The Melbourne, Australia-based Mesoblast Limited (ASX: MSB) is a bio-pharmaceutical company developing proprietary allogeneic cellular medicines with a strong emerging pipeline of products. Today, the company announced that its Japan-based licensee JCR Pharmaceuticals Co. Ltd. has filed to extend the marketing approval of TEMCELL®1 HS Inj. for use in patients infected with Epidermolysis Bullosa (EB).
Based on the promising result from an investigator-initiated trial at Osaka University Hospital, where TEMCELL was subcutaneously administered, JCR has been given the Orphan Designation for TEMCELL to treat EB. As of now, both the units have amended their License Agreement to enable JCR to access Mesoblast’s mesenchymal stem cell (MSC) wound healing patents and further develop and commercialise TEMCELL for EB. Going forward, JCR also aims to receive a label extension for intravenous delivery of TEMCELL in Japan.
In Japan, TEMCELL was the first allogeneic cellular medicine to get full regulatory approval for the treatment of acute graft versus host disease (aGVHD). During the six months to December 31st, 2018, Mesoblast recorded a 43% rise in the royalty income on sales of TEMCELL for aGVHD in the country.
Besides receiving royalties on the sales of TEMCELL for EB, Mesoblast will also have access to the clinical data generated by JCR in Japan to support the adoption of its MSC product candidate remestemcel-L in other wound healing applications as well as other international markets for EB.
For instance, according to the international branch of the Dystrophic Epidermolysis Bullosa Research Association (DEBRA International), there are close to 25,000 people suffering from EB in the United States with no effective treatments available till now. Thus, in the upcoming months, Mesoblast intends to apply for the United States FDA regulatory approval for the launch of remestemcel-L to treat aGVHD.
On March 22nd, 2019, the company appointed Joseph R. Swedish as the new non-executive Chairman to accelerate its transition to a commercial stage company globally.
As per the financial results for the half-year ended December 31st, 2018 (H1 FY2019), Mesoblast posted a pro forma cash on hand of USD 92.0 million. The figure includes USD 15.0 million received in January 2019 from Hercules Capital, Inc. and additional non-dilutive capital of USD 35.0 million. Besides, the revenue remained stable at USD 13.5 million, slightly lower as compared to USD 14.6 million in the first half of FY2018.
The investments into commercial manufacturing increased to USD 8.0 million in preparation for potential aGVHD approval. The total expenses incurred in the research and development for H1 FY2019 amounted to USD 34 million, up 8% on USD 31.6 million recorded in the first half of FY2018. Besides, manufacturing and management expenses also marked rise during the period. The operating cash outflows reduced by 50% to USD 17.5 million from USD 35.22 million.
Mesoblast has a market valuation of over AUD 690 million with ~ 498.63 million outstanding shares. On March 25th, the MSB stock closed the market trading at the price of AUD 1.415, up 2.166% by AUD 0.030. MSB has also generated a positive YTD return of 9.49%.
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