What happened
Shares of Mesoblast (MESO 1.46%) were down by more than 15% as of 11:45 a.m. ET on Monday, just days after the healthcare stock plunged more than 61% on bad news regarding one of its lead therapy candidates.
So what
Mesoblast is a pharmaceutical company that uses allogeneic cellular medicines, derived from the bone marrows of healthy donors, to treat complex inflammatory diseases. Apparently, not all investors got the memo on Friday and continued to react negatively to the news that the Food and Drug Administration (FDA) had issued a Complete Response Letter (CRL) to Mesoblast regarding its resubmission of it Biologics License Application for remestemcel-L. The BLA was as a treatment for pediatric steroid-refractory acute graft versus host disease (SR-aGVHD).
The FDA is asking for more data before granting marketing approval for the therapy. Mesoblast said it will do a controlled study of the therapy on the highest-risk adults with SR-aGVHD. Current therapies give patients who contract SR-aGVHD after organ transplants a 90-day survival rate as low as 20% to 30%.
Now what
Monday's continued fall probably has more to do with investors reacting to several analysts' downgrades of the stock. On Monday, Maxim Group changed its position on Mesoblast from buy to hold, joining several analysts who downgraded their positions on the stock on Friday.
It's also worth noting that the company's pipeline isn't just dependent on remestemcel-L to treat various indications. Mesoblast has two other late-stage therapies: Revascor to treat advanced chronic heart failure and MPC-06-ID for chronic low back pain due to degenerative disc disease.
However, the company's continued difficulty in commercializing its products will likely continue to drag its shares down, especially since it isn't profitable. As of the 2023 fiscal third quarter, it reported it had $88.8 million in cash and had lost $18.6 million.
