Section 1- Science
What are adult stem cells? Adult stem cells retain the ability to differentiate into various tissues of the body. Unlike embryonic stem cells, those from adult tissues are restricted in the number of different tissues that they can become. A subset of adult stem cells termed Mesenchymal precursor cells (MPCs) is able to transform into tissues including bone, cartilage, and heart. MPCs have been shown in clinical and preclinical trials to improve function in a variety of orthopaedic and cardiovascular diseases.
Which stem cells are used for Mesoblast's technology?
Mesoblast uses a type of stem cell called a Mesenchymal precursor cell (MPC) which has the ability to differentiate into a wide variety of tissues including bone, fat, heart, cartilage and other Mesenchymal lineages. In October 2006, Mesoblast was granted a United States Patent and Trade Mark Office (USPTO) United States key patent, which delivers a major commercial advantage and offers long term protection for the company's platform technology. The patent ensures that only Mesoblast and its United States-based sister company, Angioblast Systems Inc, can commercialise the proprietary adult stem cells, termed Mesenchymal Precursor Cells, in the USA, the world's largest market for regenerative medicines. The patent granted by the USPTO confers rights through to at least the year 2019 to composition-of-matter, or ownership, over the unique adult stem cells, which were first identified at the Hanson Institute in Adelaide , Australia .
Why do adult stem cells offer certain advantages over embryonic stem cells?
Adult stem cells are more differentiated, meaning that they have less capacity than embryonic stem cells to grow and divide out of control (and possibly lead to the formation of tumors). Furthermore, adult stem cells are less likely to transform spontaneously into unwanted tissue types. Importantly, the use of adult stem cells overcomes the ethical concerns associated with embryonic stem cells.
How do adult stem cells become specialised?
The adult stem cells become specialised by responding to local stimuli and signals from the injured tissue. In addition, MPCs secrete biochemical factors that induce the body's own tissue or cells to grow and regenerate, effectively shrinking the injury.
What are the potential therapeutic applications for Mesoblast's technology?
Currently, Mesoblast is conducting a Pilot Trial at The Royal Melbourne Hospital for the use of cultured MPCs to treat up to 10 patients suffering from non-healing, long bone defects. Mesoblast is also targeting osteoarthritis; cartilage regeneration; and degenerative disc disease. These are all very large markets with inadequate or absent therapies. Importantly in December 2006, the United States Food and Drug Administration (US FDA) cleared Mesoblast's Investigational New Drug Submission (IND) to commence a Phase 2 clinical trial for spinal fusion in the US . This was a major milestone for Mesoblast as clearance of the IND submission by the FDA validates the Company's preclinical and clinical strategies for developing well-characterised, safe, and effective adult stem cell products. FDA clearance is a significant step towards commercialising Mesoblast's stem cell products in the major US market. This Phase 2 trial will be the first ever to test allogeneic, or ‘off-the- shelf', adult stem cells for the treatment of spinal disc disease.
Do the patients have to use their own MPCs for treatment?
No, although use of the patient's own cells is one way of delivering the treatment. One of the problems with this approach is the time taken to grow enough of the patient's cells from the relatively small number that can be collected from the body. A second disadvantage would be the cost of individualised therapy. For these reasons, Mesoblast is developing ‘off-the-shelf' products based on MPCs. The clinical trials at The Royal Melbourne Hospital and John Hunter Hospital in New South Wales use the patient's own cells (autologous) but future trials will use cells from an unrelated (allogeneic) donor.
What is an ‘off-the-shelf' product based on adult stem cells?
MPCs from unrelated donors have the unique ability of not stimulating an immune reaction when introduced into the patient. MPCs from donors can be grown in large numbers and made available for treatment in much the same way as a drug.
What is the source of MPCs?
MPCs are found in small numbers in various organs and tissues, including dental pulp, skin, fat and bone marrow. They make up less than 0.01% of the cells in bone marrow.
How are MPCs extracted?
Cells are removed from bone marrow in a simple bone marrow aspiration procedure. MPCs are then purified from the mixed bone marrow population by mixing them with magnetic monoclonal antibodies that only bind to MPCs. The MPCs are separated from other cell types by a magnet.
What happens to the MPCs next?
To obtain enough cells for a therapeutic effect, the MPCs are grown in the laboratory in a special medium that allows them to divide, but not to differentiate. Mesoblast is able to grow billions of cells from a single donor within six to eight weeks.
How are MPCs administered?
The stem cells suspended in saline can be given via injection (into heart muscle). Alternatively, they can be delivered via a tube to the heart or an arthroscopic procedure for bone repair. The MPCs can also be coupled to a patch or biomaterial for cartilage regeneration.
How do MPCs recognise the damaged tissue?
The MPCs have certain innate homing abilities due to their ability to move towards signals that are secreted following injury.
What are the potential uses for Mesoblast's adult stem cells, MPCs?
MPCs have the ability to differentiate into a variety of tissues, create their own blood supply and induce the body's own healthy cells to regenerate and proliferate. At this stage, their potential is unlimited; however Mesoblast will initially concentrate on the development of MPC technology for the treatment of orthopaedic diseases such as degenerative disc disease, osteoarthritis, long bone fractures and cartilage degeneration. Mesoblast's sister company in the United States, Angioblast Systems Inc, is focusing on cardiovascular diseases including heart attacks, heart failure, stroke, diabetes and peripheral vascular disease. Using the same technology platform, a clinical Pilot Trial of up to 10 patients suffering from severe, multi-coronary artery disease is currently being conducted at the John Hunter Hospital in New South Wales . This is an autologous trial but future trials are all expected to use cells from an unrelated (allogeneic) donor.
Which patients are most likely to benefit from MPC therapy in the future?
The aging population and active lifestyles among all age groups inevitably result in increased numbers of heart attacks, bone breaks, knee injuries, and strokes and so on. Advances in medicine have meant that many patients survive what would once have been a fatal condition, but very often, their quality of life suffers after such acute injuries. In addition, the first heart attack or severe fracture can put the patient at an increased risk of developing secondary complications. MPC therapy could lower the risk of such complications and improve the quality of life.
Are there ethical or moral issues associated with adult stem cell therapy?
There are no ethical or moral issues surrounding embryo creation and destruction associated with adult stem cells. Adult stem cells are obtained in a safe manner from adults and do not pose any significant risks.
Who is responsible for this technology?
The technology was based on 10 years' pioneering work conducted at the Institute of Medical and Veterinary Science (IMVS) and the Hanson Institute in South Australia . Mesoblast's founder and chief scientific adviser, Professor Silviu Itescu , conducted a worldwide search to locate the best technology and successfully licensed it in 2004.
What does the name Mesoblast mean?
Mesoblast is another term for mesoderm, the middle cellular layer of a developing vertebrate that gives rise to muscle, bone, cartilage, blood and connective tissue.
Section 2 –Business
What is the company's business strategy?
Mesoblast's commercial strategy is to generate a series of high margin stem cell products that are obtained from a single donor, commercially expanded and frozen, and subsequently used in potentially thousands of unrelated, or allogeneic, recipients at the time and place of need.
What is the company's commercial strategy?
Mesoblast's approach to commercialisation will be focus driven and outcomes focused. At appropriate times, Mesoblast will seek to collaborate with international device and pharmaceutical companies to generate early revenues and maximise returns for shareholders.
What are the timelines for development and commercialisation?
Both Mesoblast and its sister company, Angioblast Systems Inc in the United States, are very well positioned to continue rapid product commercialisation for both orthopaedic and cardiovascular applications, respectively, based on the shared adult stem cell technology platform. Mesoblast has made tremendous progress in the two years since its December 2004 public listing and has accomplished many of its objectives well ahead of schedule. The ensuing six to 12 months should be equally exciting as the company commences US Food and Drug Administration (FDA) clinical trials and advances new applications. Major recent milestones accomplished by Mesoblast include:
• A successful Investigational New Drug (IND) submission to the FDA to commence a Phase 2 Clinical Trial for spinal fusion;
• Positive results from clinical and pre-clinical trials; • Validation of its high-margin business model to use “off-the-shelf” adult stem cells in unrelated, or allogeneic, recipients
• Granted a key patent in the US .
Mesoblast's IND submission and clearance was a key milestone target outlined in the company's IPO Prospectus in December 2004, and was accomplished over six months ahead of schedule.
What differentiates Mesoblast's technology from that of its competitors?
Mesoblast's technology ensures that its starting population of MPCs is more than 1000-fold purer than that of its competitors. Mesoblast's MPCs have been shown in animal models to both create new blood vessels and stimulate cells at the site of damage to repair themselves, as well as providing functional cells to the region of tissue in need of repair. Because MPCs do not cause an immune reaction, MPCs for the treatment of different individuals can be grown from universal donors. This is not the case with other stem cell companies. Mesoblast is developing allogeneic (unrelated recipient) stem cell products for treatment of various medical conditions, including long bone fractures and degenerative intervertebral disc disease, both rapidly growing, billion dollar markets. In preclinical studies, Mesoblast's stem cells have generated statistically superior long bone repair and spinal fusion compared with controls.
Is there robust, ongoing patent protection for the Company's patented technology?
The United States Patent and Trade Mark Office (USPTO) granted a foundation patent to Mesoblast in October 2006, which delivers a major commercial advantage and offers long term protection for the company's platform technology. The patent ensures that only Mesoblast and its United States-based sister company, Angioblast Systems Inc; can commercialise the proprietary adult stem cells, termed Mesenchymal Precursor Cells, in the USA, the world's largest market for regenerative medicines. The patent granted by the USPTO confers rights through to at least the year 2019 to composition-of-matter, or ownership, over the unique adult stem cells, which were first identified at the Hanson Institute in Adelaide , Australia . Patents are the lifeblood of the Company, and granting of patents in various jurisdictions protects our commercial rights and ensures we have freedom to operate commercially. We are committed to the ongoing expansion, broadening, and development of our intellectual property portfolio.
What is Mesoblast's relationship with Angioblast?
Mesoblast is a significant equity holder in Angioblast, and after shareholder approval in November 2006, is currently increasing its equity stake from 33% to 39.2%. Angioblast and Mesoblast are jointly funding and progressing the shared platform technology in preclinical and clinical trials, patent management, technology development and commercialisation. Angioblast was assigned all intellectual property for MPC-related discoveries from the Institute of Medical and Veterinary Science and the Hanson Institute in South Australia , covering composition of matter and enablement of MPCs and Mesoblast has a worldwide exclusive licence for the use of MPCs in all orthopaedic applications.
Is Angioblast Inc a publicly-listed company in the US ?
No. Angioblast is a privately held company.
Is the orthopaedic licence granted to Mesoblast confined to Australia ?
No. Mesoblast's licence to develop the MPC technology for applications in the orthopaedic industry is exclusive for Australia , the United States and Europe .
Is the path to Food and Drug Administration (FDA)/Investigational New Drug ( IND ) clearance the same as that for other Australian biotechnology companies or global pharmaceutical companies?
Mesoblast continues to work collaboratively with the FDA in our approach to regulatory approvals. Our cells are a well characterised biologic, something that occurs in nature and is not a chemical compound. Since biologic responses among different types of large mammals is quite similar, the results we have obtained with our stem cells in preclinical studies are more likely to be reproducible when tested with patients compared with studies from conventional, synthetic drugs. Moreover, the lack of side effects seen with the stem cells in clinical and preclinical trials strongly supports their ongoing safety in humans, again something that cannot be said for standard drugs. For these reasons, we believe the regulatory path to product clearance and sales may be significantly shorter than for conventional drugs, with clearance for a Phase II for spinal fusion in the US and rapid progression to pivotal trials. This biologic advantage translates to significant savings in time and costs to commercialistion for each application of our proprietary stem cell technology.
Investor Centre
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