Mesoblast Ltd (ASX: MSB) shares are having a strong session.
In early afternoon trade, the biotechnology company's shares are up 5% to 42 cents.
Though, this doesn't change much on a 12-month basis. Since this time last year, the company's shares are down by approximately 66%.
Why are Mesoblast shares rising today?
Mesoblast's shares have been sold off again this year due to the company being denied approval for its stem cell therapies by the US Food and Drug Administration (FDA).
However, commentary at its annual general meeting this morning suggests that it is progressing well with its aim of satisfying the regulator's doubts.
Commenting on the FDA verdict, its chair Joseph R. Swedish said:
A huge amount was accomplished during the year despite the disappointment of a further delay in gaining approval for our lead product candidate, Ryoncil (remestemcel-L), in the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD)- a devastating and life-threatening complication of a bone marrow transplant.
But there's reason to be upbeat, with the company reporting positive interactions with the US FDA. This could be giving Mesoblast shares a boost today. Swedish commented:
The Mesoblast team continues to have very constructive interactions with United States Food and Drug Administration (FDA) in regard to RYONCIL for pediatric SR-aGVHD, including the recent Type A meeting, and understand the remaining issues that need to be addressed in order to gain FDA approval for RYONCIL as the first allogeneic mesenchymal stromal cell product in the United States. Additional potency assay work is being completed for presentation to the FDA, and last week we announced an agreement with the Blood and Marrow Transplant Clinical Trials Network to partner on a Phase 3 pivotal trial of RYONCIL in the treatment of adults with SR-aGVHD.
It has also been granted a key designation for its next "blockbuster" product. The chair adds:
Indeed, as evidence for management's continued positive interactions with FDA, I am pleased to say that FDA granted Regenerative Medicine Advanced Therapy designation for our next generation potential blockbuster product rexlemestrocel-L for treatment of chronic low back pain associated with disc degeneration.
All in all, there appears to be reason to hope for Mesoblast's long-suffering shareholders. Though, it is worth remembering that we have been here many times before, so there's no guarantee that outcomes will be different this time.
