If the trading halt is not related to the COVID ARDS 60% interim read-out... and we don't get an update this week, it will be highly suspicious as to what the DSMB are doing in the background with this final interim analysis.
But I imagine the situation could have unfolded like this ...
MSB get the email/phone-call from the DSMB yesterday during ASX trading hours and immediately informed the ASX to pause trading (this is the quickest way to halt trading), with a follow-up trading announcement following shortly after all the internal sign-offs were obtained for a trading halt (wording to be used etc).
This would fit in with what I would expect MSB to have done if an early stop was recommended... they need time to figure out what the next steps are and will need to discuss it with the NIH (sponsor), Novartis (partner) and the FDA (regulator). In fact, I believe if the halt turns into a suspension, this will line-up perfectly with this scenario with the Novartis transaction able to formally go ahead on Monday. Given the gravity of the situation, all parties would want to be involved in the decision to stop/continue the trial, and this couldn't involve Novartis formally until the transaction completes.
But again, if the above hasn't happened.. and there is no COVID-ARDS update, we have to ask ourselves... why are they taking so long?
Another reason for the halt that I didn't mention yesterday which is worth highlighting (as others have also hinted to as a possibility), is that Tasly have decided to do something with their CHF partnership in China. The timing of the halt would make sense, given China is a few hours behind.. and MSB may have scheduled a meeting with them after the CHF results were announced and at that meeting Tasly may have indicated they want to terminate the partnership.
If they wanted to terminate the partnership, that wouldn't really be that material as the Chinese market has no active trial and no strings attached as far as I'm concerned.. but it could warrant a trading halt. However it would be unusual for them to terminate an agreement without going through the data with Mesoblast in detail, and we know they haven't really done the analysis yet... and the 60% improvement in MACE and mortality would in my view definitely warrant further discussion/analysis... so a termination wouldn't make sense, unless Tasly were only interested in a clear cut trial success to continue their partnership - which could be the case.
If Tasly wanted to expand the partnership, I don't think it would require a trading halt.
In terms of a partnership for CHF or CLBP, some have expressed that this wouldn't happen so quickly after trial results have been released. However there is precedent on how MSB is likely to proceed if they were approach/agreed to go down this path. Mesoblast have in the past signed equity purchase agreements / right for first refusal (Celgene US$45m for 6 months, Mallinckrodt for 9 months) with potential partners to exclusively negotiate a partnership arrangement for a set period of time. If this were the case, I'd expect it to be announced tomorrow.
If it were just a clinical trial outcome like the CLBP, it would have been announced today before market open I believe. So I stand by my sense that this is not the reason for the trading halt.
The Federal Trade Commission or the US Department of Justice AntiTrust Division may also have issued a second request on the Novartis Agreement, which means the deal can't close yet (Hard-Scott-Rodino Act)... but I'm struggling to see why this would be the case as there isn't even a market yet for remestemcel-l... so anti-competitive issues shouldn't really come into play. Remote, but worth considering as a possibility.
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