Celgene ($CELG) has stepped up with a deal to buy a $45 million chunk of Mesoblast's stock at a premium price in exchange for a front row seat on the Australian biotech's stem cell pipeline and a preferred spot at the bargaining table if it follows up with a licensing deal.
The prolific dealmaker paid A$3.82 per share for 15.3 million shares of Mesoblast stock (ASX: MSB, USOTC: MBLTY), gaining in return the right-of-first-refusal on a group of stem cell programs that extends from acute graft-versus-host disease (GVHD), certain oncologic diseases, inflammatory bowel diseases, to organ transplant rejection.
Mesoblast's stock surged more than 20% on the news of the high-profile partnership.
Stem cell R&D experienced a huge surge of popularity in the first decade of the 21st century as companies sprang into existence to pursue a whole new approach to fixing what goes wrong with people. But after an initial flirtation, a better realization of just how long a road stem cell research has to travel triggered a major retrenchment. And that has influenced Mesoblast along with all the other biotechs in the field.
Eighteen months ago, Osiris ($OSIR) offloaded its mesenchymal stem cell platform and a product called Prochymal to Mesoblast, after Sanofi ($SNY) had walked away from a $1.25 billion collaboration that came with a $130 million upfront.
Celgene has struck a long lineup of biotech pacts in recent years, often willing to take the observer's chair as a company works to complete a crucial leg of the R&D journey. Mesoblast also has deals in place with Teva ($TEVA) and JCR Pharmaceuticals, which has Japanese rights to its mesenchymal stem cell technology. Just a couple of months ago Mesoblast released positive pediatric data from a study of steroid-resistant acute GVHD.
"Today's agreement provides an opportunity for Celgene to add to its leading cellular and regenerative medicine pipeline," noted Celgene COO Mark Alles in a statement.
- here's the release