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  • Mesoblast shares are at a 10 month high after it partnered with Grünenthal to commercialise its treatment for lower back pain
  • Grünenthal with sell Mesoblast’s MPC-06-ID in Europe and Latin America
  • Mesoblast will receive an up from payment of $150 million

Shares in Mesoblast are at a 10 month high this morning after it partnered with German pharmaceutical giant, Grünenthal to commercialise its treatment for chronic lower back pain.

Under the partnership, Grünenthal will have exclusive commercialisation rights to sell MPC-06-ID in Europe and Latin America.

“We are very pleased to enter into this strategic partnership with Grünenthal, a world leader in innovative approaches to pain management,” Mesoblast Chief Executive Dr Silviu Itescu said.

“Together with Grünenthal, we plan to bring an important new class of therapy for pain management to the many patients suffering from degenerative disc disease.”

Mesoblast will receive up to US$150 million in upfront and milestone payments before the product launch and further commercialisation milestone payments.

These payments include commitments up to US$45 million, US$15 million on signing, US$20 million on receiving regulatory approval and US$10 million on certain manufacturing outcomes.

Cumulative payments could exceed US$1 billion depending on the final outcomes of Phase III studies and patent adoption.

Mesoblast will also receive tiered double digit royalties on product sales.

The back pain treatment, MPC-06-ID is being studied as a Phase III clinical trial in the United States and is scheduled for completion next year.

It was important to note that a single intra-discal (in a disc in the spine) injection of MPC-06-ID, using a unit dose of six million allogeneic mesenchymal precursor cells (MPC) resulted in meaningful and durable treatments for patients.

It is derived from bone marrow from healthy volunteers and then injected directly into the targeted and damaged area. It is hoped the bone marrow cells will reduce inflammation and encourage regeneration.

Over seven million patients in Europe are thought to suffer from chronic low back pain (CLBP) caused by degenerative disc disease.

This disease involves the inflammation and degeneration of the intervertebral discs due to factors such as age, trauma or genetics.

The lack of cushioning in the spine can result in instability, mechanical stress and bony changes of the spine. This can cause significant pain and loss of function.

Most existing therapies do not address the underlying mechanisms of the changes and provide limited symptomatic relief.

Invasive therapies, such as spinal fusion, are the last resort however, the limited evidence for long-term relief remains a concern.

If trial results from Phase II are confirmed then MPC-06-ID could offer a new treatment option which can provide relief for at least three years and aim to retain the natural fusion and anatomy of the disc.

Mesoblast and Grünenthal have agreed on an overall development plan, for MPC-06-ID to meet European regulatory requirements. As part of this plan both companies will collaborate on the study design for the Phase III trial in Europe.

The results from the two Phase III trials are expected to support both U.S. FDA and European EMA regulatory approvals.

Mesoblast shares are currently trading for $1.73, up almost 19 per cent, in a market cap of $725.5 million.

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