Mesoblast Receives Clearance for Use of Stem Cell Therapy Product in Patients with COVID-19 ARDS

Apr 8, 2020 | Cell Therapy, Coronavirus, COVID-19, Investor Watch, News, Popular Posts, Regenerative Medicine, Stem Cell Therapy

Mesoblast Receives Clearance for Use of Stem Cell Therapy Product in Patients with COVID-19 ARDS

The U.S. Food and Drug Administration (FDA) approved an Investigational New Drug (IND) application from Mesoblast Limited (Nasdaq: MESO) to treat patients with acute respiratory distress syndrome (ARDS) caused by coronavirus infection (COVID-19) with intravenous infusions of its allogeneic mesenchymal stem cell (MSC) product candidate remestemcel-L. The cell therapy-based venture based its decision on evidence that the experimental regenerative therapy has had positive impact on ARDS in experimental settings. With COVID-19, the prognosis becomes dismal and hence the company is acting fast to determine if this stem cell therapy investigational product produces positive outcomes. The company will make this investigational product available under the FDA’s expanded access compassionate use and in clinical trials.

The FDA Cleared Mesoblast’s Investigational New Drug application—what does this mean?

This means that the FDA has approved the use of this stem cell-based treatment on patients with severe respiratory conditions resulting from COVID-19. This affords the biotech company an opportunity to treat severely endangered COVID-19 ARDS patients or/and plan randomized controlled trials using the stem cell-based therapy, which involves intravenous infusions of its allogeneic mesenchymal stem cell (MSC) product candidate (Remestemcel-L).

ARDS is a Potentially Deadly Condition Caused by COVID-19

Although most people who are infected with COVID-19 have no or mild symptoms, a subset of those afflicted by this novel coronavirus develop severe respiratory illness and may need to be admitted for intensive care. The impact of this more severe class of symptom can lead to a potentially fatal condition known as acute respiratory distress syndrome (ARDS). A type of respiratory failure, it is characterized by onset of widespread inflammation in the lungs. Symptoms include shortness of breath, rapid breathing and bluish skin coloration. For those who survive, a decreased quality of life is common.

What is Remestemcel-L?

With a trade name of RYONCIL, this investigational cell therapy-based treatment is being developed for various inflammatory conditions. It is an investigational therapy comprising culture-expanded mesenchymal stem cells derived from the bone marrow of an unrelated donor. It is administered to patients in series of intravenous infusions. The stem cell therapy is believed to have immunomodulatory properties to counteract the inflammatory processes that are implicated in steroid-refractory aGVHD by down-regulating the production of pro-inflammatory cytokines, increasing production of anti-inflammatory cytokines, and enabling recruitment of naturally occurring anti-inflammatory cells to involved tissues.

Its maker, Mesoblast, first started developing remestemecel-L for the treatment of acute graft versus host disease (aGVHD), a potentially life-threatening complication of an allogeneic bone marrow transplant (BMT). In fact, it has been touted by this company as “the first cellular therapy product for the treatment of graft-versus-host disease.” It is also being developed for other rare diseases.

By January 2020, Mesoblast filed a Biologics License Application (BLA) to the FDA for the product (trade name RYONCIL) for the treatment of children with steroid-refractory aGVHD.

The company touts the safety and therapeutic effects of remestemcel-L intravenous infusions as the treatment has been evaluated in over 1,100 patients in various clinical trials.

What is the Rational to Investigate Remestemcel-L in Patients with COVID-19 ARDS?

Remestemcel-L was successful in a Phase 3 clinical trial for steroid-refractory acute graft versus host disease (aGVHD) in children—a potentially fatal inflammatory condition due to a similar cytokine storm process as seen in COVID-19 ARDS. The company also completed a post-hoc analysis of a randomized, placebo-controlled study in 60 patients with chronic obstructive pulmonary disease demonstrated that remestemcel-L significantly improved respiratory function in patients with the same elevated inflammatory biomarkers that are also observed in patients with COVID-19 ARDS.

Who is Mesoblast?

Publicly traded (MESO or MSB on ASX), they position the firm as a “world leader in developing allogeneic (off-the-shelf) cellular medicines.” Mesoblast utilizes its proprietary mesenchymal lineage cell therapy technology platform in the pursuit of developing a portfolio of commercial products and late-stage product candidates. They tout a proprietary manufacturing process affording them industrial-scale, cryopreserved, off-the-shelf, cellular medicines. Does Mesoblast represent the “industrial revolution” for stem cell therapy?


According to the company, they target four therapeutic areas, including 1) Pediatric & Adult Rare Diseases, 2) Cardiovascular, 3) Pain, and 4) Inflammatory. Their lead product candidate, RYONCIL, was submitted to the FDA for BLA registration for acute GVHD. The rest of their pipeline can be seen here

Business & Finance

Founded in 2004 in Australia by Silviu Itescu, their business picture isn’t that pretty. After going public, their share price has evidenced volatility. With a share price of $5.59 and a market capitalization of $497 million they project a net income loss of about $75 million, according to Yahoo Finance. According to their Annual Report, they have accumulated a deficit of $470 million since inception. Although they have about $81.3 million cash in hand, they have little breathing room as in 2019 they operated on net cash flow loss basis of -$57.7 million.

Moreover, they haven’t been in a position to simply raise more capital from the public. Rather, they have had to resort to securing lines of credit from lenders including Hercules Capital, Inc. and NovaQuest Capital Management, LLC.  Borrowing money can limit the company’s ability to respond to market opportunity as often times loans include restrictive terms. By March 2018, they had to borrow $75 million from Hercules on four-year term. They entered into an additional loan and security agreement with NovaQuest for a $40 million non-dilutive, eight-year credit facility, repayable from net sales of remestemcel-L in pediatric patients with steroid refractory acute graft versus host disease in the U.S. and other territory except interestingly, Asia.

One of their largest institutional shareholders is a UK asset management fund called M&G Investment Management Ltd. holding nearly 11 million shares.


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