Stem cell treatments business Mesoblast has managed to boost revenues more than 90 per cent over the past year, with the company looking towards September as a critical month of news that will determine the future of its flagship products.
Chief executive Dr Silviu Itescu said the company was eyeing long-term applications for its treatments including possibly targeting 200,000 patients in the US experiencing respiratory distress each year. The company is investigating the use of its products for COVID-19 patients with the belief the impacts of coronavirus on global healthcare systems will be felt for the long term.
“The next few months are certainly going to be transformational for the company”: Dr Silviu Itescu, chief executive of stem cell company Mesoblast.Credit:Josh Robenstone
“I think everyone is seeing it that way that COVID will always be there with us. It’s [about] how much we are in control of it,” he said.
The $3 billion biotech revealed revenues of $US32.2 million ($44.5 million) for 2020, a 92 per cent improvement on 2019’s numbers. This was largely driven by royalty and milestone payments to the company from its strategic partnerships with other biotechs.
The business managed to trim its losses 13 per cent, though is still operating at a net loss of $US77.9 million. Mesoblast spent $US56 million on research and development, which was a $US8.6 million reduction on the previous year.
Mesoblast shares gained 2.3 per cent to sit at $5.30 at midday.
Mesoblast’s flagship product is remestemcel-L, which it hopes to soon launch into the US market for treatment of acute graft-versus-host disease in children. Earlier this month it secured a major win when an FDA advisory committee voted in favour of the treatment, branded as Ryoncil, as effective in treating the disease.
Chief executive Dr Silviu Itescu said the FDA has set an action date of September 30 to make a final call on the product and if approved the business has put manufacturing in place to launch almost immediately.
“The next few months are certainly going to be transformational for the company,” Dr Itescu said on a call to analysts on Thursday morning.
The company is also trialling the same product for treatment of acute respiratory distress for COVID-19 and is currently running a phase 3 trial in the United States.
Dr Itescu said the launch of a COVID-19 treatment was a key focus moving forward, with initial read-outs of the phase 3 data expected to begin in the first weeks of September.
“Its a very important focus for the company, as it should be throughout this dreadful pandemic,” he said.
Mesoblast has spent a significant amount of 2020 working on scaling up manufacturing capabilities in preparation for these two projects being approved. It has inked a commercial supply agreement with multinational biotech Lonza and is looking to scale this up.
The company has seen volatile share price movements in recent weeks after the company has given updates, including losing 30 per cent in a single session earlier this month. Long-time backer Thorney Investment Groups chairman Alex Waislitz has said the company requires a long term view.
“Theyre dealing with very big markets if they can get those approvals,” he said.
Last week Bell Potter lifted its target price for the stock to $7.30, with analysts saying they expect the company’s Ryoncil product will get final approval for use in graft-versus-host disease.
There are still a number of hurdles ahead before the COVID-19 treatment could be approved, however Mesoblast’s phase 3 study is set to cover 300 patients and recruitment is not expected to complete until the fourth quarter of this calendar year.
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Emma reports on healthcare companies for The Age and Sydney Morning Herald. She is based in Melbourne.