New Development In Healthcare Stock – MSB

Mesoblast Limited (ASX: MSB) is a regenerative medicine company that develops and commercialises novel cellular medicines for the treatment of serious, life-threatening inflammatory diseases, using its innovative technology platform inclusive of Mesenchymal Precursor Cells (MPCs) and mesenchymal stem cells (MSCs) with a well-defined multimodal mechanisms of action.

Products in the Pipeline

Mesoblast has a robust portfolio of regulatory approved as well as late-stage pipeline products including:

  1. TEMCELL® HS Inj (first allogenic regenerative medicine approved in Japan) for Acute Graft Versus Host Disease.
  2. Alofisel® (first allogenic regenerative medicine approved in Europe) for the treatment of Fistula, with three products in Phase 3 trial as described below in figure.
  3. Remestemcel-L used for Acute Graft Versus Host Disease (aGVHD). Its rolling Biologics Licence Application submission to FDA is in the pipeline.
  4. Revascor is used in two therapeutic areas; Advanced Heart Failure and End-stage Heart Failure. Phase 3 trial for Advanced Heart Failure is likely to complete by the year-end 2019 and confirmatory Phase 3 trials for End-stage Heart Failure, expected to commence before the CY2019 end.
  5. MPC-06-ID for chronic lower back pain, Phase 3 trial is underway.
  6. MPC-300-IV used for Rheumatoid Arthritis and Diabetic Nephropathy; Phase 2 trials have been completed.

Products in the pipeline

In this article, we would focus on Mesoblast’s latest development regarding the Phase III drug candidate, MPC-06-ID. Mesoblast Limited recently announced that the company established strategic partnership with a leading pain management company, Grünenthal, with an aim to develop and commercialise, MSB’s Phase III product candidate, MPC-06-ID, for the treatment of chronic lower back pain in degenerative disc disease (DDD), as declared on 10 September 2019.

Some key highlights under the partnership are as follows
  1. Grünenthal would have exclusive rights to develop and commercialise MPC-06-ID to be used for discogenic chronic back pain, disc degeneration and/or functional disability within European and Latin America/Caribbean Territory. However, Mesoblast would retain the license for the remaining parts of the world, including the United States and Japan markets.
  2. The Phase III trial for MPC-06-ID in U.S. enrolled in March 2018, is currently ongoing and is in finalisation stage, the readouts are planned in mid CY2020. This is 404 patients 2:1 randomised Phase 3 study in which the effect of 6 million MPC with or without hyaluronic acid (HA) was compared against saline control. A 12 months safety and efficacy follow up had been completed in all patients showing efficacy for both 6 million MPC arms (with and without HA), with a follow-up scheduled at 24 months in Q1 CY2020.
  3. Under this partnership, both Grünenthal and Mesoblast will work together on the overall developmental plan this trial in Europe and it is expected that the outcomes of this confirmatory Phase III trial in the US and Europe would underpin U.S. FDA and European EMA regulatory approvals for MPC-06-ID.
  4. The company earlier reported the results of Phase II trial in US, in which a single intra-discal injection of MPC-06-ID, using 6 million allogeneic mesenchymal precursor cells (MPCs) per unit dose, showed expressive and durable improvements in pain intensity and functionality for minimum three years.
  5. In addition, it was reported that preceding the product launch, Mesoblast would receive upfront and milestone payments as well as commercialisation milestone payments amounting up to US$150 million, out of this, a fund up to US$45 million is assured within the first year of this partnership including- US$15 million signing amount, US$ 20 million after the grant of regulatory clearance for commencing confirmatory Phase 3 trial in Europe, and US$ 10 million on achieving positive clinical and manufacturing outcomes. Furthermore, Mesoblast stated that the cumulative milestone payments might perhaps surpass US$1 billion based on the results of Phase 3 trial, product acceptance as well as adoption by the patients. It was further agreed that on sale of the product, Mesoblast would receive tiered double-digit royalties.
Contract Benefits
  1. Collaborating with a strong partner would lead to commercialisation, supply, sales & advertising of MSB’s products mainly focusing on pain, with a team of nearly 1600 employees across Europe, Latin America & US.
  2. Aid further development in product approval pathway.
  3. Funding secured would reduce MSB cash outflow.
  4. Authentication of Mesoblast’s Technology Platform.

Both, Grünenthal’s CEO, Gabriel Baertschi and Mesoblast’s Chief Executive, Dr Silviu Itescu, were extremely pleased and excited with this partnership.

Grünenthal’s CEO commented, “This is an important next step in working towards our vision of a world free of pain.”

What is MPC-06-ID?  A novel prototype for the treatment of Chronic Low Back Pain.
  1. Inflammation and degeneration of intervertebral disc, caused by age, trauma or genetic pre-disposition in turn, resulting in spinal cord instability & boney changes as well as mechanical stress, eventually causing significant chronic lower back pain (CLBP).company resource
  2. Minimal treatment options are available for patients who fail the conservative treatments therapy (mainly opioids and surgical intervention) inflicting illness burden on patients in terms of hospital costs.
  3. In US/EU, nearly 50% of moderate-to-severe CLBP patients head for disease diagnosis and treatment. Hence, there is an unmet need for an alternative therapy for the reduction in pain and gaining back the spinal cord functionality, ultimately preventing opioid use and surgery.
  4. Across seven pharmaceutical markets, approx. 10 – 15% of the adult population suffers from Chronic Lower Back Pain with a prevalence of nearly 33.4 million in the US, 39.4 million in EU5 (UK, Spain, Italy, Germany, France) and 14.9 million in Japan, offering a great market opportunity for MPC-06-ID.
  5. MPC-06-ID is a Potential First Line for DCLBP Refractory to Conservative Treatments, targeting moderate to severe DCLBP.
Mesenchymal Precursor Cells or MPCs
  1. Used as allogeneic, off-the-shelf therapeutics that qualifies the strict regulatory requirements with a well-defined release criterion and batch-to-batch reproducibility.
  2. The key characteristics of MPCs include secretion of a wide range of endogenous painkilling and anti-inflammatory molecules known for reducing inflammation and helping host tissue repair and regeneration via cell-to-cell interactions.
  3. Additionally, in degenerative disc disease (DDD), these MPCs help in regeneration of physiological disc by facilitating host chondrocytes propagation and their secretion of tissue matrix component.
  4. Besides, lack of immunogenicity and capacity for substantial expansion in culture are the key features of these mesenchymal precursor cells.

Mesoblast’s operational activities and financial highlights for the fourth quarter of 2019 and full- year ended 30 June 2019 has been notified in full-year results report on 30 August 2019.

  1. Mesoblast held US$50.4 million (A$71.9 million) cash on hand, as of 30 June 2019.
  2. In the financial year 2019, MSB’s total revenue remained stable at US$16.7 million in comparison to US$17.3 million for the financial year 2018.
  3. A remarkable 37% year on year growth in revenues from royalties on TEMCELL sales in Japan FY2019 compared to FY2018.
  4. In the fourth quarter of 2019, an increase in royalties revenue by 54% to US$1.7 million was recognised.
  5. Owing to investment in commercial manufacturing, an increase of US$9.9 million reported.
  6. Owing to increased expenditures from strategic partnerships, operating net cash outflows observed a decrease for 2019 period.
Stock Performance

MSB’s shares are trading at A$1.975, up by 3.947 % (as on 12 September 2019, at AEST 12:26 PM). The market cap of the company stands at A$947.45 million and has nearly 498.66 million outstanding shares. The 52 weeks high and low prices were noted at A$2.470 and A$1.015, respectively. The stock generated a YTD return of 50.20% and a return of 61.02% in the last 6 months period.


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