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Mesoblast sinks after therapy not approved

Steven Deare
·1-min read

Australian biotech Mesoblast has plummeted on the ASX after US health authorities declined to approve its therapy to treat a rare disease that affects blood cancer patients.

The US Food and Drug Administration (FDA) has asked the company for at least one more study that shows its therapy, called remestemcel-L, can treat steroid-refractory acute graft versus host disease.

The decision caused shares to fall by 34.45 per cent to $3.33 at 1448 AEST.

Shares reached a 2020 high of $5.70 on September 29.

Management had been hopeful of approval after a US government committee in August voted nine to one for the therapy.

Mesoblast will ask health officials for accelerated approval given the bleak outlook for people with the disease.

Chief executive Silviu Itescu told a conference call that if this was granted, Mesoblast would have another study to provide more data.

"We're confident we'll have an accelerated path forward," he said.

Approval would be lucrative as the US has no therapy for children under 12 years with the condition.

The life-threatening disease affects about half the people who have bone marrow transplants for blood cancer.

Mesoblast is developing the same cell therapy to treat people with respiratory problems from COVID-19.

Acute respiratory distress syndrome is the main cause of death for people infected with the virus, according to Mesoblast.

Up to 300 adults with COVID-19, who are on ventilators, are using the cell therapy in trials.

This is being conducted with US FDA oversight.

More results from these trials will be published in early November.