The Mesoblast Limited (ASX: MSB) share price could soar today on news from the US FDA.
What happened?
Mesoblast said that the United States Food and Drug Administration (FDA) has granted ‘Fast Track’ designation for remestemcel-L for the treatment of acute respiratory distress syndrome (ARDS) due to COVID-19. It recently signed an agreement with Novartis regarding this.
The biotech business explained that fast track designation is granted if a therapy demonstrates the potential to address unmet medical needs for a serious or life-threatening disease. ARDS is the primary cause of death in patients of COVID-19.
Fast track designation by the FDA is intended to facilitate development and expedite the review of therapies to treat serious and life-threatening conditions with no or limited treatment options so that an approved product can reach the market expeditiously. Under this designation, a biological license application (BLA) for remestemcel-L is eligible for both rolling submission and priority review.
One of the things Mesoblast used to support its case was a steady at New York’s Mt Sinai Hospital in March and April this year. In that study, nine of 12 ventilator dependent patients (75%) with moderate to severe COVID-19 ARDS were successfully discharged from a hospital an average of 10 days after receiving two intravenous doses of remestemcel-L.
Mesoblast also updated the market that the ongoing randomised phase 3 trial of remestemcel-L in up to 300 ventilator-dependent patients with moderate to severe COVID-19 ARDS is approximately two-thirds enrolled. This trial’s endpoint is overall mortality at day 30, and the key secondary endpoint is days alive off ventilatory support through day 60. The recommendation by the Data Safety Monitoring Board, is to continue this trial as planned. A third and final interim analysis is planned to be performed by the DSMB when 180 patients have completed 30 days of follow-up.
Summary thoughts
No bad news is good news for Mesoblast. It remains a higher-risk idea because there’s no guarantee that it’s going to be approved. But there is more than one route for Mesoblast to making good shareholder returns from here, it doesn’t need the COVID-19 treatment to be approved – there’s still the original thesis and potential uses for remestemcel-L.
I wouldn’t be surprised to see the Mesoblast share price go up today. But there are other ASX growth shares I’d much rather buy with a simpler path to growth such as Pushpay Holdings Ltd (ASX: PPH).
