)
Investors are betting big on Mesoblast's (ASX: MSB, NASDAQ: MESO) yet to be proven treatment for critically ill COVID-19 patients, with the announcement today it has successfully raised US$90 million (AUD$138 million).
Following "remarkable results" from a small sample of ventilator-dependent COVID-19 patients in New York, the Melbourne-based company recently embarked on a Phase 2/3 trial across more than 20 medical centres in the US; a target that has since risen to 30.
Based on bone marrow aspirate, Mesoblast's candidate product remestemcel-L is intravenously infused in patients suffering from acute respiratory distress syndrome (ARDS) - the most common cause of death from COVID-19 infections.
Around 300 patients are expected to participate in the trial over three to four months.
In an institutional placement led by Bell Potter Securities with 43 million new shares on issue, new funds were raised at AUD$3.20 per share, representing a 7 per cent discount to the last MSB trading price.
The sum itself is worth around 20 per cent of its market capitalisation before 20 March, but share values have more or less tripled since then.
Interest in Mesoblast started to build from that date when it was announced to the market that director Donal O'Dwyer had bought more than $100,000 worth of shares, just 10 days after the company had announced its pivot to using its stem cell treatment in COVID-19 lung infections.
Now the group plans to spend a significant portion of net proceeds on scaling up manufacturing of remestemcel-L, with the remainder to go towards working capital and general corporate purposes.
The use of remestemcel-L drastically improved survival rates in the initial trial at Mt Sinai Hospital in New York, at a rate of 83 per cent (10) compared to the average rate of 12 per cent for ventilator-dependent COVID-19 patients in the city.
Three in four patients were able to come off ventilator support within a median of 10 days, compared to a 9 per cent rate for patients treated with standard of care during March and April.
Led by founder and chief executive Silviu Itescu (pictured), Mesoblast previously had a predominant focus on applying its proprietary technology mostly to treat a condition called acute graft versus host disease (aGVHD), which many suffer after receiving a bone marrow transplant (BMT).
But on 10 March the company hypothesised Remestemcel-L would be able to treat what is known as a cytokine storm - a kind of hyperinflammatory syndrome - in the lungs that often occurs with serious Covid-19 cases. This prompted plans for trials across four continents.
"We greatly appreciate the support shown by both our existing investors and new institutional investors, with demand for the placement far exceeding the funds raised," says Itescu.
"We look forward to updating the market as this important COVID-19 ARDS trial progresses and to its completion in the coming months."
Updated at 11:31am AEST on 13 May 2020.
Get our daily business news
Sign up to our free email news updates.
)
)
)
)
)
