Novartis licenses phase 3 COVID-19 cell therapy from Mesoblast

Novartis CEO Vas Narasimhan 2019
Novartis CEO Vas Narasimhan, M.D. (Novartis)

Novartis has secured a global license to Mesoblast’s cell therapy remestemcel-L in the treatment of COVID-19. The deal lands Mesoblast $50 million upfront and the support of a partner that could help address critical quality attribute concerns raised by the FDA.

Last month, the FDA rejected a filing for approval of the cell therapy in children with steroid-resistant graft-versus-host disease (GvHD). By then, Mesoblast had already begun testing the allogeneic cell therapy in COVID-19 patients with acute respiratory distress syndrome (ARDS). The phase 3 started in May is designed to validate signs of efficacy seen in a 12-patient compassionate use program.

Novartis has stepped in to help Mesoblast take remestemcel-L forward in ARDS. In return for a $25 million upfront payment and $25 million investment, plus milestones and royalties, Mesoblast has given Novartis a global license to develop and commercialize remestemcel-L in ARDS.

Evidence of the prospects of remestemcel-L, a mesenchymal stem cell therapy, in COVID-19-related ARDS is set to arrive when the 300-patient phase 3 trial wraps up early next year. If the trial is successful, Novartis plans to work with Mesoblast to “develop appropriate critical quality attributes that meet [FDA] requirements for remestemcel-L.”

The focus on critical quality attributes reflects the problems Mesoblast encountered when it tried to win FDA approval for remestemcel-L in GvHD earlier this year. In its briefing document, the FDA said the attributes “do not have a demonstrated relationship to the clinical performance of specific [drug product] lots.” The advisory committee backed the drug, but the FDA issued a complete response letter.

Novartis, which has an approved cell therapy, may have the expertise to ensure remestemcel-L fares better when up for review by the FDA as a treatment for ARDS in COVID-19 patients. Novartis will also provide “support to enable commercial manufacturing scale-up.” Mesoblast has previously said it needed to “substantially scale up manufacturing” to serve the COVID-19 market.

The relationship between the companies extends beyond COVID-19. Novartis plans to run a phase 3 trial in non-COVID-19 ARDS patients, setting it up to address the broader unmet medical need. ARDS causes 40% mortality in the around 200,000 patients who develop the condition in the U.S. annually. 

Novartis also has an option to distribute remestemcel-L outside of Japan in GvHD and to co-fund its development and commercialization in other non-respiratory indications. Shares in Mesoblast rose 18% in response to the news. Even after the bump, the stock remains down on the highs it hit before the complete response letter.