Mesoblast dives after deal axed
Novartis has terminated a respiratory distress syndrome cell therapy deal with listed regenerative medicine company Mesoblast.
Novartis has terminated a respiratory distress syndrome cell therapy deal with listed regenerative medicine company Mesoblast.
Mesoblast said it was notified on Tuesday that the Swiss multinational pharmaceutical giant had opted to terminate the exclusive deal, signed in 2020.
The cancellation saw Mesoblast enter a trading halt before the start of trading. When trading resumed, the shares crashed 17.35 per cent to $1.40.
The termination is a major blow for Mesoblast, which stood to pocket an initial payment of $US50m including $US25m in equity, and the potential for up to $US1.25bn in additional milestone and post-commercialisation payments.
Under the deal, Novartis secured an exclusive worldwide licence with Mesoblast to develop, commercialise and manufacture remestemcel-L for the treatment of acute respiratory distress syndrome (ARDS), including that associated with Covid-19.
It was dependent on successful outcomes from the clinical trial of treatment for Covid-related ARDS.
Mesoblast said the observed mortality reduction with remestemcel-L in patients aged under 65 in the completed Covid ARDS trial, despite having missed the primary endpoint, was a sufficiently strong signal to support pursuing an emergency use authorisation (EUA), the most direct path to market.
“Mesoblast is preparing to initiate a pivotal Phase 3 trial that may support a Covid ARDS EUA,” the company said.
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