Celgene has agreed to buy a minority stake in Australian biotech Mesoblast for AUD58.5 million (USD45 million).
IHS Life Sciences perspective | |
Significance | Australian biotech Mesoblast will sell a minority stake to Celgene (US) for AUD58.5 million (USD45 million). |
Implications | The deal is in line with Celgene's and Mesoblast's strategies of developing partnerships with other biotechs. |
Outlook | Mesoblast and Celgene have complementary areas of focus in terms of therapy area, with Mesoblast expected to benefit from the capital injection and Celgene to diversify and add to its cellular and regenerative medicine pipeline. |
Australian stem-cell therapy developer Mesoblast has agreed to sell a minority stake to Celgene (US) for AUD58.5 million (USD45 million), Mesoblast said in a statement. Under the agreement, Celgene will buy 15.3 million ordinary shares in Mesoblast at a price of AUD3.82 per share. Celgene will also have a six-month right of first refusal on Mesoblast's proprietary mesenchymal lineage adult stem-cell product candidates for the prevention and treatment of acute graft versus host disease (GVHD), specific types of cancer, inflammatory bowel diseases, and organ transplant rejection.
Celgene's purchase price of AUD3.82 per share in Mesoblast equates to a 19% premium to Mesoblast's closing share price on 10 April of AUD3.21, according to Motley Fool Australia, with Celgene's stake purchase amounting to approximately 4.5% of Mesoblast.
In addition, the two parties are discussing details of global rights excluding Japan, where Mesoblast already partners with JCR Pharmaceuticals (Japan), according to Motley Fool Australia. Last year, Mesoblast and JCR Pharmaceuticals filed for approval from Japan's Pharmaceuticals and Medical Devices Agency (PMDA) to manufacture an allogeneic mesenchymal stem-cell (MSC) marker JR-031, which targets acute graft versus host disease (GVHD) in children and adults (see Japan: 2 October 2014: JCR Pharmaceuticals files for approval of allogeneic stem-cell treatment in Japan). It also formed a research and development partnership in late 2013 with United States-based firms Intrexon Corporation and Ziopharm Oncology on oncology treatments (see Australia: 25 October 2013: Mesoblast, Intexon, and Ziopharm form R&D partnership on cancer therapeutics).
Mesoblast's pipeline has a number of treatment candidates in the last stage of development in several therapy areas, including refractory Crohn's disease and GVHD, that can occur after stem-cell or bone-marrow transplants, and heart failure.
Outlook and implications
The deal marks the latest step in Celgene's and Mesoblast's strategies of developing partnerships with other biotechs, with Mesoblast in particular seeking agreements with firms at the latter stages of development and commercialisation. The two companies have considerable overlap in terms of therapy area focus, with Mesoblast also expected to benefit from the injection of capital and potentially increased exposure to the US market.
Through the deal, Celgene, which manufactures oncology treatment Revlimid (lenalidomide), gains the opportunity to diversify and add to its cellular and regenerative medicine pipeline, with Mesoblast expected to benefit from Celgene's world-class expertise in immunology and oncology. The combined portfolio of the two companies is expected to significantly boost their overall presence in the cellular therapies space.