Mesoblast will receive up to US$150 million in upfront and milestone payments prior to product launch, as well as further commercialisation milestone payments. These payments include commitments up to US$45 million within the first year comprising US$15 million on signing, US$20 million on receiving regulatory approval to begin a confirmatory Phase III trial in Europe, and US$10 million on certain clinical and manufacturing outcomes. Cumulative milestone payments could exceed US$1 billion depending on the final outcome of Phase III studies and patient adoption. Mesoblast will also receive tiered double-digit royalties on product sales.
The partnership has not changed at all, other than MSB and Gruenthal seemingly agreeing that it is mutually beneficial for the confirmatory trial to be performed in the states, with 20% recruitment in the EU. This satisfies EU regulatory requirements, hastens recruitment, and also adds validity should the FDA require another trial - which we will find out this quarter.
I don't pretend to know what "certain clinical and regulatory milestones" are, but options are: ethics approval, first dosing, completed recruitment, analysis, PE met, submission, approval. So a further $112.5 US million dispersed over those milestones, with a further US$1b as post-commercialisation milestones, which could include: production of x amount of product, sales of x amount of product, receipt of x amount of product, first-sale, x amount of time selling the product, etc.
So third party validation by big pharma that they want to stay on board, big tick. A reminder that this validates:
Efficacy (a p-value of less than 0.0001 at 12 months wasn't enough for you)
Safety (Already established by all clinical trials to date)
Patent Portfolio (This was a big one)
Market (ie. profit margins and demands are good)
Belief in scalability (Also a big one)
Belief in the team
Belief in the removal of regulatory barriers (in the EU)
Belief over competitors... but there are no competitors in the regenerative medicine space for CLBP currently. (Good indication selection, probably why they chose this path over OA)
I'm going to guess this confirmatory trial will have a PE of pain reduction at 12 months in patients with <5 years of pain. There was no difference in pain reduction at 12 months - 24 months, so I don't see the point in performing a 24-month study in light of that data.
I would have said that opiate reduction could have been a PE, but the EU doesn't really care about opiates compared to the US. So it would not be relevant as a sufficient endpoint for approval in the EU. Instead, it will likely just be a pre-specified primary secondary.
The trial would only include two conditions, placebo and Rex-L+HA. No point in performing a third condition when you've clearly demonstrated a superior formulation which is obviously going to be your commercial product.
Considering the p-value at 12 months, that it would have 2 conditions in patients with <5 years of pain, it looks like you would only need to recruit ~100-150 (50-75 each group) to meet the PE. Keep in mind there were n=194 participants in the recent trial that had less than 68 months of pain. In this group, they achieved a p-value of <0.0001 at 12 months. This means you can probably get away with fewer participants than that and still achieve statistical success.
It will be interesting, but regardless - definitely a shorter trial than the previous phase 3. And thanks to 80% of patients hailing from the good old US of A recruitment should be speedy, while 20% are recruited simultaneously within the EU. I hope they randomize this so it's 10% placebo and 10% treatment to not skew any data sets.
A reminder: the phase III started recruitment in March 2015, by May 2018 all 404 participants had been recruited. This included 194 participants with pain that had been present for less than 5 years. 194 patients over 38 months, averaging 5.11 patients a month. Now also consider ~80 participants, as 20% will be recruited simultaneously in the EU, and an attractive previous data set to present prospective participants. A confirmatory trial could complete recruitment within a year, if not a little over, and have the PE read-out after 12 months.
Can't wait to hear the content of that Type C meeting, but by then the SP could be double where it is anyway so
Gang gang
MSB Price at posting:
$1.99 Sentiment: Buy Disclosure: Held
(20min delay)