When it announced a deal with Australian inflammatory disease specialist Mesoblast back in November last year, Basel-based Novartis described its lead candidate, remestemcel-L, as ‘an important addition to our pipeline’.

However, the deal was never closed and according to reports, Mesoblast never received the promised $50m upfront cash payment and equity investment. This week, Novartis notified Mesoblast of its decision to terminate the agreement.

‘After assessing additional data, the totality of evidence from the phase 3 trial is not sufficient to continue with the collaboration agreement,’ said a Novartis spokesperson, adding that ‘no safety concerns have been identified’.

The phase 3 trial in question was initiated after very positive results from an open-label compassionate use programme that suggested remestemcel-L offered an 83% survival rate in patients on ventilators who were treated with the experimental cell therapy.

But, in December, Mesoblast cut short the phase 3 trial after a data safety monitoring board concluded the therapy was ‘not likely’ to reach its primary endpoint– a 43% reduction in mortality at 30 days. In another blow, a few weeks earlier, the Food and Drug Administration had rejected remestemcel-L in a different indication – paediatric acute graft-versus-host disease – because the company aimed to use data from a single-arm, open-label study rather than a randomised trial.

Despite the many setbacks – and the 21% drop in its share price this week – Mesoblast remains determined to bring the cell-based therapy to market for patients with acute respiratory distress syndrome (ARDS) due to COVID-19.

‘The observed mortality reduction with remestemcel-L in patients aged under 65 in the completed COVID ARDS trial, despite having missed the primary endpoint, is considered by Mesoblast to be a sufficiently strong signal to support pursuing an emergency use authorisation (EUA), the most direct path to market,’ it said.

The company is ‘preparing to initiate a pivotal phase 3 trial that may support a COVID ARDS EUA’, it said, as ‘COVID-19 is likely to remain a serious global problem and to provide a major commercial opportunity for Mesoblast, with a steady state of intensive care unit ARDS patients irrespective of vaccines and anti-viral treatments’.

Mesoblast considered itself ‘a world leader in developing allogeneic (off-the-shelf) cellular medicines for the treatment of severe and life-threatening inflammatory conditions’. It does so by leveraging its proprietary mesenchymal lineage cell therapy technology platform to identify candidates that respond to severe inflammation by releasing anti-inflammatory factors and so reduce the damage from the inflammatory process.