Mesoblast Surges After FDA Signals Clear Path for Back Pain Drug
Regulator acknowledges efficacy of rexlemestrocel-L and opens door to a coveted opioid-sparing label, boosting prospects in a multi-billion dollar market.
Shares of Mesoblast Ltd. (NASDAQ: MESO) surged in pre-market trading Monday after the regenerative medicine company announced it had received positive and clarifying feedback from the U.S. Food and Drug Administration for its lead drug candidate, rexlemestrocel-L, as a treatment for chronic low back pain (CLBP).
The Australian-based firm disclosed that the FDA acknowledged trial data showed a notable effect on pain intensity and, crucially, confirmed that a 12-month reduction in pain could serve as a basis for determining the product's efficacy. This guidance provides Mesoblast with a significantly clearer regulatory pathway, a development that investors have long awaited.
The market’s enthusiastic response propelled the stock higher, building on a strong consensus from analysts who hold a $35.00 consensus price target on the company, which has a market capitalization of approximately $1.94 billion.
The most significant commercial aspect of the FDA's feedback involves the potential inclusion of opioid reduction data on the drug's label. The regulator indicated that robust results from a controlled trial showing a decrease in opioid use could be included in the product's official labeling. Such a distinction would be a powerful differentiator in a medical field actively seeking alternatives to addictive painkillers.
"The feedback from the FDA is a transformative event for Mesoblast and a beacon of hope for the millions suffering from chronic low back pain," said Silviu Itescu, Chief Executive Officer of Mesoblast, in a statement released early Monday. "The agency's guidance on the approvability of our 12-month pain reduction data, coupled with the potential to include opioid-sparing language, provides a clear path for our ongoing Phase 3 trial and future BLA submission."
Chronic low back pain represents a massive and underserved market, with analysts projecting its value to grow from $2.7 billion in 2024 to nearly $6.7 billion by 2034. The condition is a leading cause of disability and a primary driver of opioid prescriptions, a practice the medical community is under pressure to curtail.
Mesoblast's therapy, which already holds a Regenerative Medicine Advanced Therapy (RMAT) designation for this indication from the FDA, has shown promising results in this area. Data from a previous Phase 3 study demonstrated that patients treated with a single injection of rexlemestrocel-L were significantly more likely to have ceased all opioid use by 36 months compared to those receiving a placebo.
The company is currently enrolling patients in a second, confirmatory Phase 3 trial, which is now more than 50% complete. The recent FDA feedback provides crucial clarity on the trial's primary endpoints, substantially de-risking the program and bolstering investor confidence.
While Mesoblast has faced regulatory hurdles in the past—receiving two Complete Response Letters for a separate cell therapy, remestemcel-L, before ultimately winning its approval in December 2024—the experience has seasoned the company in navigating the complexities of the FDA review process. The constructive dialogue regarding rexlemestrocel-L suggests a more streamlined path forward for its back pain program.
With a clearer regulatory endpoint, a potential blockbuster market in its sights, and the coveted opioid-sparing claim now a tangible possibility, Mesoblast is positioned to advance its therapy as a potentially revolutionary, non-addictive solution for one of modern medicine's most persistent challenges.