Mesoblast: the biotech that hasn’t - yet
Mesoblast investors are used to trying to read the tea leaves ahead of a major announcement. August 2 – the deadline the US Food and Drug Administration had given to rule on its latest application – proved to be no different.
Ahead of the response about approving stem cell-based injectable treatment for acute-graft versus host disease in children, investors were trawling LinkedIn for clues.
For its supporters, FDA approval would be the ultimate retort: a way to prove the sceptics wrong and, at the same time, push new medical boundaries. Gabriele Charlotte
Word had whipped around that seven new job ads for Ryoncil Centre of Excellence managers across the US had been posted, just before the Australian market opened and Mesoblast shares entered a trading halt.
Was it a signal that this company-making approval was – finally – in the bag?
Ryoncil is the commercial name for a product aimed at treating children battling severe immune responses after bone marrow transplants. The drug was knocked back once before in October 2020 in a surprise decision, where the FDA went against a panel recommendation.
This time, the tea leaves were read wrong, again.
Mesoblast updated the market on Friday morning at 10am AEST, revealing the FDA hadn’t granted approval. Instead, the company must conduct an adult trial before the product is approved for children.
The value of Mesoblast was slashed 57 per cent on Friday to 47¢.
Since listing in December 2004, Mesoblast has come to represent far more in the local market than simply a rare and extremely volatile listed biotech. It’s become a symbol of a cash-burning, drawn-out journey and a constant reminder that local institutional investors don’t like the risk associated with biotech.
“It was a
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