Mesoblast and its German pharmaceutical partner Grünenthal have downgraded their collaboration agreement by about $US37.5 million for the commercialisation of the drug therapy candidate for chronic lower back pain.

The Melbourne-based biotech will now be entitled to $US112.5 million ($150 million) – of which $US17.5 million has already been received –before the product rexlemestrocel-L launches in Europe, if certain clinical and regulatory milestones, and reimbursement targets are achieved.