Muted market reaction to long-awaited Mesoblast back pain study

Mesoblast (ASX:MSB) shares haven’t budged much even as Australia’s second-biggest biotech company announced “encouraging” results from a six-year phase 3 clinical trial testing its stem cell treatment to reduce chronic lower back pain.

Patients who had a single injection of rexlemestrocel-L experienced a reduction in their back pain from inflammatory disc disease for at least two years, compared to patients treated with placebo, Mesoblast said.

The trial involved 391 patients across 48 sites, mostly in the United States, whose conservative efforts to treat their lower back pain had failed. They were followed for an average of five and a half years after getting the injection of six million stem cells.

Mesoblast chief medical officer Dr Fred Grossman said that on the basis of these results, the company intended to meet with the US Food and Drug Administration and discuss potential pathways towards approval for rexlemestrocel-L.

About 7 million Americans have inflammatory disc disease, Mesoblast said.

“This is a patient population that is in desperate need of pain relief, hence most or many wind up on opioids, and we know that at least in the US, there is an opioid epidemic,” Dr Grossman told analysts on a conference call this morning.

“So it’s not like there are treatments that are available, that are adequate for these patients. And to see pain reductions as we’re seeing here, is very, very encouraging.”

In the 168 patients that were on opioids, those that received rexlemestrocel-L reduced their use of the painkillers by an average of 40 per cent – while those who received a placebo injection of saline actually increased their use of the opioids, Mesoblast said.

But at lunchtime Mesoblast shares were up just 4.5 per cent to $2.68 – their highest level this year, but still probably not enough to impress investors who picked up MSB at over $4 in early December. Mesoblast shares plunged by over a third in early December after a setback to its COVID-19 trial.

“I think Mesoblast’s probably lost a bit of its shine,” Morgans analyst Scott Power told Stockhead. “That’s not to downgrade some of the important work that they’re doing.”

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