Cell Therapy News/Articles, page-119

Maxim Update: 1 February 2018

Rising Revenues and a Falling Burn Rate as we Prepare for what could be Significant Catalysts

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0	Summary:
1	Mesoblast reported changes to its cash position for the December quarter (FY: June 30), with a net cash outflow from operations of just $14M; this includes a €5M upfront payment from TiGenix (TIG.O - NR). Mesoblast ended the period with $47M in cash and has a $90M equity facility in place. TiGenix paid to license IP. Recall that Mesoblast recently gave TiGenix freedom to operate (global commercialization) for the company's adipose stem cell product "Cx601," for the local treatment of fistulae. In addition to the €5M upfront payment received in the previous quarter, TiGenix will pay €5 million within 12 months, and up to €10 million in product regulatory milestones. Additionally, Mesoblast will receive single digit royalties on net sales of Cx601. Time to shift the focus to catalysts: Mesoblast's cash position should be sufficient (with a quarterly burn rate of ~$20M) to reach key inflection points in heart failure, disc degeneration, and GVHD: · GVHD, MSC-100-IV: The open-label P3 trial in pediatric patients with steroid-refractory acute GVHD has now completed enrollment with the primary endpoint data (day 28 readout) in 1Q18, followed by day 100 survival data in 2Q18. Heart failure (HF), MPC-150-IM: The P3 study in class II-III HF has enrolled over 400 patients and is on track to complete enrollment (N=600) in 2H18. The P2b study in end-stage HF (Class IV) completed enrollment (N=159) in 3Q17 with data readouts expected in 1Q18 and 3Q18. Disc Degeneration (DD), MPC-06-ID: The P3 (N=360) study is expected to complete enrollment in early 1Q18. The study is evaluating durable pain reduction and functional improvement (aiming for similar results observed in the N=100 P2 study). Rheumatoid Arthritis (RA), MPC-300-IV: Data in the P2 study demonstrated durable efficacy in anti-TNF refractory patients going out to 52 weeks. The totality of the data will be used to design a P3 program. Conclusion: Mesoblast continues to make progress across multiple late-stage regenerative medicine programs. Key data points are expected in Q1 through the rest of 2018, which if positive should provide catalysts for the stock, in our view.
2	Details:
3	Heart failure program: This trial’s primary endpoint is a comparison of recurrent heart failure-related major adverse cardiovascular events (HF-MACE) in advanced congestive heart failure (CHF) patients receiving either MPC-150-IM by catheter injection into the left ventricular heart muscle or sham control. More than 400 of the expected 600 patients with advanced CHF have been enrolled to date. Trial enrollment is expected to complete in 2H18. After reviewing patient data at two time points, in April and October 2016, the trial’s Data Monitoring Committee maintained its recommendation that the study should continue as planned. An interim analysis of the trial’s primary endpoint in April 2017 (first 270 patients) was also successful and the trial was cleared to continue. In December 2017, MPC-150-IM received the FDA's Regenerative Medicine Advanced Therapy Designation which allows for multi-disciplinary, comprehensive interactions with the FDA to support the efficient development of, and potential accelerated approval pathway for the program, as well as eligibility for priority review.

GLTAH.