Ann: Update on Novartis Agreement, page-728

I think if we try look at it from Novartis' viewpoint.. it might give us a bit more insight. While I was hoping that Novartis would want to be invovled ina treatment that could treat COVID ARDs patients... at the end of the day, it comes down to dollars and cents... if we take a step back, Novartis' original target market was for ARDS more broadly.

If we look at ARDS and the patient population that suffers most and most prone to death, it's the greater than 65 population. I think it's more than half the patients who are likely to end up in ICU for ARDS.

And so when Mesoblast's data was strong for <65's ... more than half the market had a big question mark over it.

It may explain why Mesoblast insisted on different dosing regiments on the >65 patient population in the upcoming trial... it may have been a possible attempt to keep Novartis interested enough to sign up.

It also lines up with Silviu's insistance that Mesoblast's focus target was for COVID ARDs.. and it was Novartis who wanted to focus more on non-COVID ARDs... coupled with the weak data for >65's, may have been enough to sway them to pull the pin after cruncing the numbers.

Keeping in mind that the output from Novartis if they signed up to this collaboration would not be inconsequential in terms of building out production facilities for COVID ARDs... but if it turned out that all that investment only served less than half the non-COVID ARDs market.. the risk weighted cost/benefit may not have made sense for them to proceed.

The timing is curious of the termination is probably the only curious thing about it all.. why take this long, and why now after the OTAT meeting has taken place (or should have taken place). If the OTAT meeting is a success, then we can put this all to bed and the likely reason for Novartis to terminate may simply lie in the financials involved in proceeding with the collaboration stacked up against the potential market size and ultimately profit.