In an April 9 research note, H.C. Wainwright & Co. analyst Swayampakula Ramakanth reported that Mesoblast Ltd. (MESO:NASDAQ; MSB:ASX) intends to evaluate Ryoncil (remestemcel-L) as a treatment for COVID-19-caused acute respiratory distress syndrome (ARDS).
As such, in collaboration with the Cardiothoracic Surgical Trials Network, Mesoblast will launch a randomized, placebo-controlled Phase 2/3 trial of its allogeneic mesenchymal stem cell product. The study will involve 240 COVID-19 patients with ARDS and will be carried out at more than 20 U.S. centers. The trial's primary endpoint will be the mortality rate at 28 days.
Initial data from the study are expected within months. If the results are positive then Mesoblast might be able to get Ryoncil fast tracked for label expansion, Ramakanth pointed out. Currently, Ryoncil is under priority review by the U.S. Food and Drug Administration for the treatment of steroid-refractory acute graft versus host disease in children. The associated PDUFA date is Sept. 30, 2020.
"We are encouraged by the news and believe the strong clinical data that Ryoncil generated to date provide a solid rationale for evaluating Ryoncil in COVID-19 patients with ARDS," Ramakanth commented.
For instance, Ryoncil significantly improved respiratory function in patients with chronic obstructive pulmonary disease who had the elevated inflammation seen in COVID-19 patients with ARDS. This result was from a randomized, placebo-controlled study of 60 patients. Also, Ryoncil has been shown to have a positive safety profile in 1,100-plus patients .
H.C. Wainwright projects that Ryoncil will generate $150 million in risk-adjusted U.S. revenues by 2030. The financial institution has a Buy rating and a 12-month price target of $14 per share on Mesoblast, the current share price of which is $7.40.[NLINSERT]
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Disclosures from H.C. Wainwright & Co., Mesoblast Ltd., First Take, April 9, 2020
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Swayampakula Ramakanth, Ph.D., Arthur He, Ph.D., Sean Lee and Sean Kang, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of Mesoblast Limited (including, without limitation, any option, right, warrant, future, long or short position).
As of March 31, 2020 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Mesoblast Limited.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from Mesoblast Limited for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in Mesoblast Limited as of the date of this research report.