MSB Trading - 2020, page-7105

The BLA submitted to the FDA is for pediatric aGHVD using Ryoncil. In the extended access program and the clinical trial, the majority of those treated for pediatric aGVHD are in around a dozen hospitals in the US. Those dozen hospitals make up the bulk of all children treated for aGVHD in the whole of the US. Mesoblast have a strong relationship with all of these practitioners through earlier programs and trials, and assembling a sales force for a dozen hospitals is relatively cheap/easy. As such, no need for a partner to market/distribute and pay them around 70-80% of the proceeds for very little benefit.

Adult aGVHD could be a label extension to the pediatric approval should it succeed in a few months. Adult aGVHD patients are dotted around the whole of America, and to tap into that market Mesoblast will need a partner with an established marketing and sales force that can reach the majority of the market. It would be too big an operation for Mesoblast to do it themself, and it probably not very cost effective.

In general a partner provides these main benefits:
1. they will pay you an upfront payment for the privilege.. and also milestone payments in the tens if not hundreds of millions of dollars should your product meet sales milestones;
2. they will help you with the red tape and depending on what stage you are in your trials, they will usually pay for the cost of your trial;
3. they will utilise their marketing department to promote/educate customers on your product nationally;
4. they will be your distributor and utilise their sales force nationally to reach all your customers.

For this, they will get the lion's share of the revenue generated .. because without them you have no distribution channel. Depending on where you are in your product development, you may have to give up to 95% of your future revenue if you are in phase 1 or 2 and engage a partner... and the further you are into the process, the higher the share you get to keep.