Novartis, a global healthcare company, announced a swap of clinical assets for equity with Mereo BioPharma Group Ltd. The deal involves compounds in areas of unmet medical need including BPS-804, to improve bone density in brittle bone syndrome, an orphan disease; BCT-197 for acute exacerbations in COPD, and BGS-649 for obese men with hypogonadotrophic hypogonadism to normalize testosterone levels.

Under the terms of the agreement, Novartis will have an equity stake in Mereo and will share in the success of the development of these compounds, including a share on milestones and royalties on future commercial sales.

"We are pleased that through this deal with Mereo we have found a way to work together to bring these valued innovations to patients," said David Epstein, head of Novartis Pharmaceuticals.

Mereo is a recently formed specialty biopharmaceutical company based in the UK who focuses on the acquisition and development of innovative medicines, particularly in rare and specialist disease areas, through the acquisition of validated, mid stage development programmes.