Back in June 2016, MSB put the stock into trading halt and then suspension for 14 days when Teva gave up it's rights to the heart failure program.
So on 1 June 2016 MSB obviously found out, then on the 14th it released and announcement with a positive spin... market didn't buy it, and the stock got decimated.
In the long term, it turned out that what management said was actually on the ball... look at where we are now with the CHF program, Tasly partnership in China and a phase 3 read out in weeks.
But in the short term, the market will punish any setbacks.
The point of me raising the above is that Mesoblast are not afraid to put this stock into suspension if they feel they need time to work some things through internally and behind the scenes.
Where most companies might just rip off the band-aid and announce bad news, Mesoblast have shown in the past that they prefer to line up their ducks internally as much as possible before informing the market.
I am purely speculating of course, but based on their past actions... this trading halt is not out of line with them receiving a CRL and hitting the brakes and wanting to figure out exactly what the next steps are before the market is informed.
I'm going to try dispel some popular ideas going around...
Some suggest that the FDA has contacted MSB that their decision is due in the next couple/few days... but sadly that is not how the FDA works. If they are a little late, they will simply be a little late. The PDUFA date is a target action date, they have been late many times in the past.
Conversely if they were aware of being weeks or months late, then they would inform the company and if that has happened .. but that is unlikely to happen on the PDUFA date itself, rather it would have happened a while ago.
Late submission of data or the FDA requesting more information is also very unlikely on the PDUFA date itself... weeks or days before yes, but not on the PDUFA date. If the FDA has outstanding questions/information requests, it goes into a CRL.
The FDA's action package and recommendation would have been drafted around 3 weeks ago, shortly after the meeting with MSB after the ODAC. Since then, there was unlikely any interaction between MSB and the FDA. The action letter with the approval or CRL would have gone through many levels of reviews and only issued after final sign-off which would have targeted the PDUFA date. So a trading halt on the PDUFA date is a very strong signal that the FDA has issued that action letter.
It also makes no sense for MSB to go into a premeditated trading halt on the PDUFA date, the FDA action could be a week late... does MSB suspend trading waiting for the FDA? And if MSB were to go into a premeditated trading halt, it would have done it in the same fashion as the ODAC meeting... ASX went into trading halt right after close of trading prior to the ODAC meeting and the Nasdaq was halted accordingly. The trading halt just after the market open on the NASDAQ suggests that it was a scramble to get that trading halt in place.. if it was premeditated, there was no way trading would have commenced on the Nasdaq on the 30th.
If my suspicion above is accurate, then the wording in the announcement coming from management on Monday (they may even suspend trading)... is critical as to how long the delay for approval is likely to be. But after a CRL is issued, the quickest turn-around for approval is 3-4 months.. even if the issues are minor process changes to manufacturing.
I of course hope I am wrong, but I haven't come across anything that makes any remote sense other than a CRL being issued in the US morning yesterday.. and MSB are taking their time to work through it.
This would be disappointing, but it was always a risk going into this week ... many chose to ignore it, and those are probably the ones finding it hardest to accept this as a potential outcome. But to me, this looks like the most likely outcome and one that I am willing to accept and have plans on how I will react if such news is announced.
I hope you find the time to prepare yourself for the worst, and hope for the best.
(20min delay)