The Mesoblast Ltd [ASX:MSB] share price has been absolutely hammered today, trading 32.63% lower at time of writing.
The result comes as the company shared some disheartening news. The trial of its remestemcel-L therapy has effectively been brought to an early end after failing to meet key endpoints.
That’s bad news for shareholders, and bad news for people suffering from COVID. Mesoblast had been hoping to use the drug to treat acute respiratory distress syndrome (ARDS) — the leading cause of death in COVID patients.
Let’s take a closer look at the details.
Failed to live up to the hype
According to Mesoblast, the trial has failed to meet its primary endpoint: A 43% reduction in mortality rates over 30 days. A lofty goal that was set after the pilot data from earlier testing set a very high benchmark.
However, the Data Safety Monitoring Board (DSMB) overseeing the trial has intervened, calling for an end to the trial, which would have involved 300 patients. It has recommended that the 223 patients who have already started the treatment follow up as planned, but that the rest won’t receive remestemcel-L.
It’s a huge blow for Mesoblast and its shareholders, effectively rendering all the company’s hard work up to this point worthless.
Granted, it isn’t giving up just yet, noting that it will be exploring options for alternative studies:
‘Notably, the trial has not yet accrued data on the secondary endpoints, which include days alive off mechanical ventilation at 60 days post randomization, overall survival, days in intensive care, duration of hospitalization, and cardiac, neurological, and pulmonary organ damage.
‘Additionally, measures of circulating cytokines and inflammatory markers will be evaluated. None of these were included in the interim analysis. As such, the trial will evaluate all 223 enrolled patients through 60 days of follow-up to study potential treatment effects on these outcomes. Mesoblast and Novartis will both analyse these results to identify meaningful clinical outcomes that may guide decisions on the development program for remestemcel-L in non-COVID ARDS.’
Whether this will bear fruit, though, is highly unclear. And if this initial assessment is any guide, any further developments may prove just as folly.
What’s next for Mesoblast share price?
The decision for Mesoblast now is whether or not to salvage any upside from this result. Devoting more time and money to remestemcel-L may just end up costing the company more in the long run.
So, while management are clearly eager to try and extract some value from their efforts, investors will need to decide if they are on board with that plan. Because as any seasoned biotech investor can tell you, sometimes you just have to cut your losses.
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For Money Morning