Mesoblast holds out hope for heart failure drug

Shares in stem cell biotech Mesoblast jumped nearly 16 per cent after the company said it would pursue approval for its key heart failure drug in the US despite a clinical trial delivering mixed results.

On Monday the company told investors that additional data from the phase 3 trial of its Revascor product showed a “substantial and durable reductions in heart attacks, strokes and cardiac deaths” in patients with chronic heart failure.

Mesoblast shares bounced after a tough end to 2020, when shares were savaged after news its COVID-19 trial was unsuccessful.
Mesoblast shares bounced after a tough end to 2020, when shares were savaged after news its COVID-19 trial was unsuccessful.

The company had trialled Revascor on 537 patients with advanced chronic heart failure and it showed a reduction in mortality rates for heart failure patients. However, last December Mesoblast revealed this trial was unsuccessful in meeting its main stated aim: showing the drug reduced the incidence of trips to hospital for non-fatal heart failure events.

On Monday, the company released updated data from this study to the ASX, arguing that despite missing its main goal in regards to hospitalisations, the research suggested the drug could help reduce deaths of patients where there are few other treatment options.


“Based on observed reduction in mortality and morbidity in this phase 3 trial, Mesoblast intends to meet with the FDA to discuss a potential approval pathway,” the company said.

The stock jumped nearly 16 per cent to $2.58 mid-afternoon. It closed out the session 14.3 per cent higher at $2.56. Despite Monday’s gains the company’s share price is 45 per cent lower than one month ago due to a series of disappointing announcements towards the end of 2020 including that it was cutting a trial for a COVID-19 treatment short because it was unlikely to meet its primary goal moderating severe respiratory distress caused by the virus.

Mesoblast will be negotiating with the US regulator on a number of fronts this year, with chief executive Silviu Itescu promising to fight to get the company’s flagship product, Ryoncil, approved for use against graft-versus-host disease in the US.

Ryoncil came close to receiving the regulator’s tick of approval last year before the FDA requested additional data be provided before the drug was approved.

“We have a further ability to take that up the ranks,” Mr Itescu said last year in regards to Ryoncil’s approval.

“What’s frustrating is we have done exactly what the FDA wanted.”

Analysts in the US and Australia have said they are waiting for more updates from the company at the start of 2021.

Analysts at US investment house Cantor Fitzgerald said last month the company’s heart failure drug Revascor could still prove a “blockbuster opportunity”, despite the data being mixed. However, they also pointed to a number of risks for the business, including the need for additional capital to fund operations and the regulatory rigour of the FDA.

“The FDA may deny approval or require additional studies for review if it does not believe
that the submission satisfactorily addresses the safety, efficacy, and manufacturability of
a drug candidate.”

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