The Mesoblast Limited (ASX: MSB) share price has been amongst the best performers on the All Ordinaries index on Tuesday.
In morning trade the allogeneic cellular medicines developer's shares surged a sizeable 17% higher to $1.70 following a positive update.
What did Mesoblast announce?
This morning Mesoblast announced that it has entered into a strategic partnership with global pain management leader Grünenthal to develop and commercialise MPC-06-ID.
According to the release, MPC-06-ID is a Phase III allogeneic cell therapy candidate for the treatment of chronic low back pain due to degenerative disc disease in patients that have exhausted conservative treatment options.
Under the partnership, Grünenthal will have exclusive commercialisation rights to MPC-06-ID for Europe and Latin America.
In exchange for this, Mesoblast will receive up to US$150 million in upfront and milestone payments prior to product launch, as well as further commercialisation milestone payments.
These payments include commitments up to US$45 million within the first year comprising US$15 million on signing, US$20 million on receiving regulatory approval to begin a confirmatory Phase III trial in Europe, and US$10 million on certain clinical and manufacturing outcomes.
But it doesn't stop there. The release advises that cumulative milestone payments could exceed US$1 billion depending on the final outcome of Phase III studies and patient adoption. Mesoblast will also receive tiered double-digit royalties on product sales.
What's next?
Mesoblast is currently completing a Phase III trial for MPC-06-ID in the United States, with the results due in 2020.
In a previous U.S. Phase II trial, the company demonstrated that a single intra-discal injection of MPC-06-ID using a unit dose of 6 million allogeneic mesenchymal precursor cells resulted in meaningful and durable improvements for patients in pain intensity and functionality for at least three years.
Mesoblast's chief executive, Dr Silviu Itescu, said: "We are very pleased to enter into this strategic partnership with Grünenthal, a world leader in innovative approaches to pain management. Together with Grünenthal we plan to bring an important new class of therapy for pain management to the many patients suffering with degenerative disc disease. This partnership is in line with our corporate strategy to team up with best in category commercial leaders to maximise market access for our innovative cellular medicines for the treatment of patients suffering from debilitating or life-threatening inflammatory conditions."
This looks to be a very good deal for Mesoblast and I can't say I'm surprised to see its shares charge higher today along with fellow high-flyers iSignthis Ltd (ASX: ISX) and Paradigm Biopharmaceuticals Ltd (ASX: PAR).
