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Mesoblast eyes COVID-19 trial results by end of yearFor our free coronavirus pandemic coverage,
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By Emma KoehnMay 28, 2020 — 11.03am
Stem cell biotech Mesoblast believes it will know how effective its potential COVID-19 treatment is in the next four months and while it is pinning its hopes on a positive result, investors have been warned there are uncertainties.
The boss of the $2 billion biotech Dr Silviu Itescu told investors on a quarterly earnings call on Thursday that the business must prepare its manufacturing capabilities for the possibility of success and this was a key driver of the company's most recent $138 million capital raise.
Mesoblast CEO Dr Silviu Itescu said the company had to prepare its manufacturing capability for expansion of its stem cell product uses. CREDIT:JOSH ROBENSTONE
"That is a major rationale — we have to be able to invest in capacity," he said.
News of the coronavirus research has seen the company's share price rocket close to 250 per cent since the ASX's widespread selloff in late March. Mesoblast shares bounced 4 per cent at the market open on Thursday, to $4.00.
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The company is undertaking a phase-3 clinical trial involving 300 patients, to test whether remestemcel-L can help those who have severe respiratory distress due to coronavirus.
Updating investors this morning, management said it hoped early data from the trial would be available in two months with a final analysis to be completed before the end of the year.
The company's quarterly numbers outline that the research pipeline will be expensive, however, and there are risks for those that buy in.
Mesoblast has a number of research projects underway and hopes to get regulatory approval to launch its remestemcel-L product later this year to treat patients with graft vs host disease, caused by an immune response after bone marrow transplants.
Mesoblast reported a 113 per cent increase in revenue to $US31.5 million ($47.6 million) in the nine months to March, driven by an increase in royalties for its stem cell products in Japan.
While it curbed after-tax losses by one third, it is still running at a nine-month loss of $65 million.
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Investors were warned in the quarterly report that "further cash inflows will be required for the group to meet its forecast expenditure".
The company says it has about $235 million on hand after raising
$138 million in an institutional placement a few weeks ago.Mesoblast is anticipating further milestone payments, including through a strategic partnership with German pharmaceutical firm Grünenthal.
While management said they are confident the business will be able to realise those payments and continue as a going concern, there is not 100 per cent certainty over this.
"We anticipate that we will continue to incur losses for the foreseeable future, and we expect the
losses to increase as we continue the development of, and seek regulatory approvals for, our cell-based product candidates, and begin to commercialise any approved products either directly ourselves or through a collaborator or partner," Mesoblast said in its quarterly report.
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