Mesoblast Share Price Rockets 37% Higher on FDA Vote (ASX:MSB)

It’s been one hell of a roller coaster of emotions for Mesoblast Ltd [ASX:MSB] this week.

After the MSB share price experienced a steady rise for much of August, the stock plummeted on Tuesday. Driven lower as news of an upcoming FDA vote was made apparent.

It was a fairly bizarre outcome though.

As far as we could tell, this vote was another positive step for Mesoblast. A favourable outcome would put them well on track to start marketing their key drug RYONCIL.

The market was apparently far more sceptical it seemed.

Today though, after a brief trading halt, Mesoblast has officially delivered the good news. With nine out of 10 of this FDA committee approving RYONCIL for treating children with steroid-refractory acute graft-versus-host disease (SR-aGVHD).

A condition that afflicts patients after their body rejects a transplant. And with no currently available treatment, Mesoblast may finally have a much-needed breakthrough…

One hurdle passed, but more to come

Now, for clarification, this vote was handled by Oncologic Drugs Advisory Committee (ODAC). A key group that assists the FDA.

In that regard, today’s announcement is not an endorsement from the key agency itself.

Mesoblast will still need to wait ‘til 30 September for the FDA’s ultimate verdict. Which, if greenlit, will mean the company can start marketing their drug in the US.

So, if all goes to plan, Mesoblast could launch RYONCIL in the US before the year is out. A goal that is very much on their radar.

The good news is that this decision from the ODAC will help sway FDA’s verdict. Which is precisely why the share price has shot up today.

More importantly, the fact that nine out of 10 the members voted in favour of the drug is a ringing endorsement. Especially when it comes to such a precarious and sensitive topic such as children’s well-being.

As paediatric transplant expert Dr Joanne Kurtzberg added:

This devastating condition [SR-aGVHD] has an extremely poor prognosis and there are no FDA-approved options for children under the age of 12. The clinical studies I have directed have demonstrated the potential for this treatment to fill a significant unmet medical need.

Here’s hoping the patients can get the result that they need.

Because today at least, shareholders got the result that they wanted.

Appetite for well-being

Ultimately, no one knows where Mesoblast could head next.

There is every chance they could become the next CSL. A modern medicine success story listed right here on the ASX.

Or, they could stumble at the final hurdle and fall into obscurity.

It really is just that divisive. Though right now, you can’t deny the enthusiasm around the broader biotech sector.

Ever since this pandemic swept the world, biotech stocks have been getting a lot of attention. Even the ones that aren’t actively trying to cure COVID-19.

That’s certainly not surprising, but it is something investors need to be aware of.

You have to be careful of the extreme volatility and risk these stocks present. Because as Mesoblast’s week of trading has shown, things can move damn quickly. And not always in the direction shareholders want.

So, if you’re looking for incredible potential — but with a little more substance — then you should check out our ‘high-value small-caps’ rundown. A report that details some fantastic stocks that are looking poised for a post-pandemic boom.

Get your free copy of the full report, right here.

Regards,

Ryan Clarkson-Ledward,
For Money Morning


Ryan Clarkson-Ledward is one of Money Morning’s analysts.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities.

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