Major breakthrough for Mesoblast as FDA advisory committee backs Ryoncil

Shares in Mesoblast (ASX: MSB) have spiked after the Oncologic Drugs Advisory Committee (ODAC) voted nine-to-one in favour of recommending the company's graft versus host disease (GvHD) treatment remestemcel-L this morning.

The support from the ODAC, an advisory committed to the US Food and Drug Administration (FDA), is a major coup for Mesoblast which has been developing remestemcel-L for 20 years, and resulted in the company's share price jumping up by 36.3 per cent this afternoon.

It could also put to bed concerns raised by the FDA earlier this week that more work was required on the drug, marketed as "Ryoncil", before approval could be granted.

While the ODAC's recommendations are considered by the FDA, the organisation will make the final decision on whether to approve the drug on its own.

"Steroid-refractory acute graft versus host disease is an area of extreme need, especially in vulnerable children under 12 years old where there is no approved therapy," says Mesoblast chief medical officer Dr Fred Grossman.

"We are very encouraged by today's outcome and are committed to working closely with the FDA as they complete their review of our submission regarding approval of Rynocil for this life-threatening complication of an allogenic bone marrow transplant."

Ryoncil has been accepted for Priority Review by the FDA with an action date of 30 September. If approved, Mesoblast plans to launch the drug in the US in 2020.

On Monday the FDA said while the product has shown apparent immunomodulatory effects in in vitro experiments, its ability to "reduce inflammation as measured by inflammatory biomarkers in humans receiving the product has not been demonstrated".

"A relationship between these in vitro lot release assays and the clinical effectiveness of the product has also not been demonstrated," the FDA said.

The FDA also stated the critical quality attributes (CQA) of the therapy may not be sufficient to ensure the manufacturing process consistently produces remestemcel-L lots of acceptable quality.

"Characterisation of cell-based products in general is complicated by the complex nature of cells relative to other types of drugs, as well as heterogeneity among cells comprising the active ingredient," the FDA says.

"Defining product quality attributes that relate to the product's clinical effectiveness, therefore, may require more extensive product characterisation for cell therapy products than for other biological products."

Remestemcel-L is already sold over the counter in Japan, where it is marketed as 'TEMCELL'. In the fourth quarter Mesoblast generated US$2.1 million in royalties from its Japanese partner from JCR Pharmaceuticals Co. Ltd and made manufacturing payments of US$7.4 million for commercial manufacturing investment to support the potential launch of Ryoncil.

Updated at 2:24pm AEST.

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