Sentynl bets up to $475M in licensing deal for Mereo’s rare lung disease asset alvelestat for AATD-LD

Sentynl Therapeutics, a subsidiary of Zydus Lifesciences, has entered a deal potentially worth up to $475 million with Mereo BioPharma for rights to alvelestat, a Phase III-ready oral neutrophil elastase inhibitor for alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD). Sentynl secures the option for exclusive U.S. commercial and global manufacturing rights to alvelestat, while Mereo retains global development leadership and all ex-U.S. commercial rights. Mereo will receive an undisclosed non-refundable option fee, up to $40 million in upfront and R&D payments upon exercise, and up to $435 million in potential regulatory and commercial milestone payments, plus double-digit tiered royalties on U.S. net sales. The companies plan a global Phase III study starting in early 2027, with Mereo leading the trial and regulatory interactions until completion.