A brief recap of what has happened with Ryoncil in the past several years, and how we got to where we are today.. and why I think its looking very positive for Mesoblast.
Feb 2020 = MSB submits Ryoncil BLA for pediatric Steroid Refractory acute Graft Versus Host Disease (SR-aGVHD)
Aug 2020 = ODAC panel 9-1 Vote; that Ryoncil is effective
Oct 2020 = FDA issues CRL #1, recommending at least one additional trial to provide further evidence of efficacy and required further scientific rationale to demonstrate the relationship of potency measurements to the product's bioactivity.
Nov 2020 = Type A meeting, FDA do not agree with Accelerated Approval for Ryoncil in children.Approx.
June 2021 = CBER (FDA) recommends that Mesoblast meet with OTAT to agree on approach to address CMC issues raised in CRL
Dec 2021 = OTAT indicates that MSB's approach to address CMC issues raised in CRL is reasonable
Oct 2022 = MSB submit new data to IND file
Feb 2023 = MSB resubmits Ryoncil BLA for SR-aGVHD in childrenFDA complete manufacturing inspection in Singapore, no issues raised.
Aug 2023 = FDA issues CRL #2, requesting more data before approval.
Sep 2023 = FDA and MSB meeting, FDA clarifies that the key data required relates to CMC, specifically potency assays to show that the phase 3 study was an adequate study. FDA acknowledge improvements in MSB's potency assays. MSB believe they have the data (potency assay was in place during the phase 3 trial, but required to be reanalysed to meet FDA criteria)
March 2024 = FDA notifies MSB that available data for phase 3 trial is sufficient to refile i.e. addresses CMC issue raised in CRL #2. Key thing to note is that the FDA will not accept a resubmission unless the applicant has addressed all issues raised in the CRL. The FDA has essentially told MSB that they will accept a resubmission, meaning that they believe another trial is not required to satisfy the FDA that the phase 3 trial is an adequate study.
It is important to also note: - FDA approval generally requires three key boxes to be ticked i.e. 1. Manufacturing (CMC/Potency assays, inspection), 2. Efficacy, 3. Safety - CRL #1 raised issues around 1. Manufacturing and 2. Efficacy i.e. Safety has been ticked- CRL #2 only remaining issues is around 1. Manufacturing, specifically CMC/potency assays i.e. Efficacy has been ticked - After CRL #1, the FDA requested that MSB meet with OTAT to get agreement before resubmitting the BLA. Suggesting the gap between what MSB have presented and what the FDA are asking for is not yet fully clear and likely quite complex. - The time between getting OTAT's green light (Dec21) and resubmission (Feb23) was 14 months. - This most recent update in March 2024 does not recommend that MSB meet with OTAT before refiling, suggesting that the FDA is pretty comfortable with what they already have on hand has addresses the CMC/potency assay issues raised in the CRL - The most recent update in March 2024 suggests that MSB will refile their resubmission within the next 3 months (compared to 14 months prior).- MSB released that Mar24 announcement right after the meeting with the FDA, with a very clear outcome which is rare given they tend to wait for the FDA's formal minutes before concluding the outcome of a meeting with the FDA. This tells me that the FDA was indeed very clear with their feedback in this meeting, so much so that MSB did not bother with any caveat (which they always have done in the past).
MSB will get formal minutes from that FDA meeting in the coming weeks (usually 3 weeks post meeting), where they will likely give us an update on some more details from the meeting, such as what they had to say about the adult trial.
Just a week ago, I thought that Revascor / Rex for CHF LVAD was going to be MSB's first product to go to market in the US (through Accelerated Approval (AA) pathway via RMAT). This in itself is still the most important announcement this year, for those who recognise its significance, they would have went all in (just look at Dr Rose). Unlocking a new treatment paradigm for heart failure is something most will not appreciate until much much further down the line, but when people start talking about inflammation and heart failure in decades and centuries to come.. this is where it all began, the pioneers were Mesoblast and I'm so proud to be here to witness it. And it is likely not going to be too far behind, but AA filing will either be 2H24 or 1H25, so approval is likely going to be some time in 2025.
Having said all that, I'm glad my instincts were wrong and in fact, Ryoncil for pediatric SR-aGVHD has very much taken back that front runner position and could very well be approved by calendar year end.
Revascor for HLHS has also come from the woodworks in Feb24, with the FDA granting Orphan designation as well as Rare Pediatric Disease designation, and MSB have indicated that they will try go for AA (but will need a RMAT designation first). If all goes well, the AA BLA is likely going to be submitted in 2025.
The confirmatory Phase 3 CLBP ($$billions annual revenue potential) will start recruitment soon, and it has a 12 month primary endpoint. Based on the first phase 3 trial, this has a good chance of being stopped early for overwhelming efficacy. Recruitment finish by end of 2024 estimate, read-out will be in 2025 (if stopped for overwhelming efficacy) or early 2026 (if study goes to completion).
Some are wondering why the market is re-rating MSB so vigorously, when the announcement that stoked the sudden rise in isolation doesn't appear that special... I personally believe it makes a lot more sense, when you take into account Mesoblast's genuine blue sky potential and where it was at $A0.25-0.30 (absolute rock bottom).
There is a reason why it was valued A$2-3bn just prior to Ryoncil's first BLA outcome, the commercial ramifications of success for even one product will make this a global leader in regenerative medicene. Not to mention it is targeting some of the biggest markets globally, being heart failure and choric lower back pain.. both are multi-billion dollar markets (annually) in their own right.
For a company that was on its knees just a few months ago, and trading at rock bottom (especially after the cap raise) ... Mesoblast is now cashed up (and yes, also diluted diluted diluted) with at least 12 months runway ... and suddenly with a few massive wins with the FDA in quick succession, meaning they could potentially have two products in market by end of 2024 / early 2025 ... the market's vigorous re-rate reflects the vigorous turn of fortunes from rock bottom to somewhere where the market can get a glimpse of that that blue sky potential again.
Whilst this run will eventually plateau, there is little doubt in my mind the direction of the share price over the next 12 months.
(20min delay)
