FROM Motley Fool article 15th July 2020
https://www.********/investing/2020/07/15/about-to-buy-penny-stocks-look-at-these-2-companie.aspxA promising COVID-19 treatment, but that's not all
Investors would be forgiven for avoiding stem cell stocks such as Mesoblast. Despite decades of technological hype, the field of stem cell research hasn't generated many commercial success stories. But that might be too broad of a condemnation. After all, there are a half dozen different types of stem cells, several ways to harvest or grow them, and new advances in genetic engineering that could make next-generation treatments safer, more effective, and easier to manufacture.
Mesoblast might be the most promising stem cell company accessible to individual investors. Earlier this year, the Australian biopharma submitted a biologics license application (BLA) to the U.S. Food and Drug Administration (FDA) for remestemcel-L in pediatric steroid-refractory acute graft-versus-host disease (GVHD). Regulators will decide on the application by Sept. 30, which means the company could transition to commercial operations before the end of 2020.
The product, which will be branded as Ryoncil in the U.S., has been sold under the Temcell brand in Japan since 2016. In the trailing-12-month (TTM) period ending March 31, Mesoblast received $7.6 million in royalty payments from the Japanese sales of its partner, JCR Pharmaceuticals. The U.S. market for GVHD is eight times larger than that of Japan -- and the biopharma owns 100% of the rights.
Investors have two major events on the calendar before the FDA rules on Ryoncil in September. First, a phase 3 clinical trial evaluating rexlemestrocel-L in advanced heart failure is expected to report top-line results in mid-2020 -- likely any day now. Most studies of stem cells in inflammatory ailments such as heart disease and stroke have disappointed to date, so investors might want to keep their expectations in check.
Second, a phase 2/3 clinical trial of remestemcel-L in COVID-19-associated acute respiratory distress syndrome (ARDS) isexpected to have results this summer. The product candidate is being administered to individuals who require mechanical ventilation to survive. While investors are hopeful that encouraging results from a 12-patient study completed in April will be replicated in the ongoing 300-patient study, the quickly evolving landscape of COVID-19 treatment could affect the product's market potential.
Many doctors are now hesitant to place COVID-19 patients on ventilators, as the practice significantly increases the lethality of the disease. Fewer patients on ventilators mean fewer patients for the designed use of remestemcel-L (although it's good news from a public health standpoint). However, it's possible for Mesoblast to study the drug candidate's use in severe cases of COVID-19 that don't require mechanical ventilator support, which couldsignificantly increase the patient population for the treatment. First things first, of course: The company needs to deliver positive results before investors get too carried away.
Long story short, Mesoblast is a high-risk, high-reward cellular medicine developer. The Australian biopharma is widely expected to earn approval for Ryoncil in pediatric steroid-refractory GVHD in the United States in 2020, which would significantly improve its financial stability. And if rexlemestrocel-L is effective in treating advanced heart failure or remestemcel-L shows promise in severe COVID-19, then the company could earn a market valuation well above its current $1.5 billion level.
They're all talking about it in USA now - forums, posters, promoters....
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