Novartis Signs $1.35 Billion Licensing Deal with Mesoblast for Remestemcel-L for Acute Respiratory Distress Syndrome (ARDS)

Nov 20, 2020 | Investor Watch, News

Novartis Signs $1.35 Billion Licensing Deal with Mesoblast for Remestemcel-L for Acute Respiratory Distress Syndrome (ARDS)

Novartis entered into an exclusive worldwide license and collaboration agreement with Mesoblast to develop, commercialize and manufacture remestemcel-L for the treatment of acute respiratory distress syndrome (ARDS), including that associated with COVID-19. Remestemcel-L is currently being studied in COVID-19-related ARDS in an ongoing 300-patient Phase III study. Novartis intends to initiate a Phase III study in non-COVID-19-related ARDS after the anticipated closing of the license agreement and successful completion and outcome of the current study.

Under the terms of the deal, Novartis acquires exclusive worldwide rights to develop, commercialize and manufacture remestemcel-L for ARDS. Mesoblast will receive $25 million up front and will invest $25 million in Mesoblast equity along with additional pre-commercialization milestone payments that could total $505 million and post-commercialization milestones up to $750 million. Mesoblast is also eligible for royalties. Novartis will offer support for commercial manufacturing scale-up. Novartis also has an option to distribute the drug for graft versus host disease (GVHD) outside Japan. Both companies have rights to co-fund development and commercialization for other non-respiratory indications.

Remestemcel-L is made up of culture-expanded mesenchymal stromal cells derived from the bone marrow of an unrelated donor. The companies believe it has immunomodulatory properties that can counteract the overactive immune reaction known as a cytokine storm that is linked to COVID-19 and other inflammatory conditions. They believe it down-regulates the production of pro-inflammatory cytokines and increased production of anti-inflammatory cytokines.

An open-label compassionate use program was initiated in March that included 12 patients with COVID-19-associated ARDS. The patients were on mechanical ventilation. The therapy was associated with an 83% survival rate. This supported the launch of the current Phase III study, which is expected trial to be complete in early 2021.

“Our collaboration with Novartis will help ensure that remestemcel-L could become available to the many patients suffering from ARDS, the principal cause of mortality in COVID-19 infection,” said Silviu Itescu, chief executive officer of Mesoblast. “This agreement is in line with our corporate strategy to collaborate and partner with world-leading major pharma companies in order to maximize market access for our innovative cellular medicines.”

Source: Novartis

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