BP update (Tanu) .. GLTAH

Goodevening holders,

What a fewdays it has been.. talk about HIGH STAKES ( for shorters & various interestgroups)

But I sayto the Antagonists .. WATCH OUT.

Following is a briefing note from Tanu Jain.

In honor ofEccool2 ; OP; Left-Yahoo ; The Yankee ; Vinn ; ALL posters ( including ourPatron FullmoonFever), I have pleasure in sharing Bell Potters note.

Jain bringsmuch needed perspective to the Shenanigans over the last 48 Hrs.

MY family –we are staying PUT , ZERO movement … NADA !

This is my opinion only on the back of reading 127 pageMESO submission to ODAC and wonderfully put into perspective by Tanu.

[my final comment relates to MDJoanne Kurztberg {pre-eminent TransplantPhysician and KOP } .. cant wait to hear her views ! ]

Please DYOR….GLTAH.

Anjo-Roch

Bell Potter

Tanu Jain – 12^thAugust 2020

Initial thoughts

• The FDA documents are largely focused on 3 issues – manufacturing (potency and consistency), efficacy to support approval of the product for steroid refractory GvHD in children and safety.
• Reading into it safety is not an issue and the questions really FDA is focused on is manufacturing and efficacy, which is as per our expectations.

In our view, the main uncertainty and concerns reading the documents arearound whether more clinical work will be required to support product approvaland whether the critical quality attributes that MSB has including its potencyassays ensure that the product is consistent from one batch to the other. We believe the fact that FDA hasan ADCOM to discuss these issues is actually a positive for MSB.

The committee will be asked to vote on the question ‘Do the available data support the efficacy of remestemcel-L inpediatric patients with steroid-refractory aGVHD?

BP view:In our view,given there is no safety risk, high unmet need (no approved product under ageof 12 for SR-aGvHD), high mortality and the survival benefit in the Phase 3open label trial with Ryoncil, if MSB can address the concerns of the ADCOMpanel of experts and the FDA and get a positive vote in favour of approving theproduct on the 13^th.. the company will still be on track forapproval before the 30^th sep’20 PDUFA date.

Manufacturing

FDA position:FDA’s position is that the analyticalmethods used for product characterization of remestemcel-L do not have ademonstrated relationship with clinical outcomes and that the product’s proposed immunomodulatory mechanism of actionhas not been demonstrated in vivo in study subjects receivingremestemcel-L. Without a demonstrated relationship with clinical effectivenessand/or in vivo potency/activity, controlling these CQAs (Criticalquality attributes) may not be sufficient to ensure the manufacturing processconsistently produces remestemcel-L lots of acceptable quality.

Key questions on manufacturing that FDA wants the committee to discussare as below:

1. DISCUSSION: Product quality attributes measured for remestemcel-L are intended to ensure that key qualities of the drug product are maintained consistently from lot to lot.

Pleasediscuss the adequacy of the potency assay established by the Applicant for remestemcel-L.

1. DISCUSSION: In addition to discussion of potency, please propose and discuss other possible product quality attributes or characteristics that could be controlled to better assure consistent quality of remestemcel-L with regard to safety or effectiveness of the product.

BP view: This is in line with what we expected the FDA will really focus on inthe ADCOM. Being a novel product (first allogeneic stem cell product topotentially be approved in US), product consistency and as it relates toeffectiveness are key issues FDA focuses on. As we noted in our last note,Novartis’ Kymriah the first CAR-T therapy to be approved in US also had similarquestions and discussions in their ADCOM. CAR-T manufacturing in our view ismore complicated than that of MSB’s technology i.e. Mesenchymal Stem Cells.

We believe there are two issues. MSB needs to prove that its CQAs ensure batchto batch consistency and secondly demonstrate potency of the product throughlinking it to clinical outcomes. In our view, MSB’s data shows that based onsurface receptor expression, they are able to ensure their product purity ishigh and there is little variability between their different productlots/batches. The second is the assays it has which links the potency andactivity of the product. MSB has established a potency assay using thresholdlevels of TNFR1 on the cells. In vitro they have experiments which support thisimmunomodulatory action. The company has data showing correlation of TNFR1results with Survival on Day 100 post treatment. The fact that GVHD is amultifactorial disease makes it challenging to link clinical results withimmunomodulatory MoA as there may be more than 1 MOA at work, which is reallywhat we believe the crux of the concerns likely stem from. We believe the team at MSB iswell prepared to address the committee’s concerns.

Efficacy

FDA position: FDA seeks inputfrom the committee on whether the results of Protocol MSBGVHD001, the onestatistically-positive single-arm trial, in a landscape of the multiplenegative clinical trials for the treatment of aGVHD, including randomizedcontrolled trials, is adequate to allow one to conclude that remestemcel-L iseffective in the treatment of SR-aGVHD in pediatric patients.

Key questions on efficacy that FDA wants the committee to discuss andvote on in the afternoon session are as below:

1. DISCUSSION: Limitations of the single-arm study design of MSB-GVHD001 include, but are not necessarily limited to, the following: a) limited ability to ensure that baseline prognostic factors, both known and unknown, were similar in MSB-GVHD001 and the Applicant’s control; b) limited ability to ensure that unknown and known potential confounding factors (e.g., additional salvage therapies for treatment of aGVHD) that could influence efficacy outcomes were similar in MSB-GVHD001 and the historical control group; c) potential bias with selection of patients, subjective nature of the assessments to score aGVHD d) the adequacy of the historical data to support a null hypothesis.

Pleasediscuss the strengths and weaknesses of the design of Study MSB-GVHD001.

1. DISCUSSION: As noted previously, primary endpoint results in Study MSB-GVHD001 were statistically significant; the measured response was durable (median 54 days). However, the results of Studies 265 and 280, the two randomized trials, did not provide evidence of a treatment effect for remestemcel-L in aGVHD, even when reanalyzed using the efficacy endpoint of Day-28 ORR. In fact, a treatment effect has not been identified in any of the previous clinical trials conducted in various disease entities, including: Type 1 diabetes mellitus, Crohn’s Disease, myocardial infarction, or severe chronic obstructive pulmonary disease and the mechanism of action of remestemcel-L in mitigating aGVHD remains unclear.

a) Pleasediscuss whether the results of Studies 265 and 280 are relevant to theeffectiveness of remestemcel-L for the treatment of pediatric SR-aGVHD. In yourdiscussion, please consider not only the similarities and differences in thestudy populations, but also any other factors (e.g., number of years betweenstudies; pathophysiology of adult aGVHD / SR-aGVHD vs. pediatric aGVHD /SR-GVHD) that you deem relevant.

b) FDA mayrequire an additional clinical trial to support the effectiveness of theremestemcel-L in pediatric SR-aGVHD. If so, what are your recommendationsregarding the design of such a trial? For example, please discuss thepopulation (e.g., aGVHD or SR-aGVHD; adult and/or pediatric), treatmentassignment (randomized vs. single-arm), primary and secondary endpoints (e.g.,Day-28 ORR, Day 100 survival, Day 180 survival, etc.), and any other aspects ofthe trial design.

BP view: The FDA essentially is rehashing data from trials done by Osiris 10years back which had failed to show a significant clinical benefit in GvHd andother indications (Protocol 265, 280) and wanting the committee to discusswhether these trials being randomized are relevant to the current approval oris the positive data seen in MSB’s Phase 3 trial (GVHD001) sufficient tosupport its efficacy. Wenote that there is significant difference in these old Osiris trials in termsof patient population, trial design, primary endpoints etc. plus these trialswere done 10 years back with cells which were ~50% less potent than the cellsMSB used in its Phase 3 trial and which it is looking to commercialise. We note that Jakafi which is the other product approved for adult GvHD (over age of 12 years) in US with serious side effects was also approved on a single label open label trial last year.

The second point is FDA asking input on additional clinical trial. Webelieve strongly likely scenario is to ask for this additional trial as a postmarket study (which we always expected). The likelihood of the committeewanting another trial prior to approving the drug we believe is slim. Therefore in this scenario wewould still expect approval for Ryoncil for paediatric GvHD by 30^thsep’20, with MSB conducting post market study which will also likely help itslabel expansion in future to adults GvHD.