Shares of allogeneic cellular medicines company Mesoblast (NASDAQ:MESO) are tanking in the pre-market session today after it received a complete response letter from the U.S. Food and Drug Administration for its biologics license application resubmission for remestemcel-L in pediatric steroid-refractory acute graft versus host disease (SR-aGVHD).
The healthcare regulator has pointed to a need for additional data to support an approval and the company now plans to undertake a targeted, controlled study in adults with the highest risk. Further, the study is part of Mesoblast’s commercial strategy as adults make up 80% of the SR-aGVHD market.
The FDA also noted the improvements to Mesoblast’s potency assay and the company is also planning a Type A meeting with the regulator in the next 45 days to find common ground on the trial design.
Following this development, today, Chardan Capital’s Keay Nakae has reiterated a Sell rating on Mesoblast while lowering the price target to $1.50 from $2.
Overall, the Street has a $1.50 consensus price target on Mesoblast alongside a Moderate Sell consensus rating. Today’s ~60% price erosion comes after a nearly 35% rise in Mesoblast shares so far this year.
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