Coronavirus: Mesoblast drug deal good for patients and investors
Stem cell treatment developer Mesoblast says it had teamed up with a biotech giant to develop its flagship drug for treatment of acute respiratory distress caused by COVID-19.
Australian-based stem cell treatment developer Mesoblast rose by 11 per cent on the ASX on Friday after announcing it had teamed up with a biotech giant to develop its flagship drug for treatment of acute respiratory distress caused by COVID-19.
Chief executive Silviu Itescu revealed on Friday morning the company had signed a licensing and collaboration deal with Novartis, a Swiss-based pharmaceutical company, which would include a $US50m ($69m) payment to Mesoblast.
“Our collaboration with Novartis will help ensure that remestemcel-L could become available to the many patients suffering from acute respiratory distress syndrome (ARDS), the principal cause of mortality in COVID-19 infection,” Mr Itescu said.
Mesoblast is investigating the effectiveness of remestemcel-L in treating ARDS in coronavirus patients, the success of which is yet to be reported.
The company has also been trying to get the treatment approved for use against graft-versus-host disease in children.
Under the deal, Novartis will pay Mesoblast $US25m upfront and will also spend $US25m in buying Mesoblast shares.
In an announcement to the stock exchange on Friday, the company told investors it could receive a total of $US505m for pre-commercialisation milestones and potentially a further $US750m in sales milestones, depending on the commercialisation of products in future.
Mesoblast’s shares oscillated in the first quarter of this financial year after the US Food and Drug Administration asked the company to provide more data before approving the treatment.
The company met with the FDA on November 17 to discuss the approval process for remestemcel-L for graft-versus-host disease.
Mesoblast reported a $US24.5m loss in the September quarter. It did not receive any milestone payments in the quarter, with revenues dropping from $US17m in the same quarter last year to just $US1.3m.
The business spent $US19m on research and development, $11m on manufacturing.
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