- Stem cell researcher Mesoblast (MSB) has entered a licence and collaboration agreement with Novartis to commercialise its remestemcel-L therapy drug
- Novartis is a Swiss-based pharmaceutical company with nearly two decades of experience in delivering products to help people with respiratory issues
- The companies will initially target remestemcel-L on treating COVID-19 related and non-COVID-19 related acute respiratory distress syndrome (ARDS)
- The drug is being used in a 300-patient COVID-19 ARDS, study but Novartis will initiate a non-COVID-19 related study
- Novartis will make an upfront payment of US$50 million (roughly A$68.7 million) to Mesoblast
- It may also receive an additional US$750 million (roughly A$1.03 billion) if certain sales milestones and double-digit royalties are achieved
- Despite the good news, Mesoblast reported a US$24.5 million (roughly A$33.6 million) loss after tax for the September quarter
- It ended the period with around US$108.1 million (roughly A$148.5 million) in the bank.
- Mesoblast's shares have gained 13.8 per cent and are trading for $3.72
Mesoblast (MSB) has entered an exclusive licence and collaboration agreement with Novartis to commercialise Mesoblast's remestemcel-L therapy drug.
Novartis is a Swiss-based multinational pharmaceutical company. It has almost 20 years' experience in delivering first-in-class products that address unmet needs for people suffering with respiratory issues.
The deal will see Novartis assist with developing, manufacturing and commercialising Mesoblast's mesenchymal stromal cell (MSC) product, remestemcel-L. Initially, the companies will focus on developing the treatment of acute respiratory distress syndrome (ARDS), including that associated with COVID-19.
"Our collaboration with Novartis will help ensure that remestemcel-L could become available to the many patients suffering from ARDS, the principal cause of mortality in COVID-19 infection," Mesoblast CEO Dr Silviu Itescu said.
Novartis will make a US$50 million (roughly A$68.7 million) upfront payment, including US$25 million (roughly A$34.3 million) in equity, to Mesoblast.
Despite current standard of care, which includes extensive ICU treatment and mechanical ventilation, ARDS is an area of unmet need with a high mortality rate.
Currently, remestemcel-L is being studied in COVID-19-related ARDS in an ongoing 300-patient phase three study. However, Novartis plans to initiate a trial in non-COVID-19-related ARDS and will fully fund global clinical development for all-cause ARDS.
As potentially the first ARDS therapy, remestemcel-L will be tested to treat the condition and improve patient outcomes.
Further terms of the transaction include Mesoblast potentially receiving US$505 million (roughly A$693.4 million) once pre-commercialisation milestones for ARDS indications are achieved.
It may also receive additional payments of up to US$750 million (roughly A$1.03 billion) if certain sales milestones and double-digit royalties are achieved.
Additionally, Mesoblast has updated the market on its financials for the September quarter.
The billion-dollar company spent US$19.3 million (roughly A$26.5 million) — a US$6.9 million (roughly A$9.4 million) increase year-on-year. This was due to costs relating to the COVID-19 ARDS clinical trial, payments to employees and consultants, and pre-commercial activities for remestemcel-L.
The trial also largely contributed to increased manufacturing costs, which totalled US$11.9 million (roughly A$16.9 million) in the September quarter, compared to just US$2.7 million (roughly A$3.7 million) in FY20's first quarter.
Mesoblast also reported a US$24.5 million (roughly A$33.6 million) loss after tax compared to US$5.5 million (roughly A$7.5 million) in FY20's first quarter.
At the end of September, it had around US$108.1 million (roughly A$148.5 million) in the bank.
Mesoblast's shares have gained 13.8 per cent and are trading for $3.72 at 11:29 am AEDT.