Mesoblast said today it received about A$4.3 million ($3.9 million) through the government-run Innovation Australia Research and Development (R&D) Tax Incentive Program for R&D activities conducted in Australia during the 2012 financial year.

Mesoblast said the funds will be used to advance development of its adult mesenchymal precursor cell (MPC) technology platform and product pipeline. MPC produces bone marrow and adipose tissue-derived products, as well as dental pulp stem cells (DPSCs) and expanded hematopoietic stem cells (HSCs).

“Based on the company’s ongoing clinical and research activities in Australia across its product portfolio, Mesoblast anticipates that it will make additional submissions in FY2013 and be eligible to receive further reimbursements,” the company said in a statement.

Mesoblast specializes in allogeneic or “off-the-shelf” regenerative medicine products that focus on repair of damaged issues and modulation of inflammatory responses in conditions with significant unmet medical needs. The company’s lead product candidates use its MPC platform in systemic inflammatory conditions, cardiovascular diseases, and orthopedic diseases of the spine.

Last month, the company launched a Phase II trial of its MPC in people with type 2 diabetes and diabetic nephropathy. Mesoblast is giving 30 patients with Stage 3b or 4 diabetic nephropathy a single intravenous infusion of its MPCs over an initial three-month period. The company will compare safety and efficacy of 150 million or 300 million intravenously injected MPCs against placebo.

Based on preclinical studies, the company said it expects to see mechanisms of action that include immunomodulation and reduction of kidney inflammation, reversal of abnormal kidney blood flow, and repair/regeneration of kidney tissue.

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