@Pledge. The XBI is imploding…if you haven’t yet noticed the breath of the sell off it is pretty indiscriminate. The latter index has halved in the last seven months. There are plenty of small cap stocks who have not disappointed this year who still find themselves approaching 12-24 month lows . Biotech suffered badly from a perception that Biden would squeeze mature industry margins and that Covid would badly hurt the execution risk with clinical trials and subsequent guidance from scheduled meetings to get approvals. In the last few weeks we appear to be also caught up in a general “risk off” trade targeting highly speculative stocks relative to rising treasury yields. . Fortunately many mature pharmaceutical companies have excellent balance sheets and a urgent need to replace earnings from drugs nearing the end of their productive life. A bid last week for Zogenics shows the better companies will be picked off. As industry moves to take advantage of market apathy ..I would expect to see M&A pick up further. The biologics sector in particular seems to be getting a very cautious response as the FDA are only just coming to accept even autologous therapies. Companies like Bluebird, Prevention Bio etc., have also been given short shift on comparability studies.
So how does the above impact Mesoblast specifically ?
My take is that the FDA wanted to link potency with subsequent activity to help nail down method of action. Mesoblast had historically relied on inflammatory cytokine markers like TNF alpha , but have now needed to undertake testing on a new potency measure which is more to the FDAs liking. I suspect that there were minor variations in batch of batch consistency which could be tightened up.. but the FDA are complete hypocrites in previously allowing single arms studies for approval in adult and Chronic GVHD…..allowing this orphan indication to remain without an approved treatment is, in my opinion , a dereliction of their duty. All this has caused a delay..one that I believe that is about 6-8 weeks away from tangible signs of resolution. If I am right MSB will file a BLA around the end of March for acute steroid refractory paediatric GVHD. Whilst I think some of the FDAs concerns on consistency, potency reproducibility and MOA are logical , they should in my opinion, have approved Ryoncil subject to a confirmatory trial. As recent research has highlighted using ST2 bio markers, Ryoncil was shown to be SIX TIMES more efficacious in treating severe grades than alternative best standard of care. With any luck we should be also be able to look for even higher levels of reimbursement post these findings…possibly over $450k-500K per paediatric patient cost . All to often competitors do a great job “healing” patients with relatively low mortality risk …in some case having the cheek to include Grade 1 patients which were not even part of the statistical analysis plan..AND THE FDA HAVE THE CHEEK TO LECTURE US ON COMPARABILITY! . I think the FDA are probably relieved that Mesoblast has stayed the course and worked through the issues raised …because they are dealing with a therapy with negligible adverse effects unlike the high toxicity treatments which are the only treatment options they have previously approved. It is a total disgrace but I think we are now in a position to move forward.
Every day I read total misinformation on these message boards regarding the merits of MSCs. The FDAs response to our first phase three trial for chronic lower back pain looks very encouraging and I feel extremely confident that there will shortly be alternativefinancing avenues available to the Company to provide working capital without returning to shareholders for additional funds. Don’t believe me…look at Cytokinetics who were abandoned at the altar by their long term partner Amgen after only a modest phase 3 clinical improvement in HFrEF …but have secured significant new funding from Royalty Pharma. Now look at their MACE results from their Phase 3 trial and realise that they are pathetic compared to the majority of those achieved by Rexlemestrocel. The DREAM CHF trial had a flawed primary endpoint but in virtually all other respects it was a triumph.
Following the close relationship fostered with the NIH, who funded both the LVAD and first Covid ARDS clinical trials , I am hopeful that Mesoblast might well be able to move forward with them shortly on a further 90 day primary endpoint trial ..which may allow them to pursue an EUA application for Covid ARDS after. What we need now is clearer timeline guidance from the company and a deal with respected third party to set the validation markers that institutions rely on before investing money in the stock. So the market madness continues…just as it did for the oil sector when WTI futures prices for Cushing delivery temporarily reached a negative level ! I invested in an oil stock last year where everyone laughed at me …it is now up 800%…it was one of the most shorted in the market at the time. So I am used to calling out the nonsense. OP
Please do not rely on the facts or opinions expressed in the above post when making an investment decision.
MSB Price at posting:
$1.17 Sentiment: Buy Disclosure: Held
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