Mesoblast limited (NASDAQ: MESO) stock plunged 19.66% on 15th December, 2020 (as of 6:56 pm GMT-5; Source: Google finance) after the company missed the mark in a phase three trial for chronic heart failure but may have found a new path for its stem cell treatment.
The company was evaluating its cell therapy through trial, rexlemestrocel-L (also known as Revascor), as an add on treatment to the standard of care for the reduction of reoccurring non-fatal heart failure in 537 patients. The company was doing trial from over the past 30 months & had been collecting follow-up data. However, the results revealed there was no reduction in the recurring non-fatal decompensated heart failure events, which was the main point of the trial. The decompensated heart failure is when the person’s heart can not eject or accommodate blood within the physiological pressure levels. But, there is also a positive outcome of this trial. The company found in the trial that patients who received both Revascor and maximal therapies had a 60 per cent reduction in the occurrence of heart attacks and strokes and 60 per cent reduction in death from heart causes when treated at an early stage. The data from the trial means Revascor reduces mortality with existing drugs that reduce hospitalisation rates, but does not significantly impact cardiac mortality.
Further, the company expects the mortality benefit found in the phase three trial will underpin a potential path for Revascor to be approved in patients with advanced chronic heart failure. The company is planning to meet and discuss the results with the United States Food and Drug Administration.
On the other hand, the company for the first nine months FY2020 compared to the first nine months FY2019, the company has reported 113% rise in total revenue to US$31.5m from US$14.8m, 81% growth in commercialization revenue from sales of TEMCELL to US$5.9m from US$3.3m, 127% rise in milestone revenues from strategic partnerships to US$25.0m from US$11.0m, 34% (US$23.7m) reduction in loss after tax and 15% (US$7.5m) decrease in R&D spend. On year on year basis, for the third quarter, the company has reported 10-fold increase in total revenue to US$12.2m from US$1.2m and 99% growth in commercialization revenue from sales of TEMCELL to US$2.1m. The company had cash on hand at March 31, 2020 was US$60.1m. The pro forma cash on hand is approximately US$150m, after an additional US$90m capital raised in May 2020.