Novartis, Mesoblast in $1.35-Bn Deal for Cell Therapy

By Miranda Greenberg -

November 24, 2020

Novartis has formed an exclusive worldwide license and collaboration agreement, in a deal worth up to $1.355 billion ($50 million upfront and $1.305 billion in milestones and other payments), with Mesoblast, a Melbourne, Australia-based developer of allogeneic cellular medicines, for Mesoblast’s cell therapy for treating acute respiratory distress syndrome (ARDS), including ARDS associated with COVID-19.

Under the license agreement, Novartis will acquire the exclusive worldwide rights to develop, commercialize, and manufacture remestemcel-L for ARDS and will obtain access to a cell-therapy platform with potential applications in severe respiratory conditions and other indications. Novartis will make a $50-million upfront payment, including $25 million in equity. Mesoblast may receive a total of $505 million pending achievement of pre-commercialization milestones for ARDS indications. Mesoblast may also receive additional payments post-commercialization of up to $750 million based on achieving certain sales milestones and tiered double-digit royalties on product sales.

In addition, Novartis will provide certain support to enable commercial manufacturing scale-up. Mesoblast will be responsible for clinical and commercial manufacturing, and Novartis will purchase commercial product under agreed pricing terms. Novartis will reimburse Mesoblast up to $50 million on the achievement of certain milestones related to the successful implementation of Mesoblast’s manufacturing processes using its proprietary media and three-dimensional bioreactors. Novartis will be responsible for any capital expenditure required to meet increased capacity requirements for the manufacture of remestemcel-L.

In addition, Novartis has the option, if exercised, to distribute (outside Japan) remestemcel-L for graft-versus-host disease, a condition that occurs when donor bone marrow or stem cells attack the recipient. Both parties have rights to co-fund development and commercialization of other non-respiratory indications.

Mesoblast’s remestemcel-L is an investigational therapy, which consists of culture-expanded mesenchymal stromal cells derived from the bone marrow of an unrelated donor. It is currently being studied in COVID-19-related ARDS in an ongoing 300-patient Phase III study. Novartis intends to initiate a Phase III study in non-COVID-19-related ARDS after the anticipated closing of the license agreement and successful completion and outcome of the current study.

The closing of the license agreement is subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and certain other conditions.

Source: Novartis and Mesoblast