Mesoblast Limited Shares Soar On Completion Of Partnership With China’s Tasly Pharmaceutical

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Mesoblast Limited (ASX: MSB) rushed on Australian Securities Exchange after the group completed long standing strategic partnership deal with China’s Tasly Pharmaceutical Group. At the time of writing, the stock price of MSB has jumped as high as 3.275% or $0.065 to trade at $2.050.

On Friday, investors took a deep breath when Mesoblast announced the successful completion of strategic investment and long-term partnership with Tasly Pharmaceutical Group, allowing Mesoblast to extend its commercial footprints in China.

The transaction will bring US$40 million to Mesoblast in exchange of providing the exclusive rights to Tasly for the development, manufacturing and commercialization of its cardiovascular cell therapies in China. These product candidates include Mesoblast’s Mesenchymal Precursor Cell (MPC) candidates, i.e. MPC-25-IC to prevent and cure heart attacks and MPC-150-IM designed for the prevention and treatment of heart failure. 

The consideration of US$40 million which counts to AUD$57 million has been received in two tranches from Tasly, one, Mesoblast has received US$20 million upfront as technology access fees and the other, US$20 million on equity purchase from Tasly in Mesoblast.

In the settlement of Tasly’s strategic investment in MSB equities, Mesoblast has issued 14,464,259 fully paid ordinary shares to Tasly at AUD$1.86 per share, majority of which remains subject to voluntary escrow until 12 October 2019.

The announcement read that on securing regulatory approval for product candidates in China, Mesoblast will receive US$25 million. Mesoblast is also entitled to receive royalties on net product sales which may range to high double digits along with six additional payments if sale of products reaches certain pre-decided thresholds.

The completion of transaction comes after the China’s government approval to Tasly’s overseas direct investment. The approval was received in late August this year.

Chairman of Tasly Pharmaceutical Group Mr. Yan Kaijing stated that Tasly eyes Mesoblast’s cellular medicine technology to potentially transform the cardiovascular care in China. He added that this is the reason why Tasly has entered into a long-term partnership and made strategic investment in cellular medicine company Mesoblast.

Also, it has been informed that Mesoblast and China’s pharmaceutical company Tasly will create a joint steering committee with fair and equal representation of both the interest parties. The committee is aimed to oversee the manufacturing, development and commercialization activities for the cardiovascular product candidates in China. The members also intend to jointly accelerate development by leveraging clinical results in China, the United States and other relevant areas with the view to support regulatory submissions required for the candidates.

In the closing statement to the transaction Mesoblast Chief Executive Dr. Silviu Itescu stated that Mesoblast is pleased to joint hands with China’s one of the largest pharmaceutical company Tasly which has shown fastest growth in world’s healthcare and biopharmaceutical market.

The market sentiment seems to be quite bullish on Mesoblast’s completion of strategic investment and partnership with China’s Tasly Pharmaceuticals Group. Mesoblast’s stock is trading at $2.050 on 12 October 2018 (2:20 PM AEST). Further, the stock has seen a performance change of +16.08% over the past one year.

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