Victor Chang Institute Stem Cell Story On Channel 7 News last night - I expect an announcement on a "stem cell" trial soon
Last night there was a story involving Professor Robert Graham of the Victor Chang Cardiac Research Institute. The reporter, Samantha Brett, stated he was starting a study "within the next month" on using stem cells to battle the most deadly effects of the lung diseases associated with Corona Virus.
The broadcast said "but now more than 4 million Australians with heart problems are being warned to be extra vigilant as the disease could hit them extra hard". They interviewed a pretty fit looking bloke who had heart transplant recipient a year ago, "he's one of the 4.2 million Australians susceptible of getting a severe case of Corona virus if exposed to the illness". He's upset by "a lot of social media posts and people that just dismiss it as something that is only going to attack the old or those with weak immune systems" (he looks at least 20 years younger than me!).
The report noted, "Today (Saturday 14 March, π Day) doctors have issued a fresh warning for those most vulnerable".
Prof Robert Graham then said "it puts a big strain on the heart, so if you're already starting with heart failure you're in trouble and if you're immune-suppressed of course you can't fight the infection as well as somebody who's got a normal immune system."
The immune system responds to Corona Virus by unleashing chemicals which can cause fluid to build up in the lungs. Prof Graham says "that makes it even harder for the heart to work and even harder for the lungs to get oxygen across which is what you need."
The reporter says "Professor Graham and his team are now looking at potentially using stem cells to treat those with the virus who are suffering from severe respiratory distress."
Prof Graham then says "if you get a lot of cases of this, as I said, you've got a 50% mortality rate, and that's really tragic."
Reporter: "He's hoping to have the trial underway in the next month."
Prof Graham says, "and that's a lot quicker than a vaccine that's going to take at least 12-18 months to be available, and that's optimistic."
The heart transplant recipient says, "Knowing that research like that is in the hands of a place like this (the Victor Chang Cardiac Research Institute) fills me with so much confidence and security".
Links between Prof Robert Graham and Mesoblast
I have found joint papers presented by Graham RM, and Itescu S going back as far as 2006, just with a cursory search and presented at the World Congress of Cardiology in Barcelon in Spain in Sep 2006:
Graham RM; Kovacic JC; Itescu S, 2006, 'Recombinant human granulocyte-colony stimulating factor (G-CSF) and intracoronary CD133 cell infusion in 'no-option' patients with end stage chronic refractory ischemic heart disease', in EUROPEAN HEART JOURNAL, OXFORD UNIV PRESS, Barcelona, SPAIN, pp. 278 - 279, presented at 28th Congress of the European-Society-of-Cardiology/World Congress of Cardiology, Barcelona, SPAIN, 02 September 2006 - 06 September
And it's not just a one-off: Kovacic JC; Macdonald PS; Feneley MP; Muller DW; Ma DD; Tao H; Freund J; Milliken ST; Dodds AJ; Moore JJ; Itescu S; Graham RM, 2007, 'The use of granulocyte-colony stimulating factor in angina patients to stimulate neovascularization: the GAIN I study', in Circulation, Lippincott Williams & Wilkins, Philadelphia, PA, USA, pp. 2669 - 2670, presented at 80th Annual Scientific Session of the American-Heart-Association, Orlando, Florida, USA, 04 November 2007 - 07 November 2007
Everyone I have met at global stem cell conferences knows Mesoblast, and many named Prof Itescu by name when I've mentioned the name Mesoblast. So, the fact that Prof Graham and Prof Itescu have jointly written papers on heart disease to be presented at global conferences and they are both located in Australia (where everyone in the stem cell industry knows Itescu S.) means it would be surprising if MSB were not aware of this imminent study after it has been on Channel 7 News!
MSB have strongly stated their patent protection over MSC cells, composition of matter, their manufacture and their use - including diseases ARDS and COPD, which are relevant here. So, Prof Graham may well be talking to MSB about directly using their allogeneic cells, in which case I would expect MSB to make an announcement soon, or he may be using research cells, which may not require an announcement - but either way, I expect more announcements in the near term. Once the studies move beyond the research phase, Mesoblast have the patents over resulting MSC cells.
Government response
Wouldn't it be better for the Government to back this study to bolster vulnerable people's confidence that they may survive this pandemic, rather than simply tell us the economy will recover and be better than ever after the crisis is over?
Even better, why don't they allow the "stem cells" to be used now, on an emergency basis, for dying patients with no other hope?? Once our health system is overwhelmed and there are no ICU beds and no ventilators available for new cases, like in northern Italy already, will the government still do nothing???
Italy, France and Spain were slow responding and they are now all at crisis levels. They are closing down their economies.
Spain's Prime Minister Pedro Sanchez confirmed a 15-day nationwide lockdown on Saturday as part of state of emergency measures to control the spread of the killer virus. He said the coronavirus crisis requires "extraordinary decisions". All shops except pharmacies and store selling basic necessities will be forced to close. Mr Sanchez has said armed forces will be used in the fight against COVID-19.
Spain's news comes hours after France went into lockdown.
Restaurants, some shops, cinemas and cafés will shut for the foreseeable future. The French Prime Minister has also ordered people to work from home and only go out to buy supplies, take light exercise and vote in the election. Public transport will remain open but PM M. Philippe encouraged his citizens to limit their use.
Jerome Salomon, the head of the French public health authority, said there had been a rapid increase in serious cases, including 300 people in intensive care, half of whom were below 60 years of age. The French prime minister last night labelled coronavirus France's "biggest health crisis in a century". More than 90 people have died of the virus there so far and a further 4,500 are infected. To me, I'm surprised that 300 are in intensive care if only 4,500 are infected.
Frankly, there aren't enough cells, a big pharma partnership is required
These numbers in French intensive care are huge - that is 6.7% of those infected, if the numbers are correct. It is more likely that many more are infected, so the percentage in ICU is smaller. Let's hope so, because if 60% of Australians are eventually infected, and 6.7% of those are in ICU, that's 4% of our population - or over 1 million people. Now, I know they won't all be infected at once, and I think the numbers in ICU will be much less than 6.7% of all those infected, however we are talking numbers that will completely overwhelm our health care system.
If the death rate from the current cases is 3%, that means there are many more attending ICU and if the mortality of ARDS is 50%, then the percentage of infections in ICU could indeed be over 6% - however, there are still doubts that the true number of infections is correct, and that only the most obvious cases are being tested for, so again, the death rate may be overestimated.
Notwithstanding the doubt over the statistic, people on the front line of the health system in Australia (my friends - so anecdotal) are already saying it is chaos.
Australian Government potential response
Scott Morrison is making a speech later today - let's hope he has a health response rather than the current economic and travel restriction response.
Money and research resources need to be dedicated NOW to avoid a disaster of massive numbers of people without the ability to access ICU beds.
Vaccines will take too long. The immediate need is to treat the deadly ARDS lung disease with emergency use of stem cells for people who are otherwise going to die.
Our responses so far have been too relaxed and too slow. Governments have fallen into the time-tested groove of reassuring the nation and hoping the crisis will quickly pass. However, the escalation in Italy, France and Spain tell us that it has hardly started in Australia and we could well need a massive health care response, not just economic aid.
It isn't even 'flu season in Australia yet. How bad will this get in the winter months? Even if we close the country for two weeks and bring the current cases under control, what stops the whole thing taking off again after that?
Will we be able to even access MSB's cells in our hospitals? If we can access them, how will they be rationed within Australia? How will the countries who are currently producing the cells ration them internationally?
There's no way there is enough production to satisfy the potential demand if this really takes off. In fact, lung complications of normal seasonal 'flu kills 61,000 Americans in a bad year (and that is an estimate - the high side of the confidence interval is nearly 100,000).
So, even if Corona Virus were brought under control, there is already very high potential demand from the normal seasonal 'flu.
The MSB Lonza facility has not yet been upgraded and it isn't in Australia. Will overseas governments commandeer the cells produced in a declared national emergency in their countries? Our government has been talking about directing gas companies to reserve gas for potential shortages in Australia - will Singapore do the same to Lonza?
It will require a partnership with a big pharma to churn out the volume required to treat 6.7% of populations in countries who can afford to buy the cells.
If big pharma produce in the US, will Australia be able to get cells?
Should our government be stockpiling cells now? I think there's enough evidence that they work that a government in risk management mode should put in an order for cells and try to get ahead of the game - particularly when they are one of the 4 governments already talking to MSB about this crisis.
What's next?
The response from international governments in the past few days has been truly extraordinary - from the US closing itself off to European citizens to the internal closures of Italy, France and Spain.
A health response is desperately required and MSB is already talking to governments about how MSCs have already been successful in small ARDS and COPD studies.
Health systems are already overwhelmed and more large scale deaths are inevitable.
The 7 News story last night shows that influential Australian health professionals are already talking about studying the benefits of stem cells for the 4.2m vulnerable potential patients "in the next month".
Successful trials of stem cells are highly likely to lead to a partnership between MSB and a major pharma - probably involving a big upfront payment and royalties of around 20% on potential US sales of up to $US30 billion (very, very, very rough number based on 1m US seriously ill - including seasonal 'flu ARDS patients - and saving 3 days of intensive care at $US10,000 per day).
If there are US sales of $US30 billion - that could be royalties of $US6 billion to MSB, and a net profit of $US4.677 billion, after $US80m pa cash burn and after US tax at 21% (ignoring the benefit of existing tax losses). Put that on a P/E of 25 and you have $US116.9 billion market cap (or $A189 billion) - that would be a share price of $A352. That is obviously ridiculous, so then you start discounting to say that others will try to compete and MSB might only get a 10% market share, etc etc - but even then the numbers are huge from this potential product.
Would the US health system pay this much for a product? Well they already are - and more - this is just based on the current cost of high care ICU and assumes using stem cells cuts it by 3 days. In the event that people are cured after 2 days instead of as much as 10 days in ICU before death, then the health system has potentially saved up to $US80,000 for those patients, and they avoid a "negative primary outcome".
Bad cases of ARDS can involve up to 10 days in ICU on a ventilator, paralysed and in a coma, then death. Wouldn't it be much better to cure people from ARDS in as little as 2 days as happened with one of the Chinese patients?
All of this is in my opionion. None of it is a recommendation to buy MSB. Numbers are very uncertain at this stage and should not be relied on, but they potentially dwarf the numbers being talked for our other "blockbuster" indications of heart and back pain.
I expect Scott Morrison to take this seriously at some point, and he has a wonderful opportunity to actually take the lead on an issue - he has MSB in his own backyard and could choose to get ahead of the curve. We'll see.
Either way, I expect the Channel 7 News report to generate some sort of announcement in the near term.
MSB Price at posting:
$1.62 Sentiment: Buy Disclosure: Held
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