“…will enable us to provide a clear timetable to product commercialisation and early revenues"
Do you think it possible that in the world of stem cells that the above statement in fact could be true? That perhaps our perception of timelines are warped because we compare it to very different business models. That maybe our expectations are too high for the business of stem cells? Genuine question! Cheers
Djaw,
The best way to answer your question which relates specifically to the bone marrow transplantation question is to track directly subsequent events as articulated by the company in relation to this programme.
February 2010 "The company’s product is being developed under a US Food and Drug Administration Orphan Drug Designation. This means that there is the potential for a fast track to Phase 3 and, if successful, accelerated product registration."
July 2010 "Phase 3 meeting scheduled with FDA. Our upcoming meeting with the FDA will enable us to provide a clear timetable to product commercialisation and early revenues."
July 2011 "MSB Receives FDA Clearance for Phase 3 Bone Marrow Transplant Trial. This product may be the first of Mesoblast’s revenue generating biologic therapies in both the US and Europe. The Phase 3 trial will be conducted together with Mesoblast’s strategic alliance partner, Cephalon Inc., who will fund the trial.”
October 2011 Annual Report, page 4: Chart entitled ““Off-the-shelf” product franchises driving value creation” shows Bone Marrow Transplantation as the most advanced program in MSB’s product portfolio. The bar chart shows the bone marrow trial just entering the Phase 3 region.
[Notably, it also shows which studies are being funded by Cephalon at the time, namely Bone Marrow Transplantation, Congestive Heart Failure, Acute Myocardial Infarction, Chronic Refractory Angina and Neurological Diseases. Post the acquisition of Cephalon, Teva is not funding Bone Marrow Transplant, Acute Myocardial Infarction, Chronic Refractory Angina and Neurological Disease trials.”]
Commentary in relation to bone marrow transplant program: “During the year, we received approval from the FDA to commence a Phase 3 clinical trial using our MPCs to expand hematopoietic precursors from cord blood for transplantation in cancer patients whose bone marrow has been destroyed by high dose chemotherapy. This clearance occurred within 30 days, the minimum timeframe possible, serving again to further validate our clinical, regulatory and manufacturing capabilities. Mesoblast’s objective is to develop a therapy that results in effective bone marrow reconstitution without the potentially life-threatening Graft-Versus-Host Disease (GVHD). If our product is successful, it could increase the total number of untreated donor transplants by 3-4 fold, providing a therapy for patients who currently cannot find a donor and who would otherwise die.”
August 2012 Annual Report. This year, no chart is provided with the progress on MSB’s various trial programmes. Commentary in relation to bone marrow transplant program: “Mesoblast’s clinical approach to expansion of hematopoietic stem cells could broaden use of bone marrow transplantation to those in need of the procedure but who currently cannot find a donor, without the need for full matching. If the Phase 3 confirms the Phase 2 data generated from 36 patients, the procedure could reduce the timeframe to engraftment, improve survival, and significantly decrease the cost of care for this patient population.
December 2012 New England Journal of Medicine publishes article “Blood Cell Expansion Trial”, referencing Dr Shpall, who provides a summary of the “13-patient Phase1/2 study and confirms that “Mesoblast’s mesenchymal precursor cells are now being formally valuated in a Phase 3 trial led by Shpall.”
October 2013 Annual Report, page 5. Chart entitled “Cell-Based Technologies Deliver Multiple Product Pipeline” shows bone marrow transplantation trial position at the same position as it was the last time the chart was published, namely 2 years earlier, suggesting that the Phase 3 trial has not progressed over those two years. Commentary in relation to bone marrow transplant program: “The Phase 3 clinical trial using hematopoietic precursors from cord blood for transplantation in cancer patients is ongoing. If our product is successful, it could increase the total number of untreated donor transplants by three or four fold, providing a therapy for patients who currently cannot find a donor and who would otherwise die.”
August 2014 Company announcement headed: “MSB Unveils Path to Bring Products to Market” Bone marrow transplantation is relegated to “Tier 2” status in newly-created ranking system. It is listed as the last bullet point of the group’s Tier 2 status products. Tier 1 status products are defined as having “medium-term” revenue potential, while Tier 2 products are described as “having committed funding to the next value inflection point, and will advance into Tier 1 on merit of data, market opportunity or partnering capability.” Under the section headed: “Outlook for the Next 12 Months” on page 3 of that announcement, the bone marrow transplant program receives no mention after “MSB expects to execute on the following objectives in the next 12 months:” Company Presentation headed: “2014 Results and Corporate Strategy – Focus on late stage product development”, on page 9 the chart headed “Robust Development Portfolio of Tier 1 and Tier 2 products” shows the bone marrow transplantation program barely moved, compared to 2013 and 2011, from its relative position within the Phase 3 region. The schematic representation still shows the trial less than half way complete.
October 2014 Annual Report, page 5: Chart showing distinction between Tier 1 and Tier 2 products. Phase 3 zone of the chart now labelled “Phase 3 Ongoing”, and shows bone marrow transplantation occupying the entire zone. But this change in nomenclature means that the relative progress of the trial can no longer be determined. No commentary specific to bone marrow transplantation is contained in the Chief Executive’s Report. Direct commentary is provided in the Directors’ Report (page 25), as follows: The Phase 3 clinical trial using hematopoietic precursors from cord blood for transplantation in cancer patients is ongoing. If our product is successful, it could increase the total number of untreated donor transplants and provide a therapy for patients with malignant diseases for which transplantation is the only hope of a cure.”
November 2014 AGM Presentation: Chart on Page 11 headed “Broad portfolio of distinct, late-stage clinical product candidates” shows Bone marrow transplant as half-way through the Phase 3 zone. Chart of Page 32 headed “Upcoming milestones” – which extends out to 2018 – bone marrow transplant receives no mention at all.
Now, I don’t know about you, but none of this feels at all to me like the provision of “a clear pathway to commercialisation or early revenues”, which was the company’s 2010 outlook opinion.
We are almost five years down the track and no revenues look to be imminent from bone marrow transplantation.
Put another way, what has happened is that one of the company’s highest-profile, most promising programmes in 2010, today looks like it is significantly in stall-mode, if not completely.
Other MSB programmes have also been subsequently down-graded by the compared to earlier statements by the company.
And that’s the gist of my point about not accepting outlook statements at face value; things can change – and they do - for a variety of reasons, both extraneous and strategically intentional on the part of management.
Which is why, as so many people always say – even if it’s just lip service – always do your own independent research and don’t just take accept anything at face value, even if it appears in an official company announcement or presentation.
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