What happened
Shares of Mesoblast (MESO 1.46%) were down more than 61% as of 2:15 p.m. on Friday. The pharmaceutical stock is down more than 54% so far this year.
So what
Mesoblast focuses on allogeneic cellular medicines to treat inflammatory diseases. On Friday, the company said that it had received a Complete Response Letter (CRL) from the Food and Drug Administration (FDA). The CRL is in response to Mesoblast's Biologics License Application (BLA) for Ryoncil (remestemcel-L) to treat pediatric steroid-refractory acute graft-versus-host disease (GVHD), and is requesting more data before the FDA grants marketing approval.
The CRL was actually on a resubmission by the company regarding its BLA after the FDA had earlier raised concerns. The company said it will conduct a controlled study among high-risk adults with GVHD to further test Ryoncil.
Now what
The CRL is a setback, but not necessarily a permanent one for Mesoblast. When the FDA initially raised issues in 2020 regarding Ryoncil, it asked Mesoblast to fix chemistry, manufacturing, and control issues. However, regarding Mesoblast's resubmission, while the FDA is requiring more data, it did not raise concerns about safety, the data, or the company's manufacturing process, Mesoblast said.
The company is scheduled to have a Type A meeting with the FDA in 45 days to discuss the design for the planned adult trial.
The biggest problem with the CRL is it will delay the drug's launch and other potential therapies the company is working on.
In the fiscal third quarter, ended March 31, the company said it only had $1.8 million in revenue from royalties for Temcell, a bone marrow-derived stem cell therapy to treat adults with acute GVHD. The product is sold in Japan by JCR Pharmaceuticals. Mesoblast only had $48.8 million in cash at the end of the quarter and reported a net loss of $18.6 million in the quarter.
