Mesoblast Ltd (ASX: MSB) shares are surging higher on Friday after its Ryoncil drug passed a key milestone in the massive US market.
The company's stock was the second-best performer on the S&P/ASX 200 Index (ASX: XJO) on Friday, up 14.2% at $2.90 in early trade.
Mesoblast told the ASX in an announcement on Friday morning that Ryoncil's "J-Code" from the US Medicare and Medicaid Services (CMS) had become active for billing and reimbursement from October 1.
As the company explained:
Formal recognition by CMS is a significant milestone for Ryoncil as the product becomes easier to bill and pay for. The new permanent J-Code, J3402, provides a standardized, clear, permanent, and specific billing pathway for Ryoncil by Medicaid, facilitating reimbursement and broader patient access for this important therapy. Additionally, commercial payers look to the permanent J-code to update their coverage systems.
Mesoblast said Ryoncil was the first mesenchymal stromal cell product approved by the US Food and Drug Administration for any indication, and the only treatment approved for children under 12 for steroid-refractory acute graft-versus-host disease (SR-aGvHD).
Mesoblast Chief Executive Dr Silviu Itescu said the J-Code becoming active was a significant milestone for the company.
A permanent J-Code is a critical element for successful commercialization of rare disease products, ensuring more efficient billing and enabling timely access to Ryoncil for children with life-threatening SR-aGvHD.
Image source: Getty Images
US tariffs not an issue
Mesoblast last week said its cell therapy products would not be subject to the 100% tariff on pharmaceuticals announced by US President Donald Trump, as they were manufactured in the US.
As documented in the company's Biologic License Application, Ryoncil is designated a 'US country of origin' product in line with US FDA and customer regulatory guidance. Mesoblast continues to ensure that all its products, whether for SR-aGvHD, chronic heart failure, chronic back pain, or other inflammatory indications, are manufactured from US donors at US sites.
Graft versus host disease is a common complication of some types of stem cell therapy treatment, and while it is treatable with steroids, for a large proportion of patients, this treatment is not effective.
Mesoblast shareholders are sitting on significant gains this year, with the shares improving from lows of $1.25 to as high as $2.94 on Friday morning.
The company in August reported its revenue from stem cell therapy products was US$17.2 million, up 191% for the year, with US$11.3 million coming from sales of Ryoncil.
Mesoblast said at the time that the total addressable market for SR-aGvHD was about $1 billion.
