Mesoblast Limited price action activity in the market has received a boost on the company announcing it has started evaluating its anti-inflammatory cell therapy in the treatment of COVID-19 lung disease. The company has already opened discussions with the government and regulatory authorities as well as medical institutions and pharmaceutical companies as it moves to evaluate its allogeneic mesenchymal stem cell product remestemcel-L.
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COVID-19 Treatment Push
COVID-19 has taken a toll on older adults with the mortality rate in the age group currently standing at 50%. Current therapeutic interventions have struggled to improve in-hospital survival, thus calling for the development of better treatment options. Mesoblast Limited remestemcel-L has so far shown strong potential in the treatment of acute respiratory distress syndrome, which is the principal cause of death in COVID-19 infections.
Recent clinical studies conducted in China have so far shown that mesenchymal stem cells can improve functional outcomes in cases of severe COVID-19 pneumonia. Mesoblast Limited is currently conducting numerous clinical trials across several inflammatory conditions, including elderly patients with lung disease as well as adults and children.
Even as Mesoblast Limited ramps up its effort in the development of a potential treatment option for COVID-19, solid financial results continue to affirm the company’s long-term prospects. The company is fresh from reporting impressive half-year results that continue to affirm growth in key segments.
Revenue growth narrowing net loss
Revenues for the half-year ended December 31, 2019, rallied 43% to $19.2 million up from $13.5 million reported a year earlier. Conversely, the company registered a 73% increase in revenues from its TEMCELL HS by Mesoblast’s license that came in at $3.8 million. The company also registered a 36% increase in milestone revenues attributed to strategic partnerships that came in at $15 million.
Revenue growth lead to a reduction in net loss that fell 32% to $30.1 million from $44.1 million reported a year earlier. Net loss shrunk as the company registered a 22% decrease in research and development expenses that came in at $26.5 million.
Manufacturing expenses were also down by $1.9 million to $7.8 million due to a reduction of manufacturing activities related to the Biologics License application. However, management and administration expenses increased $1.5 million to $12.2 million.
Mesoblast Limited ended the year with $81.6 million in cash with the option of accessing an additional $62.5 million through existing financing facilities and strategic partnerships.
Some of the key milestones achieved include the filling of a Biologics License Application with the United States Food and Drug Administration. The application seeks approval for remestemcel-L. In addition, Mesoblast Limited is in the process of establishing a U.S commercial team as it seeks to launch its first allogeneic cellular product RYONCIL, in children.
The company continued to enjoy robust revenue growth in sales of TEMCELL in Japan even as it continues to set sights on the U.S market. The company has already inked an agreement with Lonza for the commercial manufacture of RYONCIL that will facilitate inventory build ahead of the planned U.S launch.