Sunday feature: This Aussie company's share price is up 900% this year

Published Dec 21, 2024, 5:00 PM

Guest: Mesoblast founder Silviu Itescu

Original air date: March 9, 2022

ASX-listed biotech Mesoblast is spoken about a lot on Fear and Greed due to its extremely volatile share price. This is largely tied to some big medical breakthroughs they've been working on for a long time.

 

Founder Silviu Itescu discusses the exhaustive and expensive process behind getting critical new drugs developed, tested and approved and the possible announcements that are coming.

Update: Mesoblast's share price increased by 50% in just one day this week after the US FDA gave the green light to another one of its treatments. 

Welcome to Fear and Greed Sunday feature. Oh, Michael Thompson, Now you're going to have to indulge me a little bit on this one because we have aired this interview before, but it's getting another run today for very good reason because the share price a biotechnology company, miso Blast, this week shot up by fifty percent in just one day after the US Food and Drug Administration gave the green light to a cell therapy treatment that miso Blast had developed. The treatment will be used for children with a life threatening complication that can occur during bone marrow transplants. Now that one comes after the FDA recognized another treatment back in January, this time for heart disease in newborn babies. It means that the share price of miso Blast is now up nearly nine hundred percent over the last year. Now back in March of twenty twenty two, so we're going back two and a half years now. Sean Aylmer spoke to Sylvie Etescu, who is the founder and CEO of miso Blast, about the many hurdles, many many hurdles that a biotech company like Mesoblast has to clear in order to bring a product to market. It is a fascinating chat and a great insight into the way a company like this operates. I hope you enjoy it.

Welcome to the Fear and Greed Daily Interview. I'm Sean Aelma. Regular listeners would have heard me mention Misoblast many times before. The ASX listed biotech company has a very volatile share price, largely because it's tied to medical research, the approval processes of the US Food and Drug Administration, and deals with other pharmaceutical companies. But it's a fascinating company doing innovative research into stem cells and trying to navigate the very challenging, very expensive process of bringing those products to market. Silvia with Tescu is the founder and CEO of Misoblast, Sylvia. Welcome to Fear and Greed.

Thanks for having me so.

Firstly, can you give our listeners a one oh one on Mesoblast the products you're developing, where they're up to in plain English, of course, which is the tricken sometimes in the biotech sphere.

Certainly, we're developing products using a platform technology that allows us to develop off the shelf therapeutics vials that contain cells. We understand how these cells are made, they're highly scalable into large quantities, and we have a supply chain that from manufacturing we can ship and provide them to hospitals to physicians in a regulated manner. We understand how these cells work. They target severe inflammatory conditions, and we've been able to generate large clinical data sets as we progress towards our first product approvals, particularly in the US, which is the largest market and the largest unmet need. But we already have a first product approved then being sold in Japan. So this is the beginning of a whole new industry. It's been a long time coming, but we're very confident that we're going to have more products available using our proprietary scalable technology. We're the largest and most advanced cell therapy company in the world, and I think it's going to be an exciting the next couple of years.

Okay, So the competitive advantage of mesoblast is that scalability and process is that right.

There are multiple advantages, but certainly scalability and being able to create a uniform process that ensures that each product meets the exact same requirements as the next product, so that we can provide with certainty outcomes to patients. That's a major advantage. But secondly, we have over one thousand patents and the other big commercial advantages that we have very strong pattern position intellectual property profile that creates a barrier to entry into this space. And the combination of patterns plus a scalable technology is a very powerful combination, together with many years of phase three clinical trials that demonstrate to the clinical value and the success of the technology.

Okay, so some of the illnesses that you are addressing, what are they? How would most of us know them?

Yeah? So I've said that core to the mechanism of them celves is the ability to tackle severe inflammation. So we are targeting diseases where inflammation is a primary driver of a bad outcome, including death, and where other traditional medicines pills, antibodies don't work very well. So a first disease is a very severe inflammatory condition called graph versus host disease caused by a bone mirror transplant in patients who are otherwise cured of the underlying leukemia with drugs, but need to have their bone mirror rebuilt. And when you use another person's bone marrow to rebuild your own, it often thinks your foreign it attacks your body and creates this graph versus host disease that has up to a ninety percent fatality rate within a couple of months. So other drugs have failed miserably, and we've particularly in children where there is nothing approved. We have shown through multiple studies that we get a very substantial curative rate and survival benefit in children who have up to ninety percent mortality from this devastating condition, and so we completed a phase three program. We presented the data to the FDA about a year ago. The experts who were asked by the FDA to appine on the results voted nine to one that the results were sufficient for approval, and the FDA delayed us at that point and has asked us to just improve certain aspects of the manufacturing process called potency essays, that we've now put in place, and we expect to be going back to the FDA shortly to present the new data which we think will be sufficient to support moving forward towards approval. That same product, as I said earlier, has already been approved and is being sold in Japan for the last four years. Very safe, very effective, and I think that provides a strong impetus to how this product and insight as to how this product would be received in the US market and hopefully would be available to children with as devastating complication beyond grab mississost disease. We're also targeting inflammatory conditions that affect back pain, for example, that destroys the intravertibral disc and causes severe pain and suffering in large numbers of patients. In fact, inflammatory back pain is the number one cause of opioid prescriptions, accounts for fifty percent of prescriptions in the US market and likely to be a major cause of opioid usage in Australia as well. And a single injection of ourselves in phase three trials has demonstrated very substantial reduction in pain for twelve months, twenty four months, and even up to thirty six months without any adverse events. So we again spoken extensively with the US FDA, who reviewed our data and agreed with us about how a second study, if confirmatory of the first, would likely lead to FDA approval, and we're embarking on that program to target against those patients with severe inflammation of the disc who failed all existing alternative therapies in order to prevent the need to progress towards something much more invasive like surgery, or to avoid the opioid overdose risks that come along with this kind of devastating problem.

Okay, I'm going to get confused here. Is that rema stem cell, remy stem.

Cell is our lead product for graphs host disease and also for inflammatory bowel disease that involves the colon ulshrip colliders and crows disease. The product for the back is called rex lemistro cell, So that's our second lead product, and that's being developed for both back and for heart disease. But you are quite correct that remy stem cell, the lead product that would developing for GVHD, also is being developed for a second indication, which is inflammation of the colon from in ulcer of colidis and Crohn's disease. And we just announced some pretty exciting data about a week ago, data that was generated in a study at Cleveland Clinic by one of the world's leading gastroentrology surgeons in this field, Dr Amy Leitner, presented data at the major European Congress showing that a single injection of remy stem cell into the inflamed colon in patients with ulcter of coliitis or Crow's disease resulted within six weeks in remission, which is a very very exciting finding.

I have family members who have had Croane's disease. It's not a good thing.

It's a terrible disease, and particularly in those patients who have not responded to other anti inflammatory drugs out there, including the monoclonal antibodies against T andF. For those patients if they have continued inflammation of the large bowl on the alternatives collected me which is a terrible outcome. And so we are very very focused on this as a potential next indication for remy stem cell and we'll be updating the market in short order with more data from that study, and we expect to be then moving to have discussions with the FDA around further approval potentially after GVHD in the area for remy stem cell in the area of inflammatory bowel disease.

Stay with me, Sylvie will be back in a minute. My guest this morning is Sylvie Etescu, founder and CEO of Miso Blast. Okay, talking to you. It's exciting thinking about what you can do and hopefully this can be proven the process of actually bringing to market the phase one, two, three, four trials in the US, I mean, how long does that take? How expensive is it? I'm trying to get my head around that sort of information.

Well, look, this is a great question, and I think it's important for investors in the biotech space to have a reality check and a view on the time and the cost of drug development. Traditionally, small molecules developed by the pharmaceutical industry cost up to two billion dollars two billion per successful new drug launched, so it's very expensive and very few companies it's successful in doing it. I think we've raised a substantial amount of capital and we now have the potential to bring four new indications to the marketplace, which is a We think that we've done it in a relatively efficient way. But time is something that is you can't get around. Time is the requirement by the regulatory bodies like the FDA or like the TG in Australia to require you to do large phase three trials and they just take two, three, four years sometimes depending on the indications and the size, and there's no substitute for there's no short circuits, and I think people need to understand that things look promising early on, but then there's often a fair amount of time that goes by when you don't hear anything until the trials finish. And the strength of mesa Blast is that we have a platform technology and we're not a one trick pony, and therefore we have four programs in phase three. With GVHD, we've completed Phase three and that means that for investors who are knowledgeable and understand the risks around single product companies, we represent the ability to move into commercial sphere with multiple products, with potentially multiple revenue streams, and that's how we're building mesa Blast and we hope to be there in the very short term in terms of revenues from our first approved product in the US.

Do you ever get frustrated? You probably need the market because you need to raise money. It's a very costly business developing drugs. As you just mentioned, you're spreading at risk somewhat because your platform. Is it though, frustrating about the ups and downs of the share price at times simply on news which to you may well be expected, but of course to investors who are waiting on every word that Missoblast mentions. You know it can send your share price up and down twenty or thirty percent. Is it frustrating or is it just part of the gig look.

I've learned to accept it as part of the gig. As you say, the frustration comes more from a lack of understanding of the detailed pathway to approval and revenues and that just comes with success. Really, but I think you know, share price is not something that I should be focusing on. My focus is on deliverables, on approvals, on products in the marketplace, and revenues. That's really what I focus most of my time on. And the vagaries of the market will look after themselves when we deliver and as we deliver, and I firmly believe that.

Sylvia, thank you for talking to Fear and Greed.

Thank you very much, Sylvia Tescue.

Founder and CEO of Miso Blast. This is a Fear and Greed daily interview. Join me every morning for the full Fear and Greed podcast with all the business news you need to know. I'm sure Elma enjoy your day.