Australia's Mesoblast receives $58.5 million cash injection from US biotech Celgene Corp
Tuesday, April 14, 2015
Stem-cell therapy company Mesoblast received a healthy lift on the Australian market after a $58.5 million cash injection from US giant Celgene Corporation.
Mesoblast yesterday revealed that Celgene is its newest shareholder after the biopharmaceutical company bought 15.3 million ordinary shares in Mesoblast for $58.5m at $3.82-per-share. The share buy will see Celgene emerge with about a 4.5 per cent stake in Mesoblast.
Shares in Mesoblast leapt on news of the deal, closing the day almost 25 per cent higher at $3.99.
The deal also includes Celgene earning a six-month right of first refusal over licensing deals for the commercialisation of Mesoblast’s adult stem cell products in the treatment of certain diseases. This includes Mesoblast’s proprietary mesenchymal lineage adult stem cell product candidates for the prevention and treatment of acute graft versus host disease (GVHD), certain oncologic diseases, inflammatory bowel diseases and organ transplant rejection.
Mesoblast’s chief executive, Silviu Itescu, said Celgene wanted some commercial rights as part of the deal, adding that he would update the market on commercial arrangements as the agreement was implemented. He said the products selected were fairly advanced in development and he hinted that there were other products Mesoblast was developing that it could discuss with Celgene.
Celgene’s president, Mark Alles, said the agreement provided an opportunity for his company to add to its cellular and regenerative medicine pipeline.
“We are committed to developing important new therapies for significant medical diseases that are currently not being adequately addressed,” he said.
Lodge Partners analyst, Marc Sinatra, said both companies had significant interests and intellectual property in the manufacturing of cellular therapies.
“A combined patent portfolio would be a significant barrier to anyone wishing to enter the cellular therapies space,” he said.
ASX-listed Mesoblast — backed by prominent investor Alex Waislitz and other high-profile individual and corporate investors — is worth about $1.3 billion, but is yet to earn any revenue as it pushes towards a market launch. “We have a strong technology platform that has multiple products ... we’re quite a mature stage company,” Mr Itescu said. “While we are very ambitious, it is a very expensive and complex area once you try to get into commercialisation and sales marketing — those areas that the big pharmaceuticals have got tremendous capabilities in.
Mr Itescu said that Celgene was a great partner for certain disease fields but he added the Mesoblast was also in talks with several other potential partners for other products, such as the one for chronic discogenic low back pain.
“We are now cashed up for the foreseeable future and the cash (from the deal) will help facilitate further development, particularly of our intravenous product for other inflammatory conditions like rheumatoid arthritis, diabetic and kidney disease, which are two very large opportunities that we need cash available to continue expanding those programs.”
heaustralian.com.au
