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Novartis invests $1.35 billion into a drug also designed for COVID-19

A compassionate use program that included 12 ARDS patients associated with COVID-19 was launched in March. The patients were in mechanical ventilation. The therapy was associated with a survival rate of 83%. This supported the launch of the Phase III study of Remestemcel-L, which is expected to be conducted in early 2021. Novartis invested $1.35 billion in Remestemcel-L.



Novartis has signed an exclusive worldwide licensing and collaboration agreement with Mesoblast, a biotech company based in Australia, to develop, market, and manufacture remestemcel-L, an experimental drug for acute respiratory distress syndrome (ARDS), even when linked to COVID-19.

The Swiss company plans to start a Phase III trial in ARDS not related to COVID-19 shortly after the closing of the agreement. The drug is currently being evaluated in a Phase III study in ARDS related to COVID-19.

Read more about the new drug in which Novartis invested $1.35 billion and find the most important business news in the world with the Born2Invest mobile app.

The new drug could also help the immune system fight the new coronavirus

Remestemcel-L consists of mesenchymal expanded stromal cells in culture, derived from the bone marrow of a donor. Companies believe that it has immunomodulatory properties able to counteract the overactive immune reaction known as cytokine storm, linked to COVID-19 and other inflammatory conditions. Scientists who developed it believe that it regulates the production of pro-inflammatory cytokines and increases the production of anti-inflammatory cytokines.

Under the terms of the agreement, Novartis acquires the rights of remestemcel-L for ARDS. Initially, Mesoblast will be paid $25 million in advance and another $25 million will be invested for the purchase of Mesoblast shares along with additional pre-commercial milestone payments that could amount to $505 million and post-commercial milestones of up to $750 million.

They are also eligible for royalties. Novartis will offer support for commercial production scale-up. The biotech company also has the ability to distribute the transplant disease drug against the host (English Graft versus Host Disease, hence the acronym GvHD)) outside of Japan. Both companies have the right to co-finance the development and marketing for other non respiratory indications.

In addition, Novartis will reimburse Mesoblast up to $50 million for specific milestones associated with next-generation manufacturing processes using its proprietary media and three-dimensional bioreactors. Novartis will take care of all capital expenditures necessary to meet the increased production capacity.

“We believe Novartis is uniquely positioned to advance this important new potential therapy,” said John Tsai, head of Global Drug Development and chief medical officer at Novartis. “Novartis is committed and has proven to be successful with cell-based therapies and the transformation of treatments for a spectrum of respiratory diseases.

He continued: “This makes Remestemcel-L an important addition to our pipeline. It has the potential to be the first treatment for the most critical ARDS patients and gives us the opportunity to apply years of specialist experience directly to the savings work.”

A compassionate use program that included 12 ARDS patients associated with COVID-19 was launched in March. The patients were in mechanical ventilation. The therapy was associated with a survival rate of 83%. This supported the launch of the Phase III study, which is evaluating 300 patients and was conducted in collaboration with the Cardiothoracic Surgical Network. The study is expected to be conducted in early 2021.

After the end of the trial, Novartis and Mesoblast plan to work together to initiate a Phase III trial of the drug in non-coVID-19 related ARDS.

Unlike CAR-T, remestemcel-L should not be customized for each patient, which should reduce production time and costs.

“Our collaboration with Novartis will help ensure that remestemcel-L can become available to the many patients with ARDS, the leading cause of mortality in COVID-19 infection,” said Silviu Itescu, CEO of Mesoblast. “This agreement is in line with our corporate strategy to collaborate and collaborate with the world’s leading pharmaceutical companies to maximize market access for our innovative cellular drugs.”


(Featured image by jniittymaa0 via Pixabay)

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Anthony Donaghue writes about science and technology. Keeping abreast of the latest tech developments in various sectors, he has a keen interest on startups, especially inside and outside of Silicon Valley. From time to time, he also covers agritech and biotech, as well as consumer electronics, IT, AI, and fintech, among others. He has also written about IPOs, cannabis, and investing.