What is driving Mesoblast limited (NASDAQ: MESO) stock

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Mesoblast limited (NASDAQ: MESO) stock rose 13.72% on Jan 20th, 2020 (Source: Google finance) after the company did a presentation for its commercial plans at the 2020 biotech show in San Francisco. The stock continued its momentum by rising  by over 3.2% on Jan 21st, 2020 (as of 12:08 pm GMT-5; Source: Google finance)   In the presentation, the company announced that, the FDA had agreed to the choice of Ryoncil as the commercial name for its allogenic cell therapy treatment of AGVHD (Acute Graft Versus Host Disease). AGVHD is a dangerous complication in bone marrow transplant. Its revenues from royalties will come from sales in Japan of TEMCELL (A closely related product for treating AGVHD).

Moreover, in January the company had planned to fill the first module of the rolling biologics license application for Ryoncil. It will then seek priority review by the FDA for BLA under the current fast track designation for its product candidate. If Ryoncil gets approved, it will be launched in the U.S market this year. Mesoblast and the International Center for Health Outcomes Innovation Research (InCHOIR) at the Icahn School of Medicine at Mount Sinai in New York have agreed on the protocol for a confirmatory Phase 3 trial of Revascor. The company has initiated confirmatory Phase 3 trial of Revascor for the reduction of mucosal bleeding in end-stage heart failure patients implanted with an LVAD with a target of last patient/last visit at the end of January 2020. The data read-out for this Phase 3 trial anticipated by mid-2020. The company has Planned the commercial launch in association with appropriate pharma partners in the US / EU / Japan, and in China through the Tasly partnership.

Additionally, in the Phase 3 trial of MPC-06-ID for chronic low back pain last patient last visit at 24-months of follow up will be in the first half of CY20, with the primary endpoint being a composite outcome of pain and function at 12 and 24 months. The company intends to obtain clearance in 2020 from European regulatory authorities to begin European Phase 3 trial. The results from the Phase 3 trials is expected to be considered pivotal to support regulatory approval in the US, as well as Europe through the Grünenthal partnership.

On the other hand, for the first quarter ending September 2019, the company’s loss reduced due to US$6.1 million reduction in R&D expenditure and US$5.4 million increase in milestone revenues from strategic partnerships and increased commercialization revenues from product sales in Japan. In addition, the company expects to receive US$15 million for an upfront milestone payment for the strategic partnership with Grünenthal GmbH in the first quarter FY2020.

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