Mesoblast Ltd (ASX: MSB) shares are on the rise on Wednesday afternoon.
At the time of writing, the ASX biotechnology stock is up 8% to $2.17, outperforming a relatively flat ASX 200 index.
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Why are Mesoblast shares rising today?
Investors have been bidding the company's shares higher following the announcement of a strategic acquisition that could enhance its product pipeline in the future.
According to the release, Mesoblast has secured an exclusive worldwide licence to a patented chimeric antigen receptor (CAR) technology platform.
This technology is designed to improve the effectiveness of the company's existing mesenchymal stromal cell (MSC) therapies by enhancing their ability to target diseased tissue.
Mesoblast advised that its current MSC therapies already have natural anti-inflammatory and tissue repair capabilities.
However, by incorporating CAR technology, the company aims to significantly improve how these therapies home in on inflamed or damaged tissue.
The goal is to increase both the precision and potency of its treatments, particularly in inflammatory and autoimmune diseases.
Management highlights that this could create opportunities to develop more effective treatments for conditions such as ulcerative colitis and Crohn's disease, as well as Lupus Nephritis.
Backed by leading research
The underlying CAR technology was developed by researchers at the prestigious Mayo Clinic in the United States and published in a leading scientific journal.
Mesoblast has obtained the intellectual property through the acquisition of a startup established to advance the platform.
As part of the agreement, Mayo Clinic will also provide support to further develop the technology, including assistance with manufacturing processes.
The acquisition was completed through the issuance of shares rather than cash, allowing the company to strengthen its technology base without a direct cash outlay.
Management commentary
Mesoblast's chief executive, Silviu Itescu, said the acquisition aligns closely with the company's strategy to build on its leadership in cellular therapies. He commented:
This innovative genetic modification technology fits well with our strategy to extend our market leadership by creating products with even greater efficacy and new target indications.
Following today's move higher, Mesoblast shares continued to outperform the market and are now up 27% since this time last year.
As a comparison, the ASX 200 index is up by around 15% over the same period.
