MesoBlast ($MSB): FDA Green Lights PII Trial for Type 2 Diabetes

MesoBlast (ASX: MSB) press released FDA approval to move to a PII trial today. Recall that MSB's product is "allogeneic" (other people's cells) and as such is "off-the-shelf" ready. Similar to Athersys and PluriStem approaches. Diabetes is a large market and is often related to an auto-immune condition that results in damage to the insulin producing cells (islets of the pancreas).

The MesoBlast trial will be a randomized, placebo-controlled, 3 month trial that will evaluate a single IV injection of one of three (progressively higher doses of cells) in N=60 (Type II diabetes patients) who show elevated blood glucose levels. Animal data in this indication showed hints of activity. MesoBlast has demonstrated safety with their product in several prior trials.

Daily Dose Conclusion: MesoBlast recognizes that their cell therapy product may have multiple uses and multiple indications. MesoBlast had a BIG WIN when Cephalon invested in their therapy (since acquired by Teva). With that said the market cap of MesoBlast peaked back in November and has come down sharply (>40%) as investors have struggled with the high valuation. The cardiology data presented at AHA seemed to mark the peak. Valuations for Mesoblast versus other Allogeneic companies in the space such as Athersys and PluriStem are tough to understand.

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