Mereo retains commercial rights everywhere else in the world.¹ Sentynl also secures global manufacturing rights for the drug, and upon exercising its option, would provide funding for the Phase III development program, which could begin as early as 2027.¹

What are the financial terms?

As part of the agreement, Mereo will receive a non-refundable option fee from Sentynl and, if the option is exercised, is also set to receive $40 million in upfront and R&D payments, along with up to $435 million in regulatory and commercial milestone payments, plus double-digit tiered royalties on U.S. net sales of alvelestat.¹ Mereo will lead the global Phase III study and regulatory interactions until the study is completed, while the companies collaborate during the option period to advance manufacturing and streamline the Phase III study design.

What does alvelestat do?

Alvelestat is a novel, oral small molecule designed to specifically inhibit neutrophil elastase, a key enzyme involved in inflammation and the destruction of lung tissue.² As a small molecule, it can access both cell-bound and soluble elastase and effectively penetrate lung tissue. Its safety and tolerability profile has been established across clinical trials in 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 transplant. The drug has received Orphan Drug Designation for AATD-LD from the European Commission and FDA, along with Fast Track designation from FDA.¹

What is AATD-LD?

AATD is a rare, genetic disease that results in a deficiency of the alpha-1 antitrypsin protein, which normally protects the lungs against damaging enzymes released by the body during inflammation.² Most individuals with severe deficiency develop pulmonary emphysema, a progressive, life-threatening lung disease marked by severe shortness of breath, chronic cough and sputum production, along with susceptibility to acute exacerbations. Individuals with AATD may also develop asthma and bronchiectasis, a permanent enlargement of parts of the lungs' airways.²

Why does this deal matter?

Mereo has been preparing alvelestat for a global Phase III study, supported by positive efficacy data from two Phase II studies. "We are very pleased to have the opportunity to partner with Sentynl to advance alvelestat for patients with AATD-LD. We have been preparing alvelestat for a global Phase III study, backed by positive efficacy data from two Phase II studies. We believe Sentynl's commitment to rare diseases and established commercial infrastructure make them the ideal partner for alvelestat and look forward to collaborating with them during the option period, when we plan to refine the global Phase III study design," said Denise Scots-Knight, chief executive officer of Mereo BioPharma.

For Sentynl, the agreement extends a rare disease strategy built around ultra-rare conditions into a larger patient population. "This partnership marks a pivotal moment for Sentynl's rare disease strategy. Mereo's alvelestat is a highly promising, differentiated candidate that meaningfully expands our portfolio and has the potential to address an area of significant unmet need," said Dr. Sharvil P. Patel, managing director, Zydus Lifesciences Limited. "AATD-LD has a profound impact on patients' lives. If approved, alvelestat has the potential to be a meaningful new option that could help their quality of life."

"We take great pride in having built a sustainable approach for developing therapies for ultra-rare conditions, and this partnership allows us to expand that strategic focus to a larger population within the rare disease community, enabling us to help more people," said Matt Heck, chief executive officer of Sentynl Therapeutics. "For patients with AATD-LD, the current standard of care is demanding, often relying on generalized therapies or frequent intravenous treatments. We see a clear opportunity to improve upon that with alvelestat. Mereo has built a strong foundation for this asset, making them an ideal partner as we collaborate during the option period to prepare for the next phase of development."

Sources

1. Mereo BioPharma and Sentynl Therapeutics Announce Option and License Agreement for alvelestat in Alpha-1 Antitrypsin Deficiency-Associated Lung Disease (AATD-LD) Mereo BioPharma Group August 11, 2026, https://www.globenewswire.com/news-release/2026/08/11/3342646/0/en/mereo-biopharma-and-sentynl-therapeutics-announce-option-and-license-agreement-for-alvelestat-in-alpha-1-antitrypsin-deficiency-associated-lung-disease-aatd-ld.html
2. Alvelestat (MPH966) for the Potential Treatment of Severe Alpha-1 Antitrypsin Deficiency-associated Lung Disease Mereo BioPharma Date Accessed August 12, 2026, https://www.mereobiopharma.com/our-pipeline/alvelestat-mph966/