William Blair Initiates Mesoblast Soon After Its Lead Product Goes Under FDA Review In Pediatric Indication

  • William Blair has initiated coverage on Mesoblast Ltd MESO with an Outperform rating and a price target of $8.
  • Mesoblast's lead product, remestemcel-L, has shown transformative efficacy in pediatric steroid-refractory (SR) acute graft-versus-host disease (aGvHD), where no approved therapies exist for children under the age of 12. 
  • In a Phase 3 trial, 69% of pediatric SR-aGvHD patients treated with remestemcel-L were alive at day 180, and 51% were alive two years after treatment vs. 49% and 35%, respectively, in the natural history study.
  • The analyst notes that the total addressable market for SR-aGvHD is limited. Still, it views it as a foundational program for the company that, if approved, could de-risk its platform and manufacturing. 
  • In contrast, the U.S.'s socioeconomic impact of chronic lower back pain (CLBP), including direct and indirect costs, is estimated to be over $100 billion annually. 
  • If successful, even in a subset of the discogenic CLPB population, the company's discogenic CLBP program could be transformational for Mesoblast. 
  • The analyst also notes encouraging data in chronic heart failure with reduced ejection fraction and acute respiratory distress syndrome.
  • William Blair writes that the continued development of these programs via an industry partnership could provide additional value to Mesoblast.
  • Wednesday, the FDA agreed to review the company's remestemcel-L, on a priority basis, more than two years after first rejecting it.
  • The product is under priority review for children suffering from SR-aGVHD.
  • Price Action: MESO shares are down 3.60% at $3.62 on the last check Thursday.
  • Photo Via Company
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