Cephalon is paying Mesoblast $130 million up front and will make a $220 million equity investment in the Australian firm as part of a collaboration to develop and commercialize adult mesenchymal precursor stem cell (MPC) therapies based on Mesoblast’s adult stem cell technology platform.
The partnership will focus on treatments for specific degenerative cardiovascular and central nervous system disorders along with products for use as part of hematopoietic stem cell transplantation in cancer patients. The deal includes Mesoblast’s existing clinical-stage product for the treatment of congestive heart failure and will span other disorders including acute myocardial infarction, and Alzheimer and Parkinson diseases.
Under terms of the deal with Cephalon, Mesoblast will be responsible for carrying out and funding specific Phase IIa trials of partnered products. It will also retain worldwide manufacturing and supply rights. Cephalon will take over development for Phase IIb and III trials and retains worldwide commercialization rights to resulting therapies. Its $220 million equity investment in Mesoblast equates to a 19.99% stake. Mesoblast could receive additional regulatory milestone payments from Cephalon of up to $1.7 billion.
Mesoblast says the deal represents the largest ever in the regenerative medicines sector. “This global licensing agreement positions Cephalon as a leader in regenerative medicine while further strengthening our late-stage pipeline with another innovative biologic platform,” adds Cephalon CEO, J. Kevin Buchi, who has joined the Mesoblast board of directors. “Mesoblast has done an outstanding job of developing Phase II clinical data in congestive heart failure and hematopoietic stem cell transplants, plus preclinical data in acute myocardial infarction.”
Mesoblast was established in 2004 to develop therapies for patients with bone and joint diseases, under a worldwide license to commercialize orthopedic applications of an adult stem cell technology developed by scientists at South Australia's Hanson Institute and Institute of Medical and Veterinary Science. Just a few weeks ago Mesoblast reported that it had received clearance to effect the previously announced acquisition of U.S.-based firm Angioblast, which has been exploiting the MPC technology to develop treatments for cardiac, vascular, and eye conditions. Mesoblast had previously held a 39.2% stake in Angioblast, and the firms were sharing costs associated with various development efforts related to the shared MPC platform technology, including GMP process development and certain preclinical and clinical costs.
The adult stem cell approach hinges on the identification of specific markers on the surface of MPCs to which monoclonal antibodies bind, and allow the extraction of MPCs from the mixture of cells in their resident tissues. Mesoblast claims the technology results in up to 1,000-fold purer MPC populations than those generated using existing or competing technologies.
Mesoblast and Angioblast are exploiting the MPC technology to develop both autologous therapies and off-the-shelf allogeneic products suitable for immediate use. In July Mesoblast was granted Australian Therapeutic Goods Administration clearance to manufacture and supply MPC products. The license allows Mesoblast to make its manufactured autologous MPC products commercially available to doctors and hospitals across Australia for use in the autologous repair and regeneration of damaged tissues. The cells will be manufactured under an agreement between Mesoblast and its licensed manufacturing partner, Cell Therapies.
In its annual report in October, Mesoblast confirmed that TGA clearance meant in the near term it aims to focus on providing high-end autologous therapies for use in the repair of severe fractures and degenerative disorders. These will effectively represent premium priced products the firm says will fill an interim need until its allogeneic, off-the-shelf products receive regulatory approval.
The firm’s clinical pipeline is headed by a Phase III-stage off-the-shelf MPC product for use in bone marrow transplantation. The product is also under development under an existing FDA orphan drug designation for expanding hematopoietic stem and progenitor cell numbers in patients with hematologic malignancies, such as multiple myeloma.
Mesoblast’s later-stage clinical pipeline also includes Revascor™, an MPC product for use in the repair of tissue damaged due to congestive heart failure, which is undergoing Phase II evaluation. Its NeoFuse™ product for minimally invasive spinal fusion surgery of the cervical and lumbar spine is being evaluated in two international, FDA-cleared Phase II trials. Additional products for knee osteoarthritis, long-bone fracture repair, and acute myocardial infarction are at various stages of Phase II development.
The firm is in addition looking to progress its diabetes and eye diseases products into Phase II studies. In early November Mesoblast reported the award of $1.2 million in grants under the U.S. Government’s Qualifying Therapeutic Discovery Project program. The funding will support further development of products for congestive heart failure, myocardial infarction, oncology, eye indications, and diabetes-related therapy.