MSB (ASX) CEO Itescu needs to go

Originally posted by LeftYahoo ↑

Haven't posted on HC in a while, and I'm deliberately choosing this thread to add my 2 cents worth...

Up to now I've been a big supporter of SI and management. But the Company owes investors a better explanation for CRL #2 than we heard during the CC. As I wrote on this board several years ago, the US laws that established the FDA were written by Congress following medical disasters that occurred in children. Little Joanie who died in the 1930's when her kidneys were destroyed by a pharmacist who tried substituting radiator fluid to formulate her cough syrup, why not. And then the laws were tightened further in the 1950's following the thalidomide disasters that caused unimaginable harm to children. Most modern medicines start out with an approval in adults. Labels are then extended to teenagers and perhaps eventually to younger children. No one twists a company's arm to start with children and then work backwards to adults. Such an approach requires a compelling argument... a compelling medical argument. I have not heard such an argument in this case where 80% of GvHD cases occur in adults by the Company's own estimates.

The FDA is especially on guard for Companies that try to slip through a side door using children as the argument. Forget the cries of corruption or control by big pharma. Maybe there's an element of that, who knows? But if you're a small biotech that's going to start with an approval in babies and young children you had better have a compelling medical reason... and iron-clad efficacy data.

After the first CRL the FDA advised the company to run another RCT "in adults or children". Since safety has not been an issue, that means the FDA was not convinced by the data on product EFFICACY, full stop. Yes, I know about the 9 to 1 vote. Yes, I know a single-arm study in children had been authorized. I repeat. The powers that be were not convinced on efficacy. Rather than heeding the recommendation and putting up some incontrovertible data from an RCT in adults, the Company opted to dispute the CRL through a "well-established dispute resolution process". An ex-FDA official was hired to help write a new BLA. We also learned in the first CRL that the company had CMC issues that had to be resolved. Following a meeting with OTAT we learned they were "taking the right approach" to resolving the issue which involved establishing Critical Quality Attributes of the cells to ensure batch consistency. At no time did the FDA revoke the Company's IND which allows the conduct of clinical trials in the US. I believe any such revocation would have been a reportable event. I also believe that short of such revocation the Company could have run a trial if they wanted to. In short, there was no reason for the company not to pursue a new RCT in adults months ago, if not years ago.

Nevertheless, the Company opted to dispute the first CRL. Had they received some kind of reassurance such an approach could succeed? One would think so. We were told of cordial and ongoing dialog with the Agency and a designation of "reasonable approach on the CQA issue" following a meeting with OTAT. We were told that Dr. Krause, well versed in the intricacies of the Agency, had gone over the new BLA in great detail...we were told a manufacturing inspection identified no issues and that 4-year follow up data established a durable medical response... we were told management and the Board were "excited" about the prospects for approval, that recruitment was under way for commercial staffing.

And now after months of delay, the black eye of a second rejection, and a 60+% hit on market cap... we're simply told the Company plans to run a trial in the highest-risk adults with GvHD.. Maybe. Depending on another meeting with the FDA.

The question remains: What went wrong and why didn't you do that before?? Or else pursue some other indication.

Shareholders depend on management to get it right and choose the best path forward. I consider this to be management incompetence at best, possibly something worse.
IMO
Left-e

Expand

Very good points made, but I do think you are using the benefit of hindsight to make them. I would have preferred to read your post last weekend!

The facts remain that there was no approved treatment for under 12 year olds for sr GVHD. And there still isn’t. Meanwhile, the FDA have stood quietly to one side as cells are supplied for the EUA. Mesoblast are to be commended for striving to fill this need.

If the FDA really wanted to see the second BLA succeed, on their terms, then the previous CRL should not have said “we recommend a further trial in adults and/or children” but instead “we require a further RCT trial in adults”. Then no one would be in any doubt as to what was expected of them.

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