Ann: FDA Supports Accelerated Approval Pathway for Heart Failure, page-285

~~Fixed yucky formating~~

Hi All,

Thought I’d weigh in again.

I think it would be useful to think of each product and their potential labels, as this makes it more clear what is actually going on. With Remestemcel-L and Rexlemestrocel as distinct cell lines, they each have different indications that they have been tested in. MSB will be aiming to have all of these indications, and more, added to the label for the specific cell-line product in time.

		Remestemcel-L	Rexlemestrocel
1		·p-aGvHD ·a-aGvHD ·Covid ARDS ·All-Cause ARDS ·Ulcerative Colitis ·Crohn’s Disease	·CLBP ·CHF ·LVAD ·HLHS

• So the real journey for these products is what we manage to get ‘on-label’ and when.

• Super encouraging release from MSB regarding the support for AA in CHF+LVAD patients. The way they’ve said it, the AA would be considered for patients with both CHF andLVADs, and it would be labelled as such. A smaller subset of patients relative to inflammatory heart failure as a whole. I suspect that their trial design would fulfil the requirements of a confirmatory trial while still trying to tick the box for a full approval/addition to the label for inflammatory heart failure without the presence of an LVAD. That would be amazing for us as it would provide revenue in the short-term while we perform the confirmatory trial that also allows for the addition of inflammatory CHF to the label.

• Timeline-wise, MSB needs to design the trial and provide the relevant surrogate endpoints(they previously suggested LVEF at 12-months). They need to get the FDA's sign-off on the trial so that it satisfies their requirements as a confirmatory trial and is sufficient for AA. Then the usual stuff about contracting a CRO or using the THI, initiating sites, and starting enrollment. The FDA likes sponsors to have already initiated a trial prior to granting AA, but this is up to their discretion. Somewhere in that process, we will be able to sell to CHF/LVAD patients.

• This is interesting, because MSB does not have a sales force in place for cardiac indications, and clearly doesn’t want to go through this. Building a sales force is one of the most expensive investments a company can make. As MSB has already stated, they want to partner cardiac indications for Rexlemestrocel. It’s an incredibly powerful position to be in if you have a product that is already approved and commercial – risk is off for any partnering company. So a company with a cardiac salesforce can just come in and immediately start making money. Great negotiating position regarding upfront payments, milestones, and %royalties. If I were the partnering company, I would also be trying to get an equity stake in MSB and the first right of refusal for any future cardiac indications that were added to the label. If you look at almost all recent acquisitions in the pharma space, they occurred after the acquiring company already had an equity stake in the company. It’s a nice way for a potential acquirer to get a foot in the door, try before they buy, and only commit once everything has become transparent.

• Alongside this, an AA for HLHS would immediately add this to the label forRexlemestrocel, adding to negotiating power again as a new market is unlocked. I don’t see how HLHS could get approval based solely on the same trial as the CHF/LVAD confirmatory, so this will likely need to be an additional trial at some point as the efficacy in HLHS is mechanistically distinct from the benefits seen in CHF/LVAD. Then there’s the voucher that MSB wants to monetize forUS$100M, which would greatly help with MSB’s cash position in addition to any upfront cash payments from potential partners. Novo Nordisk is super cashed up at the moment from their anti-fat drug sales andthey have a cell therapy ‘Cellerator’, the Novo Nordisk Foundation Center for Stem Cell Medicine: "reNEW", and a development focus area of “Chronic Heart Failure”. These were formed just last year... near the end of it even... I wonder what stem cell efficacy data they saw in CHF that made them form these foundations

…People owe me a drink if I’m right…

Additionally, we have been told that the CLBP trial is ‘underway’ and has ‘commenced’. To me, that means screening and enrollment have started. This trial is 80% performed in the US, 20% in the EU to satisfy EMA requirements. This change in agreement led to an adjustment in the deal with Gruenthal. That said, there are still heaps of milestone payments that are outstanding from Gruenthal. I would have thought that initiation of the confirmatory phase 3 trial in CLBP would trigger a milestone payment – might be something to look forward to. Maybe it would be triggered upon site initiation within the EU. But I would have thought there would be some milestone payment built in for the phase 3 trial initiation, which would further help our cash position.

This is before we even get to the Remestemcel-L applications.

The meeting this month will hopefully have the FDA signal to MSB to resubmit the BLA for pGvHDand sign off on the aGvHD trial.

• Meeting = march,
• Minutes = April,
• Resubmission~May,
• Approval = by November (hopefully earlier but always estimate the worst case).

MSB does have a direct sales force in place for this indication and are super buddy buddy with the organization that does 80% of the procedures. So, this sales force can afford to be relatively tiny, as they already have heaps of exposure and awareness in this field.

In summary, we could have 3 commercial indications by the end of the year across 2 products… might even get to that self-sustaining commercialization people like to talk about.

Heaps of distance to go but looking doable ~potentially~ without further cash raises if any of the above cash sources come through.

Cheers,

Gang Gang