Hi Stockrock. One thing is for sure we were Snorter fodder...

First 597 Last

Share
Profile

Follow
Lopez

12,359 Posts.

1105

24/11/20

10:41

Post #: 49093356
Share

Originally posted by stockrock: ↑

Hi Heero

I’d like to know how much you think the upfront should have been and why?

industry practice is for the upfront to cover a portion or all of the development costs to date... MSB only started developing its ARDs program earlier this year... so there isn’t much there to to be reimbursed by Novartis.

the majority of the development for remestemcel-l has been for Ryoncil to date, and Novartis have left that for Mesoblast to continue on its own for now.

What is somewhat out of the norm is the sizeable pre-commercial milestones of US$505m, which will have a number of triggers ranging from granting of an EUA for COVID ARDs, starting the all-cause ARDs trial and other subsequent respiratory trials.

I see Novartis as hedging it’s bets, which as you say, is absolutely the smart thing to do. Mesoblast needs Novartis more than Novartis needs Mesoblast, but at the end of the day they still need each other ... and there is definitely a compromise that can be and has been reached which satisfies both parties criteria.

Novartis were clearly in a better position on the negotiation table, and their biggest risk would be that of a COVID ARDs trial failure .. and it appears they haven’t gone overboard with the upfront, so it’s reasonable to assume they wouldn’t lose too much sleep if they lost their $50m investment.

However if the trial is successful, then they have agreed to open their wallet/purse and reward MSB handsomely with milestones as well as funding a new trial for all-cause ARdS and in my view, the most important part of this collaboration, Novartis will fund all scale up capex for remeatemcel-l for COVID ARdS and all-cause ARDS. That hasn’t got a dollar figure attached to it- but it’s in my view going to be the biggest outlay from Novartis.

This also is a clear message that Mesoblast should focus its time and limited funds on developing the next gen tech, without fear of having to pay for any capex once successfully implemented. The trials to test these will also be funded by Novartis, so long as they relate to all-cause ARDS.

For a biotech at our stage, this could not have been set up any better to meet our needs. If Mesoblast pushed too hard for an upfront, that’s a nice feeling in the short term.. but that upfront cash would run out very quickly. What Mesoblast have secured is non-dilutive long term funding... with nice milestones along the way.

And who knows if Novartis was behind the Lassman case, but it’s clear now that they have a larger incentive to help Mesoblast get remestemcel to market for ARDs... it’s a win/win for Novartis and Mesoblast.

Expand

Hi Stockrock.
One thing is for sure we were Snorter fodder without Novartis.
We would have been crunched with that dispute announcement.
Good timing, difference between $5 and $2 something.

Aloha.

MSB Price at posting: $4.94 Sentiment: Buy Disclosure: Held
4 Upvote

0 Great analysis

Reply

Top Stories

WAF

West African Res jumps on claim mine safe under Burkina Faso's junta; HotCopper ponders Russia

TMK

TMK Energy kicks off drilling for new pilot wells in Mongolia's vastly underexplored Gobi

OCC

Orthocell wins first international approval for nerve repair product

DRO

Droneshield shares move up on $13.5M US govt contract

LMS

Litchfield boosts its copper, base and precious metals footprint in the NT with acquisitions

There are more pages in this discussion • 215 more messages in this thread...

First 597 Last

Add MSB (ASX) to my watchlist

(20min delay)
Last $1.46		Change -0.050(3.31%)		Mkt cap ! $1.681B

Open	High	Low	Value	Volume
$1.45	$1.50	$1.45	$6.763M	4.614M

Buyers (Bids)

No.	Vol.	Price($)
18	23383	$1.46

Sellers (Offers)

Price($)	Vol.	No.
$1.47	45241	10

View Market Depth

No.	Vol.	Price($)
15	24185	1.455
21	78799	1.450
10	98326	1.445
13	155520	1.440
8	138919	1.435

Price($)	Vol.	No.
1.460	32879	19
1.465	115558	12
1.470	42564	6
1.475	41097	7
1.480	108323	5

Last trade - 15.19pm 08/10/2024 (20 minute delay)

MSB (ASX) Chart

Hi Stockrock. One thing is for sure we were Snorter fodder...

West African Res jumps on claim mine safe under Burkina Faso's junta; HotCopper ponders Russia

TMK Energy kicks off drilling for new pilot wells in Mongolia's vastly underexplored Gobi

Orthocell wins first international approval for nerve repair product

Droneshield shares move up on $13.5M US govt contract

Litchfield boosts its copper, base and precious metals footprint in the NT with acquisitions

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

Hi Stockrock. One thing is for sure we were Snorter fodder...

Top Stories

West African Res jumps on claim mine safe under Burkina Faso's junta; HotCopper ponders Russia

TMK Energy kicks off drilling for new pilot wells in Mongolia's vastly underexplored Gobi

Orthocell wins first international approval for nerve repair product

Droneshield shares move up on $13.5M US govt contract

Litchfield boosts its copper, base and precious metals footprint in the NT with acquisitions

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News