Mesoblast Partners With Lonza Group To Produce Off The Shelf Allogeneic Mesenchymal Precursor Stem Cell Therapies

Mesoblast Inc. is an Australian company (MSB.AX) that has had some success in clinical trials with its allogeneic mesenchymal precursor stem cell therapies. Mesoblast has a market capitalization of over 2 billion dollars and is entirely alone at that lofty level among stem cell companies. Geron, for example, has a current market capitalization of $282 million, while Osiris, which has a broad patent on mesenchymal stem cells from bone marrow, has a market capitalization of $171 million. Whether Osiris's patents and Mesoblast's are in conflict is unclear and is a question which may rise in the future of the two companies.

Mesoblast describes it's stem cell therapy technology platform as follows:

'Mesoblast’s adult stem cell technology platform is built upon the discovery of adult-derived Mesenchymal Precursor Cells (MPCs), and the development of methods to isolate and accurately identify these cells. Mesoblast’s intellectual property covers tools for the purification of MPCs from bone marrow aspirates and other tissue sources, and further defines the MPCs by surface markers. These cells represent a unique composition of matter that differentiates its potency from other cell types in the adult setting. Additional intellectual property relates to the applications of MPCs to treat specific medical conditions.'

The Lonza Group deal is described in the Mesoblast announcement as follows:

• The alliance will provide Mesoblast with significant commercial advantages, including certainty of capacity to meet long-term global supply of its proprietary Mesenchymal Precursor Cell (MPC) products.


• Under the agreement Lonza will supply Mesoblast’s clinical and long-term commercial MPC product needs globally.


• Mesoblast can trigger a process requiring Lonza to construct a purpose-built manufacturing facility exclusively for Mesoblast’s marketed products. In return,


• Mesoblast will purchase agreed quantities of marketed products from the facility.

Mesoblast can exercise its right to buy out this manufacturing facility at a pre-agreed purchase price two years after the facility receives regulatory approval. Lonza will utilize its proprietary intellectual property to facilitate reductions in Mesoblast’s manufacturing costs and help enable development of enhanced second generation products.