Mesoblast (MESO)Last but not least we have Mesoblast, which develops therapeutics and medical devices based on its mesenchymal precursor stem cell platform. After an Oncologic Drugs Advisory Committee (ODAC) voted in favor of its therapy, several of the Street’s pros have high hopes for this healthcare company ahead of the September 30 PDUFA date.On August 13, the FDA held an AdCom meeting to discuss MESO’s biologics license application (BLA) filing for Ryoncil (remestemcel-L), which was designed as a treatment for children with steroid-refractory acute graft versus host disease (SR-aGVHD). Acute GVHD occurs in roughly half of the 30,000 patients who undergo allogeneic bone marrow transplant (BMT).At the meeting, the committee members voted 9-to-1 in support of the drug’s efficacy in a difficult indication. 5-star analyst Jason McCarthy, of Maxim Group, told clients, “This was in contrast to the briefing documents ahead of the Adcom on August 11, which stated concerns related to efficacy that resulted in MESO shares plummeting 35% at that time. Our view is that it was a premature ‘knee-jerk’ reaction to an Adcom that didn’t even happen yet. As such, Ryoncil is very much still on track and the PDUFA is next.”Looking more closely at the data, two randomized Phase 3 trials in GvHD, study 265 and study 280, were conducted by Osiris Therapeutics, which previously owned the candidate. Both studies missed their primary endpoints compared to the placebo, but study 265 “was conducted in newly-treated GvHD patients (not steroid refractory), and therefore is not entirely relevant to Ryoncil’s BLA,” according to McCarthy. As for study 280, it missed its durable complete response endpoint in the target population, but overall response at day 28 was 64% for Ryoncil and 36% for placebo.“Ultimately, these studies were not in the target population for the current BLA, and in patients that fit the criteria, a positive effect was observed,” McCarthy commented. Additionally, he points out that an aggregated dataset demonstrated a consistent response across three separate trials including study 280.Speaking to the unmet needs in this indication, in patients with severe disease, there is currently a 90% mortality rate and there are no approved therapies for pediatric steroid-refractory patients. Jakafi has been approved for patients aged 12 and older, but
McCarthy believes Ryoncil compares favorably. He said, “Considering the positive safety profile of Ryoncil compared to other therapies and the unmet need in the indication, we continue to see a high likelihood of approval.”
In line with his optimistic approach, McCarthy reiterated a Buy rating and $22 price target. This target conveys his confidence in MESO’s ability to climb 22% higher in the next year. (To watch McCarthy’s track record, click here)Other analysts don’t beg to differ. 5 Buys and no Holds or Sells add up to a Strong Buy consensus rating. At $21.60, the average price target implies 22% upside potential. (See Mesoblast stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
MSB Price at posting:
$4.91 Sentiment: Buy Disclosure: Held
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