PERTH, Australia – Australian stem cell company Mesoblast Ltd. completed a capital raising of AU$138 million (US$90 million) to scale up manufacturing of its allogeneic cell therapy, remestemcel-L, to treat COVID-19 acute respiratory distress syndrome (ARDS).
The Melbourne-headquartered company is currently enrolling patients in a randomized placebo-controlled phase II/III trial in up to 300 patients across 30 sites in the U.S. The trial is evaluating whether remestemcel-L can reduce the high mortality in COVID-19 patients with moderate to severe ARDS.
“Patients are being dosed, and we’re really pleased how fast enrollment is growing,” Mesoblast CEO Silviu Itescu told BioWorld. “We’re right on target and hope to update the market soon.”
The phase II/III trial was initiated after promising results were seen with remestemcel-L under an emergency compassionate-use protocol in COVID-19 ARDS at Mount Sinai Hospital in New York, where nine of 12 (75%) ventilator-dependent patients were able to come off ventilators within 10 days.
Under the compassionate-use protocol, patients in intensive care units received standard-of-care treatment. Once they were intubated on a ventilator, they were treated within 72 hours with two infusions of Mesoblast’s remestemcel-L cells within five days.
“Once you’re ventilated when you have acute respiratory distress syndrome in the lungs, your likelihood of coming off a ventilator is 9%, and your survival is 12%,” Itescu said.
“What’s exciting is that our patients in the same epicenter of this disease with the same treatment everyone else is getting, suddenly 75% are coming off of ventilators within 10 days, and we’ve got 83% survival,” Itescu said.
The compassionate-use treatment experience informed the design of the phase II/III trial, and the FDA approved the same protocol, but it is powered so that results will be “self-evident,” Itescu said.
The phase II/III trial will randomize up to 300 ventilator-dependent patients in intensive care units to either remestemcel-L or placebo on top of standard of care, in line with guidance provided by the FDA. The primary endpoint is all-cause mortality within 30 days of randomization, with the key secondary endpoint being the number of days alive and off mechanical support.
“What people are dying of is acute respiratory distress syndrome, which is the body’s immune response to the virus in the lungs, and the immune system goes haywire, and in its battle with the virus it overreacts and causes severe damage to the lungs,” he said.
Capital raise allows scale up for COVID-19 and influenza
The capital raise consisted of a placement of 43 million shares to existing and new institutional investors at a price of AU$3.20 per share, representing a 7% discount to the five-day volume-weighted average price (VWAP) at the close of trading May 8. The placement was conducted with Bell Potter Securities as lead manager and underwriter. Settlement is expected to occur on Friday, May 15.
Most of the funds raised will be used to scale up manufacturing of remestemcel-L for the treatment of critically ill patients suffering with diseases causing ARDS, including COVID-19 and influenza.
“We’re in the middle of a pandemic, and people are talking about opening up, and they’re talking about a potential second wave,” Itescu said. “It’s too early to talk about projections, but we need to at least be in a position to make more product in an additional facility, so that requires technology transfer and certain process improvements.”
Remestemcel-L is Mesoblast’s lead product, and it is currently being studied in multiple indications so the move to ramp up manufacturing is a good strategic move regardless of COVID-19, he said.
“There are at least 125,000 patients every year in the United States with influenza-related acute respiratory distress syndrome in intensive care units, and those patients have got about a 40% fatality rate. Up to about 60,000 patients die per year due to influenza ARDS, so even if COVID-19 magically disappears, which we could only hope, influenza is here to stay despite vaccines being available,” the CEO said.
This product would work in the same way for influenza-related ARDS as it would for COVID-19-related ARDS, he said.
The ability to build out manufacturing capacity is part of an FDA requirement to be able to demonstrate it can make product for patients in the U.S.
The company already has a manufacturing facility in Singapore, and the additional site in the U.S. would give the company the ability to provide product globally.
“We’re putting our strategic plan into play. You need to have multiple geographies, especially in this kind of environment,” Itescu said.
“Without the cash, we wouldn’t have been able to deliver on this, but we now can execute.”
Mesoblast's allogeneic candidates are based on mesenchymal lineage cells collected from the bone marrow of healthy adult donors.
Remestemcel-L is currently being reviewed by the FDA for potential approval in the treatment of children with steroid-refractory acute graft-vs.-host disease (aGVHD). The company submitted the final module of a rolling BLA in January. The FDA has set a PDUFA date of Sept. 30 for the product branded as Ryoncil.
The clinical data submitted with the BLA showed a survival rate of 79% compared to an expected 30% survival rate in the pediatric phase III trial in aGVHD.
Remestemcel-L is also being developed for other rare diseases. Mesoblast is completing phase III trials in advanced heart failure and chronic low back pain.
Mesoblast shares (ASX:MSB) were down 1.45% on the news, trading at AU$3.39 per share by market close May 13. On Nasdaq (MESO), shares closed at $12.15.