Mesoblast Shares Tumble As FDA Strikes Out Cell Therapy Application For Children Again, Requires Additional Trial

The FDA issued a complete response letter to Mesoblast Limited's MESO resubmission for remestemcel-L for pediatric steroid-refractory acute graft versus host disease (SR-aGVHD).

The agency said it requires more data, and Mesoblast will conduct a targeted, controlled study in the highest-risk adults with the greatest mortality. 

Mesoblast intends to enroll adult patients at the highest mortality risk with SR-aGVHD where existing therapy has not improved outcomes and 90-day survival remains as low as 20-30%.

Mesoblast has generated pilot data through its emergency IND program in adults showing a survival benefit with remestemcel-L in this target population. 

Before resubmission, the FDA guided Mesoblast to resolve outstanding chemistry, manufacturing, and control issues before initiating additional clinical trials. 

FDA completed the Pre-License Inspection of the manufacturing facility, did not issue any Form 483, and found no objectionable conditions. 

In addition, FDA acknowledged in the resubmission review that the changes implemented appear to improve assay performance relative to the original version of the assay used in the pediatric Phase 3 trial.

Mesoblast met the pre-specified primary endpoint, prospectively agreed with the FDA, of a single-arm Phase 3 trial in 54 children with SR-aGvHD. 

While the Oncologic Drugs Advisory Committee of the FDA in August 2020 voted 9:1 in favor of remestemcel-L's efficacy in a pediatric patient population, in September 2020, FDA recommended further steps be undertaken to obtain approval. 

The BLA resubmission of January 2023 included long-term follow-up data from the Phase 3 trial by the Center for International Blood and Marrow Transplant Research, showing 50% survival through more than four years of follow-up for remestemcel-L treated patients.

William Blair analysts Sami Corwin and Brooke Schuster had high conviction on the approval of remestemcel-L. 

The analysts downgraded the stock to Market Perform, citing a lack of clarity regarding the path forward for remestemcel-L.

The company can align with the FDA regarding a trial design and initiate it on time. But it remains unclear how long the trial could take, how it will be adequately controlled, what the primary endpoint will be, or if it can be completed with the company's current resources.

Price Action: MESO shares are down 62.70% at $1.49 during the premarket session on the last check Friday.