Australian biotech Mesoblast has been riding high on expectations for its COVID-19 treatment, licensed to Novartis, but fell back to Earth after it said a phase 3 trial of the cell therapy was a bust.
Shares in the stem cell specialist on the ASX lost more than a third of their value after data experts said the study of remestemcel-L in ventilator-dependent patients with moderate to severe acute respiratory distress syndrome (ARDS) due to COVID-19 was unlikely to show a benefit.
Mesoblast said the trial could have been affected by improvements in the care of COVID-19 patients over the last few months, as doctors gathered experience in treating the disease. That included the use of experimental drugs like dexamethasone and Gilead’s antiviral Veklury (remdesivir).
The company has suggested the severity of COVID-19 in recruited patients tended to get worse as the study progressed, which could also have skewed the result.
The disappointment comes less than a month after Novartis put down $50 million upfront for global rights to remestemcel-L in COVID-19, reinvigorating a project that had been hit by FDA rejection as a treatment for children with steroid-resistant graft-versus-host disease just a few weeks earlier.
The deal—which still hasn’t passed through regulatory reviews—also included $505 million in development milestones and $750 million in sales milestones, plus tiered double-digit royalties. Analysts at Edison previously said peak sales of the therapy could reach $1.7 billion if approved.
The COVID-19 trial was testing the cell therapy to see whether it could help patient with ARDS, a complication of severe SARS-CoV-2 infection, and had data on 180 out of 223 recruited patients by the time the expert committee delivered its assessment.
While there were no safety concerns, the panel said remestemcel-L was unlikely to meet the 43% death rate reduction objective at 30 days when the planned enrollment of 300 patients was completed.
Earlier this month, the FDA granted fast-track status to remestemcel-L for ARDS caused by COVID-19, the primary cause of death among people with the infection.
For now, there are no results on secondary measures in the study, which included days alive off mechanical ventilation at 60 days, overall survival, days in intensive care, duration of hospitalization and measures of organ damage.
There’s still a chance that remestemcel-L could show a benefit on some of these other endpoints, said Mesoblast in a statement. Alongside Novartis, it will keep following up the patient cohort through 60 days to explore that further.
The remestemcel-L disappointment comes shortly after Mesoblast reported that its cell therapy for heart failure Revascor (rexlemestrocel-L) missed the primary endpoint of the DREAM HF-1 phase 3 trial.
The therapy did, however, improve secondary measures including cardiac death and the incidence of heart attacks or strokes, and Mesoblast has said it thinks the data support a route to FDA approval for the therapy.