Transcript for anyone who would rather read it
https://omny.fm/shows/ceo-interviews/dr-silviu-itescu-mesoblastSilviu, it seems like there was only 12 patients in the testing you did of Remestemcel-L. Is that enough? I mean, that doesn't qualify as a clinical trial, does it?No, it wasn't a clinical trial. It was what I would call compassionate care. We were specifically asked to provide cells to patients in the most dire of circumstances who had failed everything else, and these patients typically have 80 per cent mortality in intensive care on ventilators. So we provided ourselves, under a particular protocol that the FDA sanctioned and we've had some spectacular results. And on the basis of that, we're now moving forward with a Phase III trial of about 300 patients. That is the trial that will prove definitively if the technology works in these patients and if so, hopefully we'll get FDA approval.
This will be 300 COVID-19 ICU patients?That's right, COVID-19 ICU in severe respiratory distress syndrome, yeah.
Because the result of the 12, was that 10 of them survived, which is a flip. It's a reverse of the usual survival rate, right?Exactly right. So they survived. They're extubated and you know, 70 per cent of them, seven out of 10 are home. And so it's completely the reverse of what they're seeing in the New York City hospital scenes with patients of this degree of severity. But you're right, the numbers are small and that's what we've got to do a randomised controlled Phase III trial and that's what we're doing.
mce-anchorYou had previously got FDA approval to test this drug, right?The only way we could test the drug in these 12 patients was with FDA approval. The FDA gave us a special agreement for us to go forward and provide it under emergency compassionate use to the physicians at Mount Sinai. And then on the basis of these results, we went back to the FDA, who have now approved a 300 patient Phase III trial.
It's all done with FDA approvals and oversight, which is critical. And remember that the FDA is also in the middle of reviewing the same product for Graft Versus Host Disease (GVHD) in children. The FDA is very familiar with our product. They've got all of the historical data in hundreds of children and previously adults. And we've leveraged that information especially around safety and around the fact that GVHD is a very similar disease in terms of immune activation, as is coronavirus in the lungs and with all that information together, we went to the FDA to seek their approval to get going.
Is that a Phase III trial for GVHD?Yes, no, that's completed.
That’s completed now?The Phase III trial for GVHD was completed long ago and we've applied for FDA approval in January. And the FDA has accepted our file and has given us what's called priority review, which means that they have to review and complete the review process within six months and they've given us a date of potential approval of September 30th.
Now, prior to that, we will have what's called an advisory committee meeting well in advance of that September date where we present all of the data publicly in a public forum to experts in the field who then will formally vote on whether or not they think our product should be approved and they’ll be advising the FDA.
So that's for GVHD. So how long do you think it'll take for the clinical trial on COVID-19 to be done and completed?We think it'll take about three months of enrolment. So three months to enrol. And then all the patients have got to complete at least 30 days of follow up and then we'll read out the trial. Now along the way, we will have some interim analyses, so it's possible that we'll have some top level data sooner.
This drug is, do we call it a drug? Is it a drug?No, it’s called cell therapy.
It's a cell therapy, yeah, and it's called Remestemcel-L, right?That's right.
mce-anchorIs it being tested or has it been tested for anything else apart from GVHD? I think that you've been looking at it for Crohn's disease, haven't you?That's right. So it's being developed for severe inflammatory conditions and it's being developed for intravenous use in those diseases. Graft Versus Host Disease was the first one. It's also being tested in several hundred patients with severe Crohn's disease, who failed anti-TNF and other anti-inflammatory drugs. And there again, we've seen some positive outcomes and we'll be updating the market on those outcomes in due course.
Beyond GVHD, it’s also been used in inflammatory lung disease. So it's being used in patients with chronic obstructive lung disease. This was a 60 patient Phase II trial. Half the patients had evidence of inflammation as measured by a biomarker called CRP. And half the patients did not have inflammation and it turns out that if the patients had inflammation in the lungs with a high CRP level then the use of Remestemcel significantly improved lung function over a six to 12 month period and improved their ability to function and walk, for example, by more than 50 metres. That's substantial functional improvement.
And that was actually the first clue that we had that the cells are beneficial if you've got evidence of inflammation in the lungs. Now the degree of inflammation in the lungs in chronic lung disease, chronic obstructive airways disease is much, much lower, of course, than the degree of inflammation in the setting of coronavirus lung disease. But it was our first clue that the cells intravenously could reduce inflammation in the lungs and that was part of the rationale for why we went forward with coronavirus lung disease treatment.
mce-anchorYeah. Well, COVID-19 is an inflammatory lung disease, isn't it? Or at least a lung condition, apart from anything else?Well, it turns out that the virus infects the lining of the airways and the immune system then comes into your healthy lungs in order to try to eliminate the virus and you have sort of a very severe battle going on in your lungs where multiple arms of the immune system are secreting cytokines, factors that typically act to dampen down the virus. And unfortunately, what happens is that as a bystander, your lungs are a target of these cytokines and you get a lot of destruction of your normal lungs. What our cells do is they're the body's natural control mechanism for excessive inflammation, if you will. They have receptors for these aberrant cytokines and when you put them in the middle of, what's called a cytokine storm, they're activated by these immune cytokines and then they turn off the very cell that secreted them.
So our cells are able to control multiple arms of the immune system simultaneously. And so diseases where multi-cytokine production is at the core of the disease process, are ideal for management with our cells. Graft Versus Host Disease is one of those diseases. Coronavirus lung disease is another one of those diseases, right? So that's what the mechanism of these diseases have in common that our cells are able to be useful for. When you inject our cells intravenously, the first place where they migrate to, are the lungs. So inflammation in the lungs is an ideal target for Remestemcel-L. Beyond COVID-19, other causes of inflammation in the lungs that we will be seeking to address, including influenza virus, influenza respiratory distress syndrome, which is a major problem, 60,000 people a year in the United States alone die from influenza-related acute respiratory distress syndrome in the Intensive Care Unit. So that's a big unmet need.
As well, as I mentioned earlier, chronic lung disease, obstructive airways disease, which is aggravated by inflammation such as occurs, for example, with influenza virus on a seasonal basis. So there are a number of severe inflammatory conditions of the lungs that I think our cells would be applicable for. But we're starting by addressing COVID-19 ARDS.
mce-anchorHow many of the cells do you inject either for COVID-19 or for the other conditions you're treating?Yeah, we've got a standard protocol now, and that's the protocol that we use to treat patients with acute Graft Versus Host Disease, which is 2 million cells per kilogram body weight twice in the first five days or so. For diseases like GVHD or Crohn's disease, we continue to treat for about four weeks intravenously in order to put these patients into remission. For coronavirus lung disease, just the two doses in the first five days appears to be sufficient as a protocol, to make a substantial difference and get these patients off ventilators. That’s certainly the protocol that we used in the first 12 patients, that will be the protocol in our Phase III trial.
Two million per, what did you say, kilogram?Per kilogram in two doses over a five day period. So it's a very acute treatment. It's not a chronic ongoing therapy. It's acute.
And how do you manufacture these cells?At the moment we're manufacturing in Singapore under contract with the world's leading biologics manufacturer, Lonza, who have a very large plant in Singapore. That plant has got already FDA approval for other treatments for monoclonal antibodies. And we hope it will get approval to make ourselves for the FDA for the US market. Obviously for COVID-19 lung disease, which is a real big, much larger unmet need, for example, than GVHD many, many more patients, we need to now think about increasing the production. And we'll do that in the Lonza site in Singapore as well as we're looking at sites in the United States. And we're talking to the US government around the potential for the government to support our manufacturing requirements in terms of investment both at the level of capacity and at the level of supply purchase.
So are these cells expensive to make, I mean, you're obviously injecting 100-200 million cells or so per patient. Is that an expensive treatment? What are we talking?Look, we're working at the moment in our first generation production, we're talking about 60 per cent gross margins, that sort of thing. So, you know, we have a commercial business opportunity that is clearly feasible and we have proprietary manufacturing technology that will substantially increase the yield and reduce the manpower required for production. We've got proprietary media, we've got use of novel technologies including bio-reactors. And so we've got ways of increasing the production levels by anywhere from 10 to 20-fold that will substantially increase capacity and reduce the cost of goods and obviously have a great impact on gross margins. So we’re well positioned to meet the supply…
mce-anchorSixty per cent gross margin on what sort of price? I'm just wondering what the price is?We’re not talking about prices. Well, I mean, you know, that's something down the track. And, you know, once we get approvals and we get reimbursement and we get insurance coverage we can talk about specific prices. But the ability to scale up commercially means that we can make product at a sufficiently economic cost of goods structure that even our first generation product gives us an appropriate gross margin that makes us a profitable business.
But are we talking a $100 a treatment or $1,000 or $10,000? What’s the ballpark?It’s not a question of what's the cost. Well, it’s the same ballpark as you would expect for patients with severe disease. I mean, you know, it depends if we're talking about a very rare disease that kills you versus a very common disease that's chronic, right? I mean, there are diseases in the United States, particularly where a cure, which is what we're talking about, right, for Graft Versus Host Disease, a four week treatment is effectively a cure that will put children into long term remission and even cure. And we've got patients 15 years later are Harvard Medical School students, right?
So we're talking about curing of these diseases. You know, the ultra-orphan indication in the US reimburses very highly for orphan indication because they significantly impact outcomes. For example, you know, unfortunately a child who dies from Graft Versus Host Disease in the US system, will spend several months in Intensive Care, and will cost the healthcare system about $1.5 million dollars more than a child who has the same disease but survives, right?
So if we can save the healthcare system $1.5 million dollars by obviously making sure the child survives, not only is that important as an outcome, but it's economically very important for the hospital and for the healthcare payer. When you have those kinds of differences in outcomes, it's a negotiation to be had and we can justify with an appropriate pricing. But that's a commercial discussion that ultimately is a negotiation between the company, the healthcare payers, the hospitals, and you find a middle ground where basically everybody finds a place that they’re comfortable with.
Most importantly, reimbursement and payments are related to clinical outcomes and if somebody is alive and well and thriving for the rest of their lives, you've really impacted them. It's going to be exactly the same with coronavirus. It’s kind of being said that the people most susceptible to coronavirus, in fact, are the elderly. But that's not what we're seeing actually in our experience now in Intensive Care. Fifty per cent of the patients that have received our cells, the average age was about 50 years old. That's not old at all.
In other words, half the patients who have received our cells were in their 30s and 40s. So we're seeing quite a diverse range of ages and if you can save a life it's not just about how much time are you saving from Intensive Care, but the impact you’re having for the rest of their life. And obviously that's reimbursed in a certain way as opposed to at the end stage of life. A very different way of looking at mortality benefits.
I imagine if Remestemcel-L comes through this clinical trial of 300 that you're doing now it will be a situation where the treatment gets applied to anyone who goes into ICU for COVID-19, right? I mean, that'll just be a standard treatment, I imagine.That's exactly what we would be aiming to have. But you know, at the moment we're talking about hundreds of thousands of patients are being projected in the middle of this pandemic right now. I mean, in the US 55,000 people have died and what they die of is this, is coronavirus related acute respiratory distress syndrome in the Intensive Care Unit, and that's within the space of the last two months or so, right?
We hope that this gets under control at the front end, meaning a reduction in spread, a reduction in prevalence, and then it's manageable. But otherwise, the numbers at the moment are just overwhelming. We couldn't make enough product right now to meet that sort of number of patients. So look, we think that at a steady state because I think it's highly unlikely that… this virus will be with us, I think, for a long time, even with vaccines and even with antivirals, and we certainly hope that those are going to come through.
Those will reduce the incidence and prevalence, but they won't eliminate the infection. This is a very virulent virus and the progression, the case fatality rate, or the progression from infection to symptoms to ICU and acute respiratory distress syndrome is very high relative to, for example, influenza virus, it's 10 times more lethal. Even with a substantially reduced incidence and prevalence, we project there'll be at least on an annualised basis, something like a hundred thousand cases a year in the US alone of patients needing ICU care. We’re building ourselves up from a manufacturing perspective to be able to meet that kind of a target market.
Right. So how much money do you make out of the 100,000 patients a year? I mean, what are we talking?Again, at the moment, we want to be able to make a product that's going to help the number one complication of this virus, which is death from respiratory distress syndrome. We're going to make it available, and make it available as economically and as appropriately as possible, but obviously it's a billion dollar market opportunity for us on an ongoing basis. But that’s not the primary objective.
The primary objective is to have something we hope that offers the possibility of surviving this because without something like the strength of our cells, there's nothing else that has a chance that we can see at the moment, of switching off inflammation. Many things have been tried. None have succeeded. Not that we’ve necessarily succeeded yet either. We've only seen a small number of cases, but the results have been extremely exciting and others using similar cells have shown, you know, similar outcomes.
I think given the totality of the evidence, including the many hundreds of patients we’ve treated with acute Graft Versus Host Disease, a very similar cytokine storm disease, we're very confident that what we're seeing here are signals that are going to point to us being successful in our Phase III trial. And if we are, then we’ve at least got a therapy that can address the high cause of mortality in these patients. We’ll be able to make it at the right cost and we'll be able to make it available at an affordable price and it's important that something like this gets to market as quickly as possible, if it works.
Great to talk to you again, Silviu. Thanks very much.Thanks, Alan, appreciate it.
That was Silviu Itescu, who is the CEO and founder of Mesoblast.
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