November 20th, 2020 – Australia-based Mesoblast Limited entered into a $50 M deal with pharma giant Novartis for the development, manufacture, and commercialization of Mesoblast’s mesenchymal stromal cell (MSC) product remestemcel-L, for treatment of acute respiratory distress syndrome (ARDS), including that associated with COVID-19. The Swiss drugmaker plans to expand its respiratory treatment pipeline by acquiring the off-the-shelf cell therapy from Mesoblast.
“Our collaboration with Novartis will help ensure that remestemcel-L could become available to the many patients suffering from ARDS, the principal cause of mortality in COVID-19 infection. This agreement is in line with our corporate strategy to collaborate and partner with world-leading major pharma companies to maximize market access for our innovative cellular medicines”, said Dr. Silviu Itescu, Chief Executive officer of Mesoblast.
Under the terms of the agreement, Novartis will pay $50 M upfront and invest $25 M in equity. Additional payments totaling up to $505 M is payable contingent upon achieving certain pre-commercialization milestones and up to $750 M upon reaching post-marketing sales milestones. Both companies may co-fund the development and commercialization of remestemcel-L for other non-respiratory indications.
Remestemcel-L as COVID-19 Therapy
Remestemcel-L is a cell-based therapy consisting of culture-expanded mesenchymal stromal cells (MSCs) derived from an unrelated donor’s bone marrow. As per Mesoblast, the therapy is immunomodulatory; it can suppress cytokine storms that are a feature of various inflammatory conditions, including COVID-19. The company said that it works by reducing pro-inflammatory cytokines and increasing anti-inflammatory cytokines. Remestemcel-L is also being developed for inflammatory diseases in children and adults, including steroid-refractory acute graft versus host disease (SR-aGVHD)
Remestemcel-L has shown an astounding 83% survival rate in patients with COVID-19-related ARDS. The therapy was used earlier this year in March in 12 patients requiring mechanical ventilation in an open-label compassionate use program. The therapy is currently under evaluation in a Phase 3 trial in COVID-19 related ARDS with plans in place for another phase III, but in non-COVID-19 related ARDS, shortly after the deal is final.
The ongoing Phase 3 collaborates with the Cardiothoracic Surgical Network and evaluates remestemcel-L in a 300-patient trial and is expected to be done by early 2021. The two companies will team up again to “develop critical quality attributes for remestemcel-L that meet FDA expectations” for non-COVID-19-related ARDS if the current 300-patient Phase 3 study becomes successful.
“We believe that Novartis is uniquely placed to advance this important potential new therapy,” said John Tsai, head of Global Drug Development and chief medical officer for Novartis. “Novartis is committed to, and has demonstrated success with, cell-based therapies and transforming care for a spectrum of respiratory diseases.”
In light of the news, Mesoblast shares touched a high of $14.28 from Thursday’s closing price of $11.79.
By Sangeeta Chakraborty, Ph.D.
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