Mesoblast Surges on Positive Remestemcel-L Study Data
An independent study shows Mesoblast's lead drug candidate, Remestemcel-L, is superior to Ruxolitinib in treating SR-aGvHD.
Shares of Mesoblast (MESO) saw a pre-market surge Thursday after an independent study revealed its lead drug candidate, Remestemcel-L, demonstrated superior clinical outcomes compared to the blockbuster drug Ruxolitinib for treating steroid-refractory acute graft-versus-host disease (SR-aGvHD).
The pivotal data, presented at the prestigious 67th American Society of Hematology (ASH) Annual Meeting, could pave the way for Mesoblast to capture a significant share of a market dominated by a major pharmaceutical player. Ruxolitinib, marketed by Incyte as Jakafi in the U.S. and by Novartis as Jakavi elsewhere, is a multi-billion dollar therapy, underscoring the commercial opportunity for a superior treatment.
The findings come from a large-scale meta-analysis of 2,732 patients. The study showed that patients treated with Remestemcel-L achieved higher rates of both complete and overall remission compared to those treated with ruxolitinib. While both therapies had favorable safety profiles, the study noted differences in adverse events that clinicians would need to consider, according to the company's press release.
This head-to-head superiority is a significant victory for Mesoblast. The company's lead product, sold as Ryoncil, is already the first mesenchymal stromal cell (MSC) product approved by the U.S. Food and Drug Administration (FDA) for any indication and is the only therapy approved for children under 12 with SR-aGvHD. This new data strengthens its clinical profile in the broader patient population.
Despite the positive news, Mesoblast shares experienced volatility, opening higher before settling at $18.40, a decrease of 3.41% in afternoon trading. This pattern is not uncommon for biotechnology stocks, which can experience profit-taking after an initial run-up on clinical trial results. The stock is still trading near the top of its 52-week range of $9.61 to $22.00.
Wall Street remains optimistic about the company's prospects. Analyst consensus rates the stock as a "Strong Buy," with an average price target of $35.00, suggesting a potential upside of nearly 90% from its current price. This reflects confidence in the long-term potential of Mesoblast's allogeneic cellular therapy platform, which is being developed for a range of inflammatory conditions.
Investors will now be closely watching for Mesoblast's next steps, which will likely involve further engagement with the FDA to discuss a potential Biologics License Application (BLA) to expand the label for Remestemcel-L based on this new evidence. A successful label expansion could significantly enhance the drug's revenue potential and solidify Mesoblast's position as a leader in regenerative medicine. The presentation at the ASH Annual Meeting, a premier event for hematology professionals, ensures the data will receive widespread attention from the medical community.