Mesoblast Enters Global Collaboration for Development, Manufacture and Commercialization of Remestemcel-L

Initial Focus on Acute Respiratory Distress Syndrome, including COVID-19

NEW YORK, Nov. 19, 2020 (GLOBE NEWSWIRE) -- Mesoblast Limited (Nasdaq:MESO; ASX:MSB), today announced that it has entered into an exclusive worldwide license and collaboration agreement with Novartis for the development, manufacture and commercialization of Mesoblast’s mesenchymal stromal cell (MSC) product remestemcel-L, with an initial focus on the development of the treatment of acute respiratory distress syndrome (ARDS), including that associated with COVID-19.

Mesoblast Chief Executive Dr Silviu Itescu stated: “Our collaboration with Novartis will help ensure that remestemcel-L could become available to the many patients suffering from ARDS, the principal cause of mortality in COVID-19 infection. This agreement is in line with our corporate strategy to collaborate and partner with world-leading major pharma companies in order to maximize market access for our innovative cellular medicines.”

The demonstrated ability of Novartis to rapidly move from clinical to commercial scale with cell-based therapies will play a role in the successful development and potential commercialization of remestemcel-L, as will the nearly two decades of experience Novartis has in delivering first-in-class products that address areas of unmet respiratory need.

ARDS is an area of significant unmet need, with a high mortality rate despite current standard of care, which includes prolonged ICU treatment and mechanical ventilation. As the potential first ARDS therapy, remestemcel-L will be evaluated to treat this deadly condition and improve outcomes. Remestemcel-L is currently being studied in COVID-19-related ARDS in an ongoing 300-patient Phase 3 study, where even with maximal existing therapies, mortality is estimated to be even higher. Novartis intends to initiate a Phase 3 study in non-COVID-19-related ARDS after the anticipated closing of the license agreement and successful completion and outcome of the current study.

Key transaction terms:

• Novartis will make a US$50 million upfront payment including US$25 million in equity.
   
• From the initiation of a Phase 3 trial in all-cause ARDS, Novartis will fully fund global clinical development for all-cause ARDS and potentially other respiratory indications. 
   
• Mesoblast may receive a total of US$505 million pending achievement of pre-commercialization milestones for ARDS indications.
   
• Mesoblast may receive additional payments post-commercialization of up to US$750 million based on achieving certain sales milestones and tiered double-digit royalties on product sales.