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Summary
- Mesoblast disclosed the ODAC of the US FDA voted overwhelmingly in favour that the available data support the efficacy of remestemcel-L.
- Following the announcement, MSB’s share price zoomed and ended the trading session over 39% higher.
- RYONCIL has been accepted by the FDA for Priority Review with an action date of 30 September 2020, under the PDUFA.
- If authorised by the PDUFA, Mesoblast intends to launch RYONCIL by this year in the United States.
The Australian healthcare sector often grabs the attention of investors with the potential of providing remarkable returns. Several variables are responsible for increasing an investor’s interest in the healthcare industry. Some are new drug discovery, recent developments, clinical developments, approval from the US Food and Drug Administration (FDA) and more.
GOOD READ: Drug discovery and development: Health care stocks in Australia
The process of getting an FDA approval is a critical feature that can give a good suggestion on the future of any healthcare company. Generally, a new drug approval by the FDA will lead to a higher share price for any company. However, taking a call based on the FDA’s pending decision, even if things look favourable, could be detrimental for an investor as an adverse decision can have a significant impact on the share price.
An FDA approval can also play a considerable role in an ASX-listed healthcare player’s fate as several Australian based companies seek approval in the biggest market in the world.
With this backdrop, let us look at an ASX-listed healthcare sector company Mesoblast Limited (ASX:MSB) whose share price skyrocketed ~39% to close at A$4.700, after its important announcement that the US FDA advisory committee voted nine-to-one in favour of remestemcel-L for efficacy in children with SR-aGVHD.
Let us delve deep and know why the stock price of MSB skyrocketed today:
About Mesoblast Limited
Mesoblast Limited is using its proprietary mesenchymal lineage cell technology for developing as well as commercialisation of innovative allogeneic cellular therapies to treat complex inflammatory diseases that are resistant to the conventional standard of care.
The Company’s Phase 3 product candidates include:
- Remestemcel-L (RYONCIL™) for steroid-refractory acute GVHD in children.
- Remestemcel-L for moderate to severe ARDS induced by COVID-19 infection.
- REVASCOR®for the treatment of advanced chronic heart failure.
- MPC-06-ID for treating chronic lower back pain caused by degenerative disc disease.
Remestemcel-L Achieved Major Regulatory Milestone After Getting Votes from US FDA
On 14 August 2020, Mesoblast announced that the Oncologic Drugs Advisory Committee of the United States Food and Drug Administration (FDA) voted overwhelmingly in favour that the available data support the efficacy of remestemcel-L (RYONCIL™) in pediatric patients with SR-aGVHD (steroid-refractory acute graft versus host disease).
RYONCILTM accepted for Priority Review by the FDA
RYONCIL has been accepted by the Food and Drug Administration for Priority Review with an action date of 30 September 2020, under the PDUFA (Prescription Drug User Fee Act).
Once authorised by the PDUFA date, Mesoblast intends to launch RYONCIL in the US before the end of the year.
The Oncologic Drugs Advisory Committee (ODAC) is an independent panel of specialists that assesses safety and efficacy of data and on this basis makes appropriate suggestions to the FDA. However, the final decision regarding the approval of the product is made solely by the FDA, after considering the recommendation of the ODAC.
Highlights from the Quarterly Activity Report
On 20 July 2020, Mesoblast provided an activity report for the fourth quarter of the FY 2020 (ended 30 June 2020).
- Mesoblast reported cash on hand of US$129.3 million at the end of the fourth quarter.
- In May 2020, the Company finalised a capital raise of nearly US$90 million from global institutional investors.
- Over the upcoming one year, MSB might have access to an additional US$67.5 million via existing financing facilities as well as strategic partnerships.
- Total operating activities in the fourth quarter resulted in net cash usage of approximately US$19.6 million.
The Company also provided detail on Phase 3 clinical study of Remestemcel-L for COVID-19 induced Acute Respiratory Distress Syndrome (ARDS).
The clinical protocol evaluating remestemcel-L in COVID-19 patients in Phase 3 clinical trial was based on outcomes from a pilot study using remestemcel-L under emergency compassionate care at Mt Sinai Hospital in New York, with nine of 12 (75%) of patients with symptoms of modest to severe ARDS successfully removed from the ventilator and discharged from the hospital within an average of ten days.
DO READ: Mesoblast Receives FDA Green Flag for COVID-19 Drug Application, Share Price Skyrockets~35 per cent
Additionally, the Company mentioned that up to thirty prominent medical centres in the US are anticipated to participate in the clinical study, which is projected to complete recruitment of patients in September 2020.
On 14 August 2020, MSB share price zoomed up by 39.053% to A$4.700, with a market cap of nearly A$1.98 billion. Shares of MSB have generated a 64.88% return on a year to date basis and a 17.77% return in the last six months.
ALSO READ: COVID-19 Treatment: Mesoblast partners with the CTSN to Conduct Human trials of Remestemcel-L
Bottomline
Mesoblast Limited is progressing well with its product candidates in late-stage clinical development. Today’s major regulatory milestone after the US FDA vote demonstrates that the Company is moving ahead on its journey to growth.
