PERTH, Australia – Regenerative medicine company Mesoblast Ltd. saw its stock drop 37% on the news that it received an FDA complete response letter (CRL) to its BLA for Ryoncil (remestemcel-L) for the treatment of pediatric steroid-refractory acute graft-vs.-host disease (SR-aGVHD).

Approval was highly anticipated since the FDA’s own Oncologic Drugs Advisory Committee (ODAC) voted 9:1 that the mesenchymal stromal cell (MSC) product showed evidence of efficacy as a treatment for SR-aGVHD in children. Ryoncil would be the first FDA-approved GVHD treatment for children younger than 12 and the first MSC product approved in the U.S.

In its CRL, the FDA recommended that Mesoblast conduct at least one additional randomized, controlled study in adults and/or children to provide further evidence of the effectiveness of Ryoncil for SR-aGVHD.

“We’re going to have a meeting with the FDA in the next 30 days to discuss an accelerated approval, which is a conditional pathway, and we will agree to do another trial but after the product gets approved,” Mesoblast CEO Silviu Itescu told BioWorld.

That trial would be conducted in adults, which would allow the product to be available to children under 12 who have no treatment options, the CEO said.

“The good news about the CRL is that most CRLs are related to safety and often efficacy. Here, efficacy was voted on by the ODAC panel, and the FDA has acknowledged no safety concerns,” Itescu said.

He said he believes the FDA wants to see a confirmatory study in a randomized population, but he remains unflappable that the product will be approved.

“The ODAC panel voted 9:1. Of course, it’s going to happen. It’s just a matter of navigating the bureaucracy,” he said.

“We expect to have a discussion around accelerated approval on the basis of existing data with commitment for a post-approval randomized controlled trial in adults predominantly that continues to support the efficacy evidence of the product in this high-risk patient population as was discussed and voted on by the ODAC panel,” Itescu said in a same-day conference call with analysts.

“In the ODAC panel meeting, we initiated a discussion about what a post-approval trial would look like in adults with steroid refractory graft-vs.-host disease. We have a protocol design that is well underway comparing high-risk adults against standard of care. The randomized controlled trial is well powered for outcome measurements we are proposing to the FDA.”

Although the FDA acknowledged that Ryoncil reached its primary endpoint of a 28-day overall response rate in patients at 69%, the agency raised concerns about the efficacy of the therapy, which is also in phase III trials for acute respiratory distress syndrome (ARDS) due to COVID-19.

Ryoncil is derived from allogeneic culture-expanded mesenchymal stromal cells that have been isolated from bone marrow aspirate collected from healthy human donors. The company submitted the final module of a rolling BLA in January, and the FDA set a PDUFA date of Sept. 30.

During the ODAC meeting, Wilson Bryan, director of the Office of Tissues and Advanced Therapies at the FDA’s Center for Biologics Evaluation and Research, said the agency had concerns about the therapy’s mechanism of action, potential variability in an off-the-shelf cell therapy and the lack of a randomized control trial (RCT).

While the FDA asked for advice on requiring another study, pediatric specialists presenting for Mesoblast and testifying in the public hearings stressed the urgency of getting the therapy approved to meet the unmet medical need. Incyte Corp.’s Jakafi (ruxolitinib) has been approved to treat GVHD in adults, but it can’t be used in young children because of its side effects. Not only is there no approved treatment for children younger than 12, there is no standard of care using an off-label therapy, said Joanne Kurtzberg, director of the pediatric blood and marrow transplant program at Duke University School of Medicine and a principal investigator in Mesoblast’s 001 pediatric study.

Kurtzberg said she has been using remestemcel-L for more than a decade with good results. Because of that experience and the positive results she’s seen with the therapy, Kurtzberg argued against requiring a controlled study, saying she and other clinicians wouldn’t risk putting their young patients into a control arm when remestemcel-L works so well. She pointed out that without the therapy, the survival rate for children with GVHD who don’t respond to steroids is 35%.

Questions on mechanism of action

The FDA also identified a need for further scientific rationale to demonstrate the relationship of potency measurements to the product’s biologic activity.

Itescu said the FDA is looking for a “continued understanding of the product in vitro that allows Mesoblast to predict patient outcomes using biomarkers.”

“As we discussed at the recent ODAC meeting, the mechanism of action by which the cells work to reduce inflammatory activation in various diseases involves multiple pathways, and understanding those pathways and the mechanisms involved continue to be an important objective that we are in complete agreement with the FDA on,” Itescu told analysts.

“These are ongoing assays that will continue to be refined and identified in all of our products irrespective of disease,” he said, noting that in the COVID-19 phase III trial, the company is collecting and testing against a large sample of biomarkers known to be significantly impacted by the COVID-19 virus.

Assays measuring the potency of remestemcel-L will continue to be refined to provide further scientific rationale for its use in severe inflammatory diseases with high mortality risk, such as SR-aGVHD and COVID-19 ARDS, Itescu said.

COVID-19 larger unmet need

Analysts questioned whether it was feasible that Ryoncil could be approved to treat COVID-19 before the GVHD indication. Mesoblast is currently conducting a randomized, controlled phase III trial evaluating Ryoncil in up to 300 ventilator-dependent adults with moderate to severe ARDS due to COVID-19.

Itescu said that COVID-19 is “the largest unmet need today,” stressing that the “number one cause of mortality of this dreadful disease is acute respiratory distress syndrome, an overactive immune system that is destroying the lungs while trying to battle this virus.”

COVID-19 ARDS is an inflammatory disease with a similar profile of damaging inflammatory cytokines as is seen in children with SR-aGVHD and is the primary cause of death in COVID-19 infection. The trial’s primary endpoint is reduction of all-cause mortality within 30 days of randomization.

A second interim analysis by the trial’s data safety monitoring board is expected in early November, with completion of patient enrollment expected in December.

“The body of evidence around the use remestemcel-L in inflammatory conditions continues to build,” Itescu said. The stem cell therapy currently has emergency use authorization in the U.S. and Australia to treat ARDS due to COVID-19.

Cantor Fitzgerald Analyst Louise Chen rated Mesoblast “overweight” in an Oct. 2 research note: “We believe the company’s platform of mesenchymal lineage cell therapies has the potential to treat an array of diseases with currently significant unmet needs.”

Remestemcel-L is already approved in Japan for aGVHD (branded as Temcell) in both pediatric and adult indications. It was the first allogeneic regenerative medicine to receive full approval in Japan and was launched with partner JCR Pharmaceuticals Co.

Mesoblast’s shares on Australia’s Securities Exchange (ASX:MSB) fell AU$1.89 on the news, closing at AU$3.19 on market close Oct. 2.

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