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These 2 ASX medical shares are on the rise after major announcements

ASX medical shares have been in the spotlight lately, with 2 dropping major announcements yesterday. Mesoblast Limited (ASX: MSB) and Mayne Pharma Group Ltd (ASX: MYX) both saw share price bounces yesterday following their announcements, which look set to expand distribution of their products. 

What did Mesoblast announce?

Mesoblast announced its stem cell medicine Remestemcel-L will be available for compassionate use to treat children with COVID-19 in the United States. The product will be made available under an expanded access protocol, which allows patients with an immediately life threatening condition to gain access to an investigational medical product. 

Remestemcel-L will be used to treat COVID-19-infected children with complications of multisystem inflammatory syndrome (MIS). It has previously been used in children with graft versus host disease which provides a body of safety and efficacy data. This data suggested the product might be of therapeutic benefit in patients with MIS. The use of the treatment in children extends the potential application of this stem cell therapy beyond adults with severe acute respiratory distress syndrome. 

The Mesoblast share price was up over 11% yesterday following the announcement, although today it has dropped back by 3.47% to $3.62 per share at the time of writing. Recent rises in the Mesoblast share price have led to it joining the S&P/ASX 200 Index (ASX: XJO) in the most recent quarterly rebalance. The company reported in June that Remestemcel-L led to improved outcomes in patients with inflammatory lung diseases. 

What did Mayne Pharma announce?

Yesterday, Mayne Pharma announced a new supply agreement for US generic oral contraceptive products. The agreement covers 13 products, including 5 not previously marketed by Mayne Pharma. Four of the additional products are FDA approved and include generic equivalents of the 2 highest prescribed oral contraceptive products in the US. 

Mayne Pharma reports that the annual US market sales for the 5 new products are US$500 million. Investors approved of the deal, sending the Mayne Pharma share price nearly 4% higher yesterday and another 2.82% higher today to 44 cents per share. 

Commenting on the deal, CEO Scott Richards said: “this transaction expands our women’s health portfolio and secures supply on more favourable terms.”

Mayne has been seeking to optimise its supply network to improve product costs and add complementary generic products. This latest agreement ticks both those boxes. 

Foolish takeaway

ASX medical shares Mesoblast and Mayne Pharma are making promising advancements in their respective markets, which investors are betting will lead to long-term results. 

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Motley Fool contributor Kate O'Brien owns shares of Mayne Pharma Group Limited. 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 Scott Phillips.

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Kate O'Brien