Mesoblast Ltd. said the U.S. Food and Drug Administration rejected its stem cell transplant drug Ryoncil and recommended that the company conduct another study of the therapy.

Ryoncil, or remestemcel-L, is intended for children with steroid-refractory acute graft versus host disease, or SR-aGVHD. In this condition, the donor cells view the recipient's body as foreign and attack the host's tissues after the allogeneic bone marrow transplant.

In a complete response letter addressing Mesoblast's biologics license application, the U.S. regulator recommended that the company undertake at least one additional trial in adults and/or children to provide further evidence of the effectiveness of Ryoncil for SR-aGVHD.

Further, the FDA identified a need for further scientific rationale to show the relationship of potency measurements to the product's biologic activity, Mesoblast said in a news release. "Assays measuring the potency of remestemcel-L will continue to be refined to provide further scientific rationale for its use in severe inflammatory diseases with high mortality risk, such as SR-aGVHD and COVID-19 ARDS," the company said.

The rejection came months after the Oncologic Drugs Advisory Committee of the U.S. FDA voted 9-1 that the available data supports Ryoncil's efficacy.

In view of the fact that there are no approved treatments for the condition for children under 12, Mesoblast said it will urgently request a Type A meeting with the regulator — expected within 30 days — to discuss a potential accelerated approval with a post-approval condition for an additional study.

Mesoblast is studying Ryoncil in a late-stage trial in up to 300 ventilator-dependent adults with moderate to severe acute respiratory distress syndrome due to COVID-19.