Shares in regenerative medicine business Mesoblast limited (ASX: MSB) are locked in a trading halt this afternoon with the company set to announce “material corporate developments with respect to certain assets of the company”.

Although the company is keeping its cards close to its chest for investors this looks to present two distinct possible outcomes. One good. One bad. The optimists will expect a partnership deal to be announced with a major pharmaceutical partner to help the company trial and commercialise its regenerative medicine products for either back pain or rheumatoid arthritis (RA).

The company is expecting the first phase III interim results for its back pain trials in Q4 2016 and any news that it has secured a partner in these trials is sure to be cheered by investors. While its RA program is also searching for a partner with trials currently in the Phase II stage. The company is expected to provide an update on the progress of its RA trial in Q3 2016.

It has also long been working with US pharmaceutical giant Teva on its regenerative medicine treatment for chronic heart failure (CHF) where trials are currently at an early Phase III stage.

However, the pessimists may expect that Teva has gotten cold feet over the potential of the program, with several analysts getting cold feet themselves after the company provided a disappointing quarterly update last month.

As a result even its cheerleader-in-chief and US IPO bookrunner JP Morgan downgraded its rating to neutral from buy, with other analysts questioning why another partner named Celgene had not invested further into Mesoblast.

In May I decided to dump a small holding in the business largely on valuation grounds and the disappointing quarterly update as it remains on a whopping valuation, with plenty of risk to the downside. If the news is related to Teva pulling back in its partnership I expect the share price will cop an almighty hiding when it resumes trade.

However, if the company does deliver positive partnership or trial data news in the next few days I will be left regretting that decision as the share price is likely to rocket.

Elsewhere in the biotech space liver cancer treatment specialist Sirtex Medical Limtied (ASX: SRX) has released revised guidance for dose sales growth in the region of 15%-17% over FY16. This is down on prior guidance of at least 19.8%, although its core US market is still expected to deliver growth in the region of 18%-20%. The stock is down 7.6% to $29.10 as investors react to the announcement.

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Motley Fool contributor Tom Richardson owns shares of Sirtex Medical Limited.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.