Hi ecoool2...thanks for you prescient and excellent post. My initial thoughts are as follows.
1). Confirmatory trial was always going to be precondition for marketing approval. This had been clearly stated clearly in investor briefing/s. I think we are most fortunate to have received NIH funding for the first trial of 159 patients and i think funding is likely to come from the same source this time. I would expect approx 150-200 patients being enrolled . The previous trial was done independently of the Company and the patient profiling did not optimise the clinical opportunity....for example enrolling younger females undergoing bridge to transplant treatment skewed the results of the trial, rather than an older males with ischemic heart disease having an LVAD implanted for “destination therapy”. Added to which we had the thrombotic events fiasco with the LVADs which of course had nothing to do with Mesoblast. Shareholders who are concerned about the balance sheet should be delighted that the approval pathway for this indication does not require any major clinical trial funding...a point which will not be lost on potential partners. I think that Mesoblast will be confident that as the confirmatory trial forms part of their IND application they will have significant weight in determining all aspects of the trial design.
2) Timelines. I would speculate as follows. Plans for the definitive trial will be tied down in the next month or so. The powering of the trial could be 1 for 1 randomised but they might stay with the 2 for 1 of the previous trial. I would anticipate 6-9 months for enrolment ...and a further 6-12 months to build a dataset...followed by a BLA submission.... Shareholders should note that ~Mesoblast knows that it will take approximately 12 months to certify and build up new manufacturing protocols and processes so everything is going according to schedule.
3) Which secondary endpoints will be chosen ?
What is so encouraging in this statement is a definitive restatement of some of the trials results....in particular : ” In a post hoc analysis in patients with an ischemic cause of heart failure, these effects of Revascor were even greater, as well as an observed significant increase in the ability to wean off device support, suggesting strengthening of the native heart muscle”
Remember , we are talking about Class IV , or end stage heart disease. Revascor is now proven, not just to stop the severe deterioration occurring but in many ischemic cases was observed to moderately improve the condition of the muscles in the left ventricle..... REMEMBER OUR DREAM PHASE III TRIAL FOR CHF , WHICH WILL SHORTLY CONCLUDE IS LARGELY POPULATED BY ISCHEMIC PATIENTS with Class II and III. For the reason stated above, I believe one of the most important secondary endpoints will be the ability to successfully wean ischemic patients of an LVAD device. Other secondary endpoints will no doubt relate to quality of life tests and have been correctly identified in ecoool2’s post.
4) LABEL EXTENSION OPPORTUNITIES The real elephant in the room is not the LVAD opportunity, which is extremely valuable niche in itself ...but the opportunity to use this therapy in bypass surgery. In the US there are about 200,000 procedures performed each year...with more than 30% of patients presenting as high risk and have predicted morbidity and mortality rates greater than 80%. You can obviously more than treble that number worldwide. Most of the high risk patient group are likely to be ischemic patients suffering from coronary heart disease.
5) cGVHD (Chronic) The market for Chronic as opposed to Acute is potentially larger for Mesoblast. This is because this condition is suffered even by related and “matched’ donors. The survival rates and incidence ratios ( the median time from transplant to diagnosis is typically 0.49years).
There have already been publications in both the US and Japan about the use of mesenchymal cells for treatment of chronic CGVHD and Joanne Kurtzberg’s trial should hopefully be definitive confirmation that Remestemcel-L has the greatest efficacy...particularly with regards to the safety profile. I doubt that an acknowledged world expert like Joanne Kurtzberg would be undertaking an Investigator Initiated trial without having experimented herself already.
6) Epistaxis. Interestingly epistaxis (nose bleeds) was added to the list of mucosal bleeding events . This is because ischemic patients often have to stop anticoagulation when they experience epistaxis..which greatly increases the risk of thrombotic events. Even the nose bleeds themselves can have a major treatment cost...apparently in a recent trial , there were 5 patients which had to have major blood transfusions to stop the bleeding. The reason why these events occur maybe a further symptom of Arteriovenous Malformations caused by vascular remodelling. Angiopoetin2 when combined with Endothelial Growth Factor promotes neo vascularisation.....
Revascor in Patients with moderate to Advanced Heart Failure.
We are now informed that the trial has accrued and validated approximately 90% of its required target of primary endpoints. It is expected that all required primary endpoint events will be accrued and validated by the end of CY 2019.
At first looks this suggests a slower number of MACE events in the last 3 months. The sharp eyed among you will recall the June 24th 2019 disclosure from Mesoblast that in relation to Dream CHF : ”The trial has accrued approximately 85% of its required target of primary endpoint events”. On the later occasion the word “validated” was not used.
The Company has already mentioned that they expect to see a “J Curve” in MACE so why has the number only increased by 5% in the last 3 months ? ( Suggesting a run rate of 5% per quarter)... yet the trial is now confidently predicted to “conclude and be validated by the end of the CY 2019 !!!
The answer lies in the way the information is collated. As part of the scrupulous independent oversight of the trial , i now understand that an independent committee at Harvard Medical School , examines all clinical data which is sent to them in batches every two months by the Data Monitoring Controller so that the cause of death can be further verified. This would be supplementary to normal procedures followed as part of issuing Death Certificates which are promptly registered by the hospital . This means that the 90% number we have just been informed of, could be lagging up to 1-3 months behind the current total ! The fact that we are now forecast to have all results evaluated with the next 4 months suggests in my opinion that between 94-98% of MACE events may have already occurred....but without knowing the number in the backlog this is just a well informed guess. Hopefully some further granularity will be given on the next investor call.
Lastly, before the more impatient among you express frustration at a confirmatory trial ...even though we are on the home straight ...I should remind investors that the potential label expansion opportunities grow ever bigger...firstly EB, then HIE and now cGVHD. Combine these with significant obvious opportunities for use “off label” in the US for treatment of adults with gut, liver or multi organ srGVHD and it is fair to conclude that some analysts are way behind the curve on estimating potential commercialisation revenues from Remestemcel. To add insult to injury, many use high discount rates to compound the diminution of value. Let’s remember that Temcell is regular first line treatment for adult srGVHD in Japan ! The minutes from the FDA further validate Mesoblasts proposition that the dramatic decline in the share price following the release of the LVAD Phase IIB trial results was a failure of the Company and the analysts community to correctly explain its outcome. I believe that the current market capitalisation of Mesoblast can easily be justified by prospects for US srGVHD and known label extension initiatives on their own ( assuming a successful BLA filing in the next month or so ). Having said this, many people may first want reassurance that the Company will address the funding shortfall of $40m ? required by Q2 2020. This is the amount I broadly estimate will need to be found to allow the Company to reach positive cash flow ( based on current known clinical programmes). Based on its previous track record, the Company presumably has a number of non dilutive ways of raising this capital ( a royalty deal for srGVHD in Europe being the most obvious ) ...just try to be on board when the funding hurdle is cleared !
Lastly, if I may dream. Within the next 1- 10 weeks? I suggest the number of MACE events will need to have been reached to allow time for independent verification process to be concluded by the end of calendar 2019 . Remember, we were previously given guidance of CAL Q1 2020. When this happens there will no need to wait for further MACE before sending the clinical data as a batch. The DMC and the FDA will then presumably have no substantive reason to stop the unblinding of the trial...(even if a strict NDA is required from prospective partners before results are officially known.) A positive result will transform Mesoblast. It will take less than 24 hours to see certain headline numbers. IF , there is a significant difference in mortality events compared to the control group , I believe that a further confirmatory trial is unlikely to be required by the FDA before marketing approval.
Please take your time to reread that last sentence . It is of crucial importance. Good luck all. OP
MSB Price at posting:
$1.44 Sentiment: Buy Disclosure: Held
(20min delay)