thanks for the kind words all, but you are all just as important in this forum in the feedback, and constructive feedback given which helps motivate me to fine-tune my understanding of Mesoblast, which has been built up over... gee I think 7 years now. And for posters like me, I actually encourage constructive feedback, so long as it is constructive and not low content, unfounded dribble which comes from a lot of posters I thankfully have had the chance to put on ignore over the years. So all in all, my HC feed for MSB is pretty clean.. with the occasional clean-up here or there needed.
@Medicalcentral your post reminded me of a former self, and I must commend you for having the courage to voice your concerns. I think it is a valid one, and there are actually many potential problems that a Company like Mesoblast can face.. moreso than your average biotech, not only are Mesoblast pioneering a totally new field in medicine, we are an 'outsider' i.e. AU HQ, and with a relatively small budget. But despite all the pitfalls Mesoblast could have fell into and never could have recovered from... against the odds, here we are with three of our lead programs generating data that the FDA is considering for some sort of approval for CHF (single study full approval), SR-aGVHD (full approval), COVID-ARDS (EUA), with our other lead blockbuster indications CLBP successfully moving to a second phase 3 trial after the FDA confirmed that the first trial generated acceptable data to support FDA approval.
Mesoblast is in an industry that is slow moving with a heavily skewed need for front loaded capital... while not a direct comparison, when I first started invested.. I was investing in mining stocks, which may be why I took to biotechs like a duck to water... because there is a similarity in how mining companies survey land (conduct pre-clinical studies), start drilling exploratory cores (phase 1 trials), then after finding a nice zone conduct more targeted drilling (phase 2 trial) and then once you get some positive cores back in a specific target you get all the rigs you can find and go all out hoping that you didn't just find a pocket of resources/gas/oil.. but rather the motherload (phase 3 trial). But i dare say, biotechs probably take twice as long as miners do to get through all those phases... and the number of biotechs that fail / run out of cash is probably similar to how many mining companies fail to find that elusive motherload... but the ones that do make it, most instos don't hear about them until they've made it and take for granted all the cash that was burnt for many years without a return... and that will be the case for biotechs too, once they make it.. they make it big, and the focus on the early struggles are replaced by a focus on mind boggling sales, future growth targets, new indications, profits and dividends.
So similar to mining companies, the risks are stacked against companies that haven't quite made it yet. But IMO the complexity with Mesoblast is multi-layered, with an investor needing to have a solid understanding of not only the science / clinical data across multiple indications, but also the corporate/industry landscape, corporate finance and the regulatory landscape.... add onto that the noise and confusion brought upon by financial markets .. which includes shorting activity. So it is forums such as this where I find a lot of value in sharing my thoughts, which are written with a positive bias being a holder, but in doing I always try to back it up with reasoning, supports and facts. As much as I try balance my posts, which at times will be responding to a particular risk, and why i have come to terms with it / accepted that risk, there are posters who post valid concerns which ultimately have the ultimate underlying theme of... funding and/or not knowing what the FDA is going to do. So with that in mind, it should be obvious that nobody other than the FDA will know what will happen with the FDA.. but we have disclosures, past practice, regulatory guides and clinical data genereted by Mesoblast to make an educated guess on the likely outcome of FDA decisions.
The fact we are at the pointy end needing to focus on what the FDA will do in terms of BLAs/ approvals... is an achievement in itself. I always remind myself that Mesoblast could have run out of cash at any time in the past 7 years I was invested.. but here they are, and all that time waiting has culminated to where we are now and what is going to transpire in the coming days/weeks. The phase 3 trials have read out, and now the FDA is making its decisions... with CLBP already obtaining a favourable outcome... and SR-aGVHD, CHF, and COVID ARDS to come. All in the space of days/weeks.
I mentioned in an earlier post that I feel the market is focusing on what may be a big red herring, in Novartis termining its collaboration for all cause ARDS, which includes COVID19 ARDS. Yes, there is US$50m that we won't receive in the short term.. but Mesoblast were not relying on that in the short term to continue their operations.. and yes the non-COVID market which never existed before Novartis arrived, is now on the backburner.. but IMO not entirely lost. But what I also feel has happened is that Novartis' departure has reignited doubt over Mesoblast's technology and overall ability to get products to market... and especially the outcome of the upcoming OTAT meeting, which holds the key to approval pathways for SR-aGVHD and COVID-ARDS.
I say this because that was my first reaction when I heard the news.. and so I wouldn't be surprised if the market in general felt the same. Again this is all my opinion. But I think I've demonstrated why I believe the CLBP and CHF programs have in fact been accepted by the FDA... the initial reaction by markets on the 'failed' trials have not been reversed, when in fact I believe they probably should and will (just on concrete evidence, rather than expectation.. which is good for investors, as its much better to buy/accumulate when the market isn't pricing in the upside). So that will sort itself out in 2022, which I am highly confident it will.. so that gives me a lot of confidence that Mesoblast will continue to not only exist in 2022 and beyond.. but thrive. So I don't think Novartis' action should taint the value or increase the risk of the rest of Mesoblast's portfolio.. but what it has done, is distract the market into not correctly valuing these assets.
But speficially on OTAT.. I repeat, I don't know what the FDA/OTAT is going to conclude this around... so you may well be right, and nobody can assure us that it will be the positive outcome we all want.. but here are some reasons as to why I think it should be positive:
1. On 30th April 2021, Mesoblast informed the market that the review team will not accept accelerated or full approval of its existing BLA for Ryoncil. Which included this statement
"However, there was consensus with the review team on the proposed optimization of potency assays and on use of biomarkets to demosntrate the product's bioactivity in-vivo".
2. On 30 August 2021, Mesoblast informed the market that it had spend US$9.5m on development costs which included potency assays & support costs. We were also told that CBER said
"the potency assays currently in development appeared to be reasonable based on in vitro results provided in the briefing document, the in vitro activity of the product appears to be relatively well established, though the relationship between in vitro activity and the product's actual mechanism of action remains theoretical".
3. On 4 October 2021, Silviu had an interview with the Wall Street Journal -->
Wall St Interview 4 Oct
In it he said..
"
And we have established new assays that I think continue to even further underline that we understand the mechanism of action and that go to the heart of the mechanism that the cells go through in order to improve the outcomes in these steroid-refractory GVHD patients.
And so we think that we will have alignment with the FDA because the potency assays now are very much in line with the disease process, how we think the cells turn off the disease process. And we think that it’ll allow us to be very confident, and for the agency to be confident, that as the product is hopefully in the marketplace, it will demonstrate that every lot behaves exactly the same way as the lot before.
That’s really what the FDA wants. They want to see that we’ve got a handle on the mechanism, that we have a handle on the production, that there’s no differences in production from every product that goes out the door.”
4. At the AGM, on 29th November 2021.. Silviu said he'll update the market after the minutes were received from the FDA. So that means 30 days after the meeting takes place, which if it took place on the 30th November.. which we all thought must be the case (as he said it was taking place in November)... then we may get something on New Year's Eve... but if not we'll get something early 2022. The timing isn't important to me anyway.. it's on its way.
So for OTAT.. here we have a chain on events, which if you look at face value without any distractions like Novartis... look to me, very promising. So Mesoblast received consensus back in April 21 from the review team, which included OTAT, on the path forward in terms of what OTAT needed from the potency assays and how it needed to demonstrate the bioactivity in-vivo.
Then the FDA/CBER a few months later said what Mesoblast produced appeared reasonable in vitro, and the product appears to be relatively well established. The comment on the product's MOA being theoretical is expected and entirely acceptable, it can remain theoretical and still receive approval. But at this stage, it appeared Mesoblast were still working on the in-vivo data... but they were 'on the right track'.
And then finally, we have Silviu again a few months later.. having completed the in-vivo work... confirming it is in hand, and successful. So the only thing to do is to show that data to OTAT, and given the 'steer/guidance' given by the FDA to date... from April 2021 until now... your concern that we may get a 'you did ok, you are on the right track.. but we need more.. go off and do some more work and come back'... well that discussion would appear to have happened throughout the past year.. and the FDA/CBER and OTAT had opportunities to tell Mesoblast if they were on track or not.. but instead we've been green lighted all the way through.
Something that really makes me confident on OTAT is this... remember what happened at the ODAC? The FDA/CBER/OTAT ripped into Mesoblast and tore the company a new you know what... the didn't hold back and the feedback was so negative (but constructive) that the market sold the stock down by almost 40% from when the papers were released and leading up to the actual meeting on 13 August 2020.
But like any good company.. constructive feedback is actually TREASURE. It's never nice getting negative feedback from anyone.. but if it is constructive, it is a treasure trove of learnings that you can take forward and better your own processes and knowledge. So the more negative and constructive that feedback, the better it is for Mesoblast leading up to this OTAT meeting. I'd encourage you to read through those documents again and see how direct they were... painful to read at first, but in hindsight... it's all treasure that Mesoblast have been gifted to progress to where we are today.
Goodluck to you and all
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(20min delay)