Mesoblast Intervertebral Disc Repair Phase II Trial Update ($MSB)

Mesoblast Limited (ASX: MSB; OTC ADR: MBLTY) is the world’s leading developer of innovative biological products for the broad field of regenerative medicine.  Mesoblast’s commercial strategy is based on its unique proprietary adult mesenchymal precursor cells.  The company’s lead products will target cardiovascular conditions, diabetes, inflammatory conditions of lungs and joints, eye diseases, bone marrow cancers, bone fractures, cartilage degeneration and musculoskeletal conditions. Mesoblast and Teva Pharmaceutical Industries Ltd. have established a strategic alliance to commercialize adult stem cell products for degenerative conditions of the cardiovascular and central nervous systems. The alliance also extends to products for augmenting bone marrow transplantation in cancer patients.

Mesoblast announced that its Phase 2 clinical trial of allogeneic (off-the-shelf) Mesenchymal Precursor Cells has now enrolled 50% of the total study patients.  This trial will investigate non-surgical treatment of lower back pain due to degenerated intervertebral discs.  The rapid enrollment of this study indicated the Phase 2 trail will reach full capcity for its study by the third quarter.  The pace in which this study has enrolled participants bespeaks of the great need back patients have for non-surgical treatments.   

The Company commented,

"Up to 15 per cent of people in industrialized countries have chronic low back pain lasting more than six months. For those with progressive, severe and debilitating pain due to degenerating intervertebral discs, the only current option is major back surgery involving spinal fusion, artificial disc replacement, or other surgical procedures. Avoidance of surgery and its complications is a major objective of any new treatment for degenerative disease of the spine."

Mesoblast published the results of its previous successful study in the March 2012 issue of the Journal of Neurosurgery. 

Read the full press release here.  

DD Education: Which Cell Therapy companies present the best value? Part 2

We developed an analysis using public filings and annualizing the most recent quarters as of 12/31/11. As such, the accuracy is subjective to our proprietary algorithm, and this list is not mean to be all comprehensive.

We conclude that ex leaders Dendreon and MesoBlast make the space very inexpensive. The sample below represents just over $500 million in market cap for eight of the selected public companies (ex DNDN and MSB). These companies have 3 - PIII trials, 5 PII trials and several P1 trials (based on these crude metrics).

We conclude that is worth investors time to understand among these companies in terms of what they are doing and the associated probabilities of success of their trials. Recent data peaks from the Cardiology space suggests that Baxter (BAX) and their CD34 cell type may be very viable. NeoStem has a very similar approach. The retrenchment in MesoBlast shares since that company presented data at AHA in November is of concern. Cytori, Aastrom, Athersys all have active programs in cardiology while Athersys lead program is partnered with Pfizer for Ulcerative Colitis and Aastrom is entering a Phase 3 trial in CLI.

By price ($), Osiris, MesoBlast, and Dendreon are the highest $ priced stocks:

But that starts to change as we migrate to market cap:

And if we eliminate Mesoblast and Dendreon we get a better picture of the rest of the field:

And that picture changes as we adjust for debt and cash: (enterprise value). In all fairness here, we know that NeoStem with $20-$30 million in value from their China generic company, could be the cheapest name and others are / will raise capital but ex China, Athersys is the “cheapest name”.

Looking at R&D spending: IMUC, Prima and NeoStem are among the most efficient but in fairness one must adjust for the fact that Aastrom is embarking on a pivotal trial versus Prima just starting their P3 and NeoStem their P2.

Revenues: Here we have excluded NeoStem’s $65 million from China which means PCT (Cell Therapy CMO) is running at close to $10 million in annual revenues (currently).

Bell Potter Securities on Mesoblast ($MSB): Headed to the sweet spot in diabetes care. Buy, Speculative. Current price $6.45. Target price $16.00

Mesoblast (ASX: MSB) is developing a series of high margin, off-the-shelf adult stem cell products that are obtained from a single donor, commercially expanded and frozen, and subsequently used in potentially thousands of unrelated, or allogeneic, recipients at the time and place of need. Mesoblast listed on the Australian Securities Exchange (ASX: MSB) in December 2004. In December 2010, Mesoblast completed its acquisition of United States company, Angioblast Systems Inc. This strategic acquisition enabled Mesoblast to broaden its product pipeline across a wider range of clinical indications including cardiovascular, oncology, eye diseases, and diabetes, in addition to its orthopedic range of products. 

 

Bell Potter Securities has released a report on Mesoblast, giving the company a "speculative" risk rating and a $16 price target. The report states:

"In view of the substantial opportunity of MSB’s cardiovascular and Bone Marrow Transplant franchises and other pipeline opportunities in diabetes, eye diseases & orthopedic becoming more substantial, we re-iterate our positive outlook on MSB. We value Mesoblast at A$10.91 base case and A$21.60 optimistic case. Our target price of A$16.00 sits at the mid-point of our DCF range. We expect significant news flow over the next twelve months as assisting in the stock being re-rated to our target price including a) initiation of the Phase II diabetes trial; b) initiation of a pivotal trial in heart failure; c) completion of the Phase II spinal fusion trials; d) interim data from the EU Phase II trial in Acute Myocardial Infarction; e) receipt of a Special Protocol Assessment by the FDA for the BMT Phase III Trial; f) Interim data from Phase II lumbar disc repair trial and g) potential licensing announcement for the diabetes program."" 

 

Read the full report below.  

Bell Potter Securities Report on Mesoblast 1 31-2012

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Data From American College of Cardiology: $NBS, $BAX, $ASTM, $CMXI

Data came out over the weekend in Advance of the American College of Cardiology meeting in Chicago. The article reviews the Focus-CCTRN trial which uses autologous bone marrow to treat heart disease in a Phase II trial.  Specifically the trial evaluates the injection of bone marrow in ischemic cardiomyopathy.   This trial is similar to what Baxter is working on in their phase III trial using not bone marrow but what they believe is the active cell in marrow, CD 34+ cells. Incidentally this is similar to what NeoStem is doing with the Phase II Amorcyte Heart Attack “PRESERVE” trial which is using IRA (Infarct related artery) injection of CD 34+ cells (NeoStem is also doing the manufacturing for Baxter).
 
The results of the study are fascinating. They showed that the greatest efficacy was shown in those patients who received the greatest number of CD 34 cells.
 
Specifically the article states: 

"A regression analysis showed that higher CD34 cell or CD133 cell counts were associated with greater absolute unit increase in LVEF. The range of CD34 was 0.5% to 6.9% (SD, 1.2%). Assuming that differences of 1.96 for SD or 2.4% are more likely due to biological variability, the effect of differences in CD34 cell level beyond that expected due to natural variability was examined, using a 3% level to be conservative. Every 3% higher level of CD34 cells was associated with on average a 3.0% greater absolute unit increase in LVEF in a multiple variable model that included age and treatment as predictor variables (3.06 [95% CI, 0.14-5.98];P=.04)."

This article seems to confirm what NeoStem’s Chief Medical officer, Andrew Pecora MD, and Phase II Trial Investigator, Arshed Quyyumi MD, FRCP wrote in their Letter to the editor (Published in JAMA, March 14, 2012) that reviews the results from another Bone Marrow Trial (The Late TIME trial) that was presented last Fall at the American Heart Association (AHA).

“In the Late TIME trial, treated patients received a median CD34 cell dose of 3.8±1.5x106 cells, well below 10x106 CD34 cells. Additionally, in vitro SDF-1 mobility of the infused cells was not measured and may have been adversely affected by the absence of autologous serum in the infused product. Future studies must account for the quantity and mobility of infused (potent) cells before conclusions regarding efficacy are made.”

Daily Dose Conclusion: A lot of work has been done with Bone Marrow cells and its all shown trends but there have not been any home runs. The data seems to be pointing to the active ingredient (there may be more than one, that’s for sure) is CD 34+ cells. Patinets with greater numbers of these cells  are showing efficacy. The Amorcyte Phase 1 data was very compelling showing a statistically valid correlation between the number of CD 34 + CXCR4+ cells and the effect on both perfusion and infarct size. The fact that Baxter is also pursuing a CD 34+ cell approach is validating. The trial is being run by Dr. Doug Losordo  who is considered a Key Opinion Leader (KOL) and Pioneer in cell therapy. Dr. Losordo’s team last summer published the results of experiments that showed that among all the various cells present in marrow, it is the CD 34+ cells that generate the greatest amount of blood vessel growth.

Daily Dose Equities - Effect of Transendocardial Delivery - CCTRN TrialThis article showed in a sub-group analysis that patients with higher numbers of CD34+ cells did best.

View more documents from ProActive Capital Resources Group

Daily Dose Equities - Exosomes from Human CD34 + Stem Cells

This article is published by Dr. Doug Losordo, who since the article was printed, has joined Baxter to run their CD 34+ Cardiac Ischemia Trial (Angina – heart pain).

View more documents from ProActive Capital Resources Group

Daily Dose Equities - Intracoronary Bone Marrow

Two Letters to the Editor of JAMA; 1) Dr Hung Q Ly MD, MSC, FRCPC and 2) Drs. Arshed Quyyumi and Andrew Pecora (NeoStem) discuss the flaws in the LATE-Time trial.

View more documents from ProActive Capital Resources Group

Key markets covered include:

• Stem Cell Research
• Cardiac Heart Repair
• Benefits of using your own cells
• Stem Cell Trials
• Heart Attack Cell Therapy
• Proof of Concept
• Clinical Trial Data

JAMA: Letter to the Editor : Intracoronary Bone Marrow Mononuclear Cells After Myocardial Infarction

We picked up on a JAMA letter to the editor (below) that reviews data from the TIME trial that was presented last fall. The author, Drs Arshed Quyyumi (NeoStem PI) and Andrew Pecora (NeoStem CMO) clearly identify that the effective dose given in the "Late TIME" trial appears to have been low , (3.8 million CD 34 cells) versus data that the Amorcyte trial reported that an effective biological threshold exists at 10 million cells. The authors in the letter to the editor state:

In the LateTIME trial, treated patients received a median CD34 cell dose of 3.8±1.5 x106 cells, well below 10 x106 CD34 cells. Additionally, in vitro SDF-1 mobility of the infused cells was not measured and may have been adversely affected by the absence of autologous serum in the infused product. Future studies must account for the quantity and mobility of infused (potent) cells before conclusions regarding efficacy are made.

Daily Dose Conclusion: NeoStem (NBS)  and Baxter (BAX) are both pursuing the use of CD 34+ cells in STEMI and CMI (angina) respectively. CytoMedix just reported that ALD-br cells show hints of efficacy and Aastrom seems to be moving forward in DCM. All cardiology indications. The NeoStem message is focused on the dose, timing and method of delivery, biological effect and clinical outcome. We see this as a core strength and part of what Progenitor Cell therapy (PCT) brings to the company.

On a separate note we believe Cardiology is the next major breakthrough to be seen in the regenerative medicine space. While NeoStem is well positioned as a manufacturer for Baxter and their own Amorcyte the company also has attractive valuation measures. That is not to say that other players like Aastrom , Athersys and Cytori are likely to move forward with P2/3 plans in the cardiac care space. Also keep an eye out for MesoBlast which has seen a decline in valuation since the TIME (& their own data) was presented at AHA last fall.

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Intracoronary Bone Marrow Mononuclear Cells After Myocardial Infarction

View more documents from ProActive Capital Resources Group.

Medipost's MSC (Stem Cell Therapy) Gets the OK in Korea for Osteoarthritis ($MSB)

Medipost (KOSDAQ:078160) released news that the Korean FDA has approved Cartistem to treat osteoarthritis. Cartistem consists of allogeneic mesenchymal stem cells from umbilical cord blood. The product is marketed in Korea by partner Dong-A Pharmaceutical Co. Ltd. (KSE:000640). Medipost also has FDA clearance to conduct a Phase I/IIa trial of Cartistem in the U.S. 

We see this as a posityive sign for other companies that believe an allogeneic MSC can be efficacious in osteoarthritis. Companies active in this area with watching include MesoBlast (MSB) and Tigenix (NYSE Euronext Brussels: TIG).

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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Which Cell Therapy companies present the best value?

Which Cell Therapy companies present the best value?

We developed an analysis using public filings and annualizing the most recent quarters as of 12/31/11. As such, the accuracy is subjective to our proprietary algorithm, and this list is not mean to be all comprehensive.

We conclude that ex leaders Dendreon and MesoBlast make the space very inexpensive. The sample below represents just over $500 million in market cap for eight of the selected public companies (ex DNDN and MSB). These companies have 3 - PIII trials, 5 PII trials and several P1 trials (based on these crude metrics).

We conclude that is worth investors time to understand among these companies in terms of what they are doing and the associated probabilities of success of their trials. Recent data peaks from the Cardiology space suggests that Baxter (BAX) and their CD34 cell type may be very viable. NeoStem has a very similar approach. The retrenchment in MesoBlast shares since that company presented data at AHA in November is of concern. Cytori, Aastrom, Athersys all have active programs in cardiology while Athersys lead program is partnered with Pfizer for Ulcerative Colitis and Aastrom is entering a Phase 3 trial in CLI.

By price ($), Osiris, MesoBlast, and Dendreon are the highest $ priced stocks:

But that starts to change as we migrate to market cap:

And if we eliminate Mesoblast and Dendreon we get a better picture of the rest of the field:

And that picture changes as we adjust for debt and cash: (enterprise value). In all fairness here, we know that NeoStem with $20-$30 million in value from their China generic company, could be the cheapest name and others are / will raise capital but ex China, Athersys is the “cheapest name”.

Looking at R&D spending: IMUC, Prima and NeoStem are among the most efficient but in fairness one must adjust for the fact that Aastrom is embarking on a pivotal trial versus Prima just starting their P3 and NeoStem their P2.

Revenues: Here we have excluded NeoStem’s $65 million from China which means PCT (Cell Therapy CMO) is running at close to $10 million in annual revenues (currently).