Zydus’ Sentynl pens $475M deal for Mereo’s phase 3-ready rare genetic lung disease drug

Biotech Zydus’ Sentynl pens $475M deal for Mereo’s phase 3-ready rare genetic lung disease drug By Marissa Russo Aug 11, 2026 10:20am Mereo BioPharma Sentynl Licensing deals rare diseases Sentynl Therapeutics has penned a deal potentially worth $475 million for the option to market Mereo BioPharma's phase 3-ready rare genetic respiratory disease drug in the U.S. In return for an undisclosed upfront payment, Sentynl—a subsidiary of Zydus Lifesciences—has secured the option to commercialize alvelestat in the U.S. The plan is for Mereo to lead on a planned global phase 3 study of the neutrophil elastase inhibitor in patients with alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD), although the two companies will collaborate to advance manufacturing and streamline the trial design, according to an August 11 release.

Should Sentynl take up its option to secure the U.S. licence, the company will pay out $40 million in upfront and R&D payments, with potentially up to $435 million in regulatory and commercial milestone payments to follow, as well as double-digit tiered royalties on U.S. net sales of alvelestat.

Mereo will lead the development of the drug in the rest of the world. London-based Mereo, which was founded in 2015, is focused on developing therapeutics for rare diseases. One of their key interests is AATD-LD, a rare genetic respiratory disease that often starts in early adulthood and can lead to irreversible loss of lung function, early onset emphysema or chronic obstructive pulmonary disease.

AATD-LD is caused by a deficiency of the alpha-1 antitrypsin protein, which is in charge of protecting the lungs against damaging enzymes released during inflammation. Mereo acquired alvelestat from AstraZeneca for $5 million upfront back in 2017. By inhibiting neutrophil elastase, the drug is designed to block an enzyme produced by white blood cells involved in the inflammation and destruction of the lung seen in AATD-LD.

“We are very pleased to have the opportunity to partner with Sentynl to advance alvelestat for patients with AATD-LD,” Mereo co-founder and CEO Denise Scots-Knight, Ph.D., said in the release. “We have been preparing alvelestat for a global phase 3 study, backed by positive efficacy data from two phase 2 studies.” California-based Sentynl, which was bought by Zydus in 2017, has three FDA-approved therapies aimed at rare diseases, including Nulibry for molybdenum cofactor deficiency type A and Zokinvy for Hutchinson-Gilford progeria syndrome. “For patients with AATD-LD, the current standard of care is demanding, often relying on generalized therapies or frequent intravenous treatments,” said Sentynl CEO Matt Heck.

The only FDA-approved treatment in the space is pooled plasma alpha-1 antitrypsin protein intravenously administered weekly. Alvelestat has the potential to offer targeting of neutrophil elastase, the direct enzyme that causes tissue damage, in an oral form. Mereo BioPharma Sentynl Licensing deals rare diseases Deals Biotech