Shares of Mesoblast Limited MESO have soared 80% in one month following the FDA approval of remestemcel-L as the only approved therapy for steroid-refractory acute graft versus host disease (SR-aGVHD) in children aged two months and older, including adolescents and teenagers. The drug has a novel mechanism of action and will be marketed under the brand name Ryoncil in the United States.
The approval gave Mesoblast its first approved product in its portfolio. Sales of the drug are expected to provide the company with a steady source of income. The company is currently gearing up to launch the product in the U.S. market.
SR-aGVHD is a devastating condition that has an extremely poor prognosis. Each year in the United States, around 10,000 patients, including 1,500 children, undergo allogeneic bone marrow transplants. About 50% develop aGvHD, and nearly half of these cases are steroid-resistant.
In the past six months, shares of Mesoblast have skyrocketed 202.9% against the industry’s 4.8% decline.
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The FDA approval was based on positive results from a phase III study of remestemcel-L in children with SR-aGvHD, 89% of whom had high-severity Grade C or Grade D disease. Among the patients treated with the drug, 70% achieved an overall response by Day 28, a measure that predicts survival in aGVHD.
Furthermore, no patient had their Ryoncil treatment discontinued or interrupted due to any laboratory abnormality, and more than 85% of patients completed the full course without interruption.
Mesoblast is also looking to expand Ryoncil’s label to include the treatment of adult patients with SR-aGVHD. A late-stage study is currently evaluating the drug in this patient population. Additionally, the company is also evaluating Ryoncil in a mid-stage study for certain inflammatory bowel disease indications: ulcerative colitis and Crohn’s colitis.
Other Clinical Programs in MESO’s Pipeline
Mesoblast has another late-stage pipeline candidate, rexlemestrocel-L, which is being developed for heart failure and chronic low back pain (CLBP).
In March 2024, MESO announced that the FDA supports an accelerated approval pathway for rexlemestrocel-L in patients with end-stage ischemic heart failure with reduced ejection fraction (HFrEF) and a left ventricular assist device. The company plans to hold a meeting with the FDA to discuss the next steps in filing for the candidate for the HFrEF indication in children and adults. A potential approval will further strengthen Mesoblast’s commercial portfolio and form another source of revenue generation.