The Mesoblast limited (ASX: MSB) share price has started the day strongly and is racing materially higher.
At the time of writing, the biotechnology company's shares are up 12% to $4.62. But at one stage they were up as much as 19% to $4.90.
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Why is the Mesoblast share price racing higher?
Investors have been buying the company's shares this morning after the release of a positive announcement relating to its remestemcel-L product.
According to the release, the United States Food and Drug Administration (FDA) has granted Fast Track designation for remestemcel-L in the treatment of acute respiratory distress syndrome (ARDS) due to COVID-19 infection.
Fast Track designation is granted if a therapy demonstrates the potential to address unmet medical needs for a serious or life-threatening disease. Given that ARDS is the primary cause of death in patients with COVID-19, it wasn't a surprise to see the FDA grant it this designation.
The company notes that the clinical data provided to the FDA included results from a pilot study of remestemcel-L under emergency compassionate use at New York's Mt Sinai Hospital in March-April this year.
In this study, nine of 12 ventilator-dependent patients with moderate to severe COVID-19 ARDS were successfully discharged from hospital a median of 10 days after receiving two intravenous doses of remestemcel-L.
A larger phase 3 trial with up to 300 ventilator-dependent patients is ongoing and is approximately two-thirds enrolled.
Two interim analyses have been performed by the independent Data Safety Monitoring Board (DSMB), after 90 and 135 patients were enrolled. Following this analysis, the DSMB recommended that the trial continue as planned.
A third and final interim analysis is planned to be performed by the DSMB when 180 patients have completed 30 days of follow-up.
One company which appears optimistic on the treatment is Novartis. The two parties recently entered into a license and collaboration agreement for the development, manufacture, and commercialisation of remestemcel-L, with an initial focus on the treatment of ARDS, including COVID-19 ARDS.
The deal saw Novartis pay US$50 million up front and agree to pay upwards of US$1.25 billion in milestone payments depending on its success.
