Ann: Update on BLA for Graft Versus Host Disease, page-328

What a frustrating few days. Reading the thread, there is a lot of trolling, denial, unrealistic optimism, 'told you so', blaming etc, and some sensible analysis on occasion.

Personally, I'm annoyed at myself. I was blinded by the ODAC recommendation and as a result glossed over the FDA's concerns regarding efficacy. The FDA decision was a risky binary situation, akin to gambling. Unfortunately, as of today, I bet on the wrong outcome. Regardless, I am surprised they didn't approve with post market trial requirements. This seemed to be the logical approach after the ODAC hearing supported efficacy. But when MSB issued a TH yesterday the writing was on the wall that bad news was comming.

My thoughts...

• The CRL is pretty direct, MSB need another trial. Based on today's MSB call, this will likely need to be on adults (adult trial not unexpected).
• MSB hope to have the adult SR-aGVHD trial as a post approval trial. This would be a great result. But what new information will MSB bring to the type A meeting to change the FDAs mind? MSBs request to me seems fair, but I am not confident this will get approved without an Adult trial. If ODAC didn't convince them, what will be different at the Type A meeting? MSB will need an answer one way or another, as they also have an internal sales team set up...
• I've held other stocks that have received CRLs, it is an arduous task back and the FDA will not be moved by us or MSB. But each CRL is unique and will be determined by the information and facts in each case. But again I wonder what new news will MSB bring to change the FDAs mind? Something more compelling than a 9-1 ODAC vote..
• If an adult trial is required before approval for paediatric, cash burn will become an issue in 2021-22. Cash burn can be mitigated though if they have success in any of their other trials. So this is a potential risk linked to how the other trials readout in coming months.
• Covid-ARDS interim results are due early November. This is getting slowly pushed out which is annoying but it doesn't diminish from the potential for success. If you believed in their success for COVID-ARDS previously, this remains on track for an outcome in 2020. This remains the biggest upside item by far. For me, when I clear my head, this is enough to keep me holding MSB (cancelled my sell order for 3.50 this morning)
• There are two phase III trial results (heart & back) due in coming weeks or months. If successful, partners will be announced and we move on with a smile.

In conclusion, a very disappointing & costly day. MSB has lost a lot of its shine and investment appeal today, no arguing on that. But if you have done your research and you believe they will have success in any of their three phase III trials, it's probably worth holding. There are 3 major market catalysts this year (4 if you still include SR-aGVHD).

GLTAH