The company aims to buy drugs discovered by big pharmaceutical companies and fund and design later-stage clinical trials. It opened last year with backing from Neil Woodford and Invesco Perpetual, among others.

Mereo said on Monday it had raised 14.8 million pounds in a private placing and a cash investment by Novartis by way of a convertible loan, in addition to the 76.5 million pounds raised or committed last year.

The private placing was completed at a price of 221 pence a share, it said. The stock will start trading on June 9.

Chief Executive Denise Scots-Knight said the funding would help advance the clinical development of its candidates for the treatment of brittle bone syndrome, acute chronic obstructive pulmonary disease and hypogonadotropic hypogonadism, or low testosterone production, in obese men.

"Our strategy is to build, over time, a diverse portfolio, and having publicly traded shares will provide additional flexibility to secure the next product candidates, which are likely to be primarily sourced from large pharmaceutical companies," she said.

(Reporting by Paul Sandle, editing by Larry King)