Listen Doc, the FDA hardly covered themselves with glory. From the transcripts of the ODAC meeting it was clearly stated that Mesoblast met with them to design a single label Phase 3 clinical trail with a 28 day clinical endpoint in 2014. A member of their own expert panel also took them to task for lacking consistency in their regulatory approach, with Ruxolitinib data approved on the same basis . I have the recording so don’t go there !
The FDA even had the cheek to question the 43% null hypothesis rate retrospectively calculated by a MAGIC propensity scored dataset at baseline, used to justify our use of a 45% rate. To show how ridiculous their presentation was they brought up the null hypothesis from a TREATMENT NAIVE trial (as opposed to steroid refractory one) If you don’t understand the difference I can explain . By the way, do you realise that D Przepioka was actually on the FDA team. She should have known better having written a paper on the subject …many studies have shown up to a 14% error rate in grading patients using subjective Glucksberg or CIMBTR guidelines for C/D disease stratification. The Magic Biomarker score incorporates soluble ST2, and has been validated in paediatric patients to barely a 1% error rate in under 10s. MBS is a form of liquid biopsy able to measure GI proteins released from tissue damage caused by GVHD.
https://pubmed.ncbi.nlm.nih.gov/7581076/
Steven Bauer, who previously headed up CBER had spent years lecturing on the need for critical quality attributes to ensure consistency, purity and reproducibility. This CRL may have been justified in at least one respect . The potency assays provided by Mesoblast needed more work to link the in vitro with in vivo outcomes …but let’s get this clear … I am not aware of any regenerative medicine which has achieved a data set which correlates in vitro with invivo in this way. Amazingly, using a larger dataset which incorporated outcomes from the 241? patients from the EAP, Mesoblast has been able to show through its IL2 potency data, the link required…an approach which the Office of Therapeutic Products has already deemed “reasonable” (box ticked).Then we had the fatuous evidence from Sally Temple on cell morphology…who was concerned about cell degradation at passage 7 …when Mesoblast does not manufacture using 7 passages !
On the day of the ODAC Committee Meeting 13th August 2020 the real experts appointed by the FDA examined the clinical data and came to the conclusion that a further RCT was unlikely to be able to recruit medical practioners willing to subject babies to taking a placebo as a standard of care. They understood the limitations of some of the data , but they were obviously impressed by the safety and efficacy profile…and wanted the therapy to be made available for an unmet need. The FDA should have found an appropriate pathway to allow this to happen but they appear to have been caught up in their own vanity projects. The emergence of four year mortality data, which is first and best in class leaves the FDA with hypothetical objections not backed up by real world data. Patient reported outcomes are becoming very important .
Since the CRL was received, Mesoblast has bent over backwards to deal with FDA concerns. I suspect they will have documented about 500 odd proteins on a single cell basis which then be mapped to identify changes in protein expression, before and after manufacturing etc.,… Whilst these delays are extremely frustrating, Mesoblast should benefit from the huge amounts of data that has been generated. I have no doubt that when they want to upgrade to 3D animal free sera or change confluence rates they will be able to validate the potency changes by reference to the control data in the potency assay .I have always felt that the penny has not quite dropped with the FDA regarding MOA. If MSCS are flushed out from the body within days how do they explain durability of response ? How do they allow for the effects of phagocytosis by M1 macrophages . Talking of which, how embarrassed must the FDA be..now that the difference between Ruxolitinib and Best available therapy for median response was only 3-4 months ! In Grade C/D patients Rux showed only 41% recovery against our 69% response rate….and now we know that Mesoblast now trounces them on Overall Survival outcomes as well.
…but the icing on the cake is what the 4 year registry data from the CIMBTR will show as regards tutoring relapse rates , chronic GVHD etc . We already know the mortality rate from the end of years 2 to 4 in GVHD001 changes by only 2 per cent ….suggesting complete remission for many is possible using Remestemcel ? Is it a surprise that Bell Potter are now suggesting an adult trial for acute and also floating the idea of an adult trial in chronic sr gvhd. Maybe you haven’t considered the market opportunity here. I believe there are 6000? patients a year receiving treatment for chronic GVHD…and require treatment often for up to 6 years . Both Rux and Rezurock have annual cost in excess of $200k for just a years treatment !
One of your most unfortunate possible miscalculations relates to the likely cost of Ryoncil posts approval in a paediatric setting. Kymriah is a modified autologous T cell therapy for cancer patients costing about $15000 per dose to manufacture and was originally priced around $475k with significant cost of administration on top. We might be talking to insurers soon, about a total average price for patients under 18 of close to $600k for Remestemcel which has 50% lower mortality rates than Rux in severe disease category. Excluding Grade 2 skin only, I estimate an addressable market of 300 steroid refractory paediatric patients per annum in the US…Assuming we initially capture 60% market share as the only approved therapy in children on a stepped rollout , we might reach a run rate worldwide sales of around $200m within 24 months . Post BLA approval in adult for the severe sr aGVHD ( C/D population) sales would likely rise in excess of $500m…which would then be topped up by label extensions .
I leave you with a graph illustrating the pharcoeconomic cost of a child dying from sr a GVHD as shown by research commissioned in 2019 ,published and presented by Mesoblast a year later . Note the massive extra $1.8m cost to commercial insurers of dealing with a terminally ill child with this condition ..bless their souls. … . I fully expect the bears to try smack the share price post a successful outcome of the BLA application …but they will need to be very quick to do so. I believe that institutions are just looking for some certainty in the form of FDA approval before piling in. Assuming sales of $300m and annual running costs of $80m .. in my opinion , a first and best in class therapy for refractory cancer patients should be closer to a US $3bn-$5bn market cap within 12 months …but we still have to climb the wall of worry !
Please remember sr aGVHD is the minnow indication in the pack..post approval, analysts are likely to start providing percentage COS models for a number of other indications. CLBP has the potential to be valued at several billion on its own post a success . A salivating prospect.
Please do not rely on the accuracy of any options or facts expressed in the above post when making an investment decision . DYOR
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