The market may be sinking today, but the same cannot be said for the Mesoblast Ltd (ASX: MSB) share price.
In morning trade, the biotech company's shares rocketed as much as 23% to $1.14.
The Mesoblast share price has pulled back a touch since then but remains up 13% to $1.03.
Why is the Mesoblast share price rocketing higher?
Investors have been buying the company's shares after it was given some good news by the United States Food and Drug Administration (FDA).
According to the release, the FDA's Office of Therapeutic Products has accepted the company's Biologics License Application resubmission for remestemcel-L in the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD).
And while this is not an approval, it is a big step in the right direction. Furthermore, the release notes that the FDA considers the resubmission to be a complete response to previous feedback and has set a Prescription Drug User Fee Act (PDUFA) goal date of 2 August.
What is a PDUFA?
My US colleagues cover the PDUFA in detail here. But here's a summary:
The PDUFA's primary goal was to authorize the FDA to collect fees from drugmakers to help pay for the FDA staff needed to review regulatory filings for drugs. But the pharmaceutical industry objected to paying money to the FDA without anything guaranteed in return. The PDUFA helps the FDA by providing the agency with a way to generate money and establishes a set timeline for the agency to make approval decisions.
All in all, this guarantees that Mesoblast will have an answer from the FDA by 2 August for remestemcel-L in the treatment of children with SR-aGVHD.
Mesoblast's Chief Executive, Silviu Itescu, was pleased with the news. He said:
Over the last two years we have worked tirelessly to address the issues previously raised by FDA. We look forward to working closely with the Agency over the review period with the aim to make remestemcel-L available as a therapy for children suffering from SR-aGVHD.
