Blast off! Mesoblast share price surging 60%

Mesoblast shares are skyrocketing today.

| More on:
Shot of a young scientist using a digital tablet while working in a lab.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Mesoblast Ltd (ASX: MSB) share price shot out of the gates on Tuesday, opening at 80 cents per share and rising to an intraday peak of 88.5 cents within the first two hours of trading.

The intraday high represents a 59.45% gain over the closing price of 55.5 cents last Thursday, prior to the market shutdown for the Easter long weekend.

At the time of writing, the Mesoblast share price has settled back to 87 cents per share.

What's the news from Mesoblast today?

The only news from the biotech company today is a non-price-sensitive announcement relating to a change in substantial holding.

That's for United States investor Gregory George and G to the Fourth Investments.

The notice advised a collective stake increase from 10.23% to 11.99% last Thursday.

There's no other news today.

However, Mesoblast did have a big announcement last week that sent its share price soaring.

Let's recap.

What's pushing the Mesoblast share price higher?

Mesoblast requested a pause in trading last Tuesday morning before releasing some big news.

The company announced that the US Food and Drug Administration (FDA) had informed it that after reviewing the clinical data from its Phase 3 study, there appeared to be sufficient evidence to support Mesoblast's submission for remestemcel-L to treat kids with steroid-refractory acute graft versus host disease (SR-aGVHD).

Remestemcel-L is being developed for inflammatory diseases in children and adults, including steroid-refractory acute graft versus host disease, and biologic-resistant inflammatory bowel disease.

CEO Silviu Itescu said the company would now refile its Biologics License Application (BLA). This will happen in the June quarter after the company addresses outstanding product characterisation matters.

Silviu said:

The responses and guidance from FDA are clear and provide us with a high level of confidence to refile our BLA for remestemcel-L in children with SR-aGVHD.

What is remestemcel-L?

This is the drug that Mesoblast has been trying to get approved for the past three-and-a-half years.

There was much excitement in mid-2020 while Mesoblast was awaiting the FDA's first decision on its flagship drug, also known as Ryoncil.

This can be seen in the Meosblast share price chart below.

Created with Highcharts 11.4.3Mesoblast PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Remestemcel-L has FDA Fast Track designation, a process to facilitate the development and speedy
review of therapies for serious conditions that fill unmet medical needs.

It also has Priority Review designation, which is given to drugs that treat a serious condition and provide a significant improvement in safety or effectiveness over existing treatments.

Survival outcomes have not improved for 20 years for children or adults with the most severe forms of SR-aGVHD.

As you can see, the Mesoblast share price was trading above $5 per share back in those days.

The market was shocked when the FDA knocked back the application in October 2020.

Mesoblast worked with the FDA for two years to address the issues. It resubmitted its Biologics License Application (BLA) resubmission for remestemcel-L in the treatment of children in March 2023.

But the FDA knocked it back again in August. The Mesoblast share price spiralled down almost 60% after the FDA said it needed more data to support marketing approval for remestemcel-L for kids.

Mesoblast then sat down with the FDA in what is called a Type A meeting.

The FDA advised the company that the key remaining issue for pediatric approval was providing further evidence that the potency assay will assure the consistent efficacy of the commercial product.

Mesoblast later provided the FDA with new data from a second potency assay.

The company said:

The new data show that the RYONCIL product made with the current manufacturing process that
has undergone successful inspection by FDA, demonstrates greater potency than the earlier
generation product, providing context to its greater impact on survival.

Mesoblast has been waiting for the FDA to respond to the new data ever since.

Mesoblast share price snapshot

The Mesoblast share price is down 13.3% over the past 12 months.

However, in the year to date, it is up 174%.

Motley Fool contributor Bronwyn Allen has positions in Mesoblast. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

a biomedical researcher sits at his desk with his hand on his chin, thinking and giving a small smile with a microscope next to him and an array of test tubes and beackers behind him on shelves in a well-lit bright office.
Healthcare Shares

Broker says this ASX 200 biotech stock is a top buy

Let's see what Bell Potter is saying about this biotech.

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

Why CSL shares are a buy today despite the looming Trump tariffs

A leading expert believes CSL shares are still trading for a bargain today. Here's why.

Read more »

A businesswoman pulls her glasses down in shock to look at the bad news on her computer.
Healthcare Shares

Why did the Telix share price just crash 16%?

Investors are sending the Telix share price plunging today. But why?

Read more »

Broker analysing the share price.
Healthcare Shares

Expert: 2 ASX healthcare stocks to avoid before reporting season

Not all healthcare stocks are created equal.

Read more »

A group of people in a corporate setting do a collective high five.
Healthcare Shares

Should I buy Pro Medicus or CSL shares ahead of earnings season?

The ASX healthcare sector may be currently undervalued.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Healthcare Shares

Why Mesoblast shares can keep storming higher

More big returns could be on the way for buyers of this high risk stock according to Bell Potter.

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

The Mesoblast share price just rocketed 38%! Here's why

ASX investors just sent the Mesoblast share price up 38%. But why?

Read more »

couple having a happy discussion with a banker
Healthcare Shares

Expert: 4 ASX healthcare stocks to buy ahead of reporting season

Could these ASX healthcare stocks be good additions to your portfolio?

Read more »