Mesoblast enters collaboration with Novartis for remestemcel-L for acute respiratory distress syndrome (ARDS), including COVID-19-associated ARDS.

Novartis has signed an exclusive licence and collaboration agreement with Mesoblast to develop remestemcel-L for acute respiratory distress syndrome (ARDS), including COVID-19-associated ARDS. Currently, remestemcel-L is being studied in COVID-19-related ARDS in an ongoing 300-patient phase III study. Key transaction terms: • Novartis will make a US 50 million upfront payment including $ 25 million in equity. • From the initiation of a Phase III trial in all-cause ARDS, Novartis will fully fund global clinical development for all-cause ARDS and potentially other respiratory indications. • Mesoblast may receive a total of $ 505 million pending achievement of pre-commercialization milestones for ARDS indications. • Mesoblast may receive additional payments post-commercialization of up to $ 750 million based on achieving certain sales milestones and tiered double-digit royalties on product sales. • Mesoblast will retain full rights and economics for remestemcel-L for graft versus host disease (GVHD), and Novartis has an option to, if exercised, become the commercial distributor outside of Japan. • For most non-respiratory indications, the parties may co-fund development and commercialization on a 50:50 profit-share basis. • Mesoblast will be responsible for clinical and commercial manufacturing and Novartis will purchase commercial product under agreed pricing terms. Novartis will reimburse Mesoblast up to $ 50 million on the achievement of certain milestones related to the successful implementation of its next-generation manufacturing processes using its proprietary media and three-dimensional bioreactors aimed at delivering substantial manufacturing efficiencies. Novartis will be responsible for any capital expenditure required to meet increased capacity requirements for manufacture of remestemcel-L.