Novartis will make upfront cash payment of $50m and equity/share subscription, plus performance-based milestones and royalties


Novartis tower with surrounding buildings. (Credit: Novartis AG.)

Novartis has entered into an exclusive global license and collaboration agreement with Australia-based regenerative medicine firm Mesoblast for its investigational cell therapy product remestemcel-L.

Under the terms of the agreement, Novartis will obtain the exclusive global rights to develop, commercialise and manufacture remestemcel-L for the treatment of acute respiratory distress syndrome (ARDS), including complications related to Covid-19.

The company is expected to make an upfront payment of $25m in cash, and invest $25m in Mesoblast equity, along with additional payments and royalties, based on reaching previously agreed development, regulatory and commercial milestones.

Also, the Swiss drugmaker is expected to support the commercial manufacturing scale-up and hold an option to distribute remestemcel-L for graft versus host disease (GVHD) in territories outside Japan.

Novartis global drug development and chief medical officer head John Tsai said: “We believe that Novartis is uniquely placed to advance this important potential new therapy. Novartis is committed to, and has demonstrated success with, cell-based therapies and transforming care for a spectrum of respiratory diseases.

“This makes remestemcel-L an important addition to our pipeline. It has the potential to be the first treatment for the most critically ill ARDS patients, and it provides us with an opportunity to apply years of specialized experience directly to the work of saving lives.”

ARDS is a clinical syndrome characterised by severe hypoxemia and bilateral pulmonary infiltrates without evidence of cardiac failure.

Remestemcel-L is an investigational therapy containing culture-expanded mesenchymal stromal cells derived from the bone marrow of an unrelated donor.

The therapy is believed to have immunomodulatory properties to counteract the cytokine storms due to different inflammatory conditions.

Remestemcel-L works by down-regulating the production of pro-inflammatory cytokines, and enhanced production of anti-inflammatory cytokines, and recruiting naturally occurring anti-inflammatory cells to involved tissues.

The drug leverages mesenchymal stromal cells (MSCs), a cell-based platform technology, and is currently being studied in a Phase 3 study with Covid-19 related ARDS.

Novartis said that it will initiate a Phase 3 study in ARDS not related to Covid-19, after the closing of the license agreement and completion of the current trials.