Novartis Partnership 

The prospect has taken up countless column inches in various newspapers and web forums over the years but today Mesoblast has finally found itself a tier one pharma company to collaborate on its promising treatment for inflammatory diseases, remestemcel-L. 

The Swiss major, Novartis has entered into an exclusive license and collaboration agreement with Mesoblast for the development, manufacture and commercialization of remestemcel-L for the treatment of Acute Respiratory Distress Syndrome (ARDS), including that associated with COVID-19. 

 Novartis has a demonstrated history of delivering first-in-class treatments over nearly 2 decades with a particularly impressive record of bringing ground breaking cell based therapies to market.  There would be no better partner for Mesoblast and remestemcel-L at this stage of their development life-cycle. 

This exciting agreement shores up Mesoblast’s short term financial needs with an upfront payment, but also Novartis will initiate a phase 3 study into non COVID-19 ARDS which will be fully funded by them. 

Importantly, Novartis will  work together with Mesoblast to develop appropriate critical quality attributes that meet the FDA’s requirements in advance of the initiation of the phase 3 study in non COVID-19 ARDS.

Key transaction terms: 

  • Novartis will make a US $50 million upfront payment including US $25 million in equity.
  • From the initiation of a Phase 3 trial in all-cause ARDS, Novartis will fully fund global clinical development for all-cause ARDS and potentially other respiratory indications.
  • Mesoblast may receive a total of US$505 million pending achievement of pre-commercialization milestones for ARDS indications.
  • Mesoblast may receive additional payments post-commercialization of up to US$750 million based on achieving certain sales milestones and tiered double-digit royalties on product sales.
  • Mesoblast will retain full rights and economics for remestemcel-L for graft versus host disease (GVHD), and Novartis has an option to, if exercised, become the commercial distributor outside of Japan.
  • For most non-respiratory indications, the parties may co-fund development and commercialization on a 50:50 profit-share basis.
  • Mesoblast will be responsible for clinical and commercial manufacturing and Novartis will purchase commercial product under agreed pricing terms. Novartis will reimburse Mesoblast up to US$50 million on the achievement of certain milestones related to the successful


As you can see from the terms above, there is potential for Novartis to partner with Mesoblast for non-respiratory indications such as graft versus host disease (GVHD). 

It’s been a tough couple of months for Mesoblast and it’s die hard shareholders but all that could be about to change…

Between now and the end of January, Mesoblast will reveal the results of not one, but three phase three clinical trials. In an earlier post I discussed them at length. You can read that post here:

Fasten your seatbelts!



About remestemcel-L  

Remestemcel-L, is an investigational therapy comprising of culture-expanded mesenchymal stromal cells derived from the bone marrow of an unrelated donor.

The treatment is thought to have immunomodulatory properties to counteract the cytokine storms that are implicated in various inflammatory conditions by down-regulating the production of pro-inflammatory cytokines, increasing production of anti-inflammatory cytokines, and enabling recruitment of naturally occurring anti-inflammatory cells to involved tissues.

In the Phase III study in COVID-19-related ARDS, remestemcel-L is administered as two infusions of 2×106 MSC/kg given three to four days apart. The administration of remestemcel-L for the treatment of all-cause ARDS could be the subject of further exploration. 

About acute respiratory distress syndrome  

Acute respiratory distress syndrome (ARDS) is a clinical syndrome that represents a final common pathway for lung injury caused by a variety of factors including bacterial and viral infection (including COVID-19). 

It is characterized by life threatening hypoxemia and bilateral pulmonary infiltrates without evidence of cardiac failure. Mortality often exceeds 40%. Aside from appropriate ventilator and fluid management, no therapies have been shown to consistently improve survival in randomized clinical trials. 






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