Partnerships vs FDA

A lot of investors still seem hoping for an EUA in C-19 ARDS, whilst even the company was not optimistic enough to encourage that hope. CHF, the company will meet with the FDA to discuss a potential pathway to approval on the basis of the results on the MACE. But even if the primary endpoint had been met FDA approval was always likely to involve a further (partnered?) trial for FDA approval be it conditional or otherwise. GVHD we may yet gain FDA approval (with a conditional RCT) via an accelerated BLA. CLBP may yet prove successful, but not necessarily mean automatic FDA approval, but will certainly help in that end.

Whilst ultimately FDA approval is crucial, partnerships are the real underlying driver of commerciality in most young bio-tech companies. Fate Therapeutics, another US stem-cell company announced a $100 million up front equity and $3 billion in milestone payments with Johnson and Johnson. Fate has had no regulatory approvals, some recent trial success admittedly, but risen from $20 to nearly $120 since the April 2020 announcement of the partnership.

Conversely another Australian stem-call company that gained FDA approval in one of its ancillary products (a collagen scaffold) last week has risen from $0.46 to a paltry $0.505 as of today. Whilst it has a Johnson and Johnson trial in progress it has no formal partnership in place. FDA approval is not always the share price driver.

Partnerships are more commonly the real drivers of pre-commercial bio-tech share price and MSB has three existing small partnerships of course and hopefully a fourth large one with Novartis. If another partnership is announced in CHF, MSB irrespective of requiring more trials, could have a very prosperous future despite recent mitigated setbacks. We know the products have potential. They have been unlucky with the FDA in an unprecedented over-turn of a positive advisory vote and the application/design of two trials. Big Pharma will be looking at MSB very intently.