Some posters here still don't get it, imo.
Mesoblast was founded 16 years ago. Since then private investors have pumped in a little over $1B in capital, of which the company has burnt some $600M. What do investors have to show for it?
Well, management took that $1B and converted it into a pipeline of phase 2 and 3 products that offer treatment for a wide variety of important indications. Read the list from the website: Acute Graft-vs-Host Disease in children and adults, Chronic GvHD, Acute Respiratory Distress Syndrome, Hypoxic Ischemic Encephalopathy (the cause of spastic cerebral palsy), Epidermolysis Bullosa, Crohn's disease, advanced Heart Failure, and chronic Low Back Pain. They've established a patent estate with over 1000 patents, some foundational in the industry. They've established important strategic partnerships. They've run trials and collected data. They've licensed two approved products that are already generating recurring royalties. Mr. Market says that package of assets is currently worth $1.8B, a nice result, especially when you compare the ROI numbers of the two nearest competitors in the industry.
Now here comes Novartis with deep pockets. They've entered into a partnership, ie a contractual obligation, to potentially pay out nearly $1.3B. What are they getting for their investment? A whole company with a robust pipeline? No, they're getting development obligations, cost sharing and a profit split on primarily one of the above indications. ARDS.
ARDS may be a more important indication than some seem to realize. Unlike CHF and LBP there's no approved medical Rx. Vaccines and anti-virals are front end of the therapy cascade and don't work so well in older, weaker patients, not to mention anti-vaxers. Rem-L, now shouldered by Novartis, is back end, angling to become THE medicine of last resort in the ICU. That will represent a major medical breakthrough of Nobel Prize calibre. C-19 ARDS trial results are at hand, but that's tip of the iceberg. The potential market is huge and will continue after vaccines are introduced and will grow as the population ages. Off label use will begin as additional trials play out. Novartis no doubt sees Anti-Fibrotic Lung Disease, anti-Long Hauler Syndrome, anti- MIC in Children among others. We can be sure they didn't make this commitment without a thorough kicking of the tires, probably including their own animal tests and detailed manufacturing/regulatory/patent/market analyses. And their CAR-T success shows they know how to do it. Huge de-risking of the investment as someone on HC pointed out. IMO, this partnership makes ALL the other pipeline assets more valuable.
We've just had an AGM, CEO fielding multiple questions, PR's galore and we hear “The silence is deafening” and “small partnership”.... really?? Is that you CavScout?
By the way, there's no need to say “severe” ARDS unless you're trying to downplay it from “critical” ARDS. Take out the “RD” if you will and substitute SD. Acute“Suffocating to Death” Syndrome, or Acute “Drowning in your Own Fluids” Syndrome. Additional descriptors like “severe” become redundant and feeble.
Exciting times. glta
(20min delay)