MSB Mesoblast Limited

By Colin Kellaher

American depositary shares of Mesoblast plummeted more than 65% in premarket trading Friday after the biopharmaceutical company's latest setback in its bid to win U.S. Food and Drug Administration approval for its proposed drug for graft-versus-host disease.

The Melbourne, Australia, company, which was again seeking FDA approval of remestemcel-L for the treatment of children with steroid-refractory acute graft-versus-host disease, a potentially life-threatening complication of an allogeneic bone-marrow transplant for blood cancer, late Thursday said the FDA issued a so-called complete response letter, indicating the agency won't approve the application in its current form.

Mesoblast said the FDA requested more data to support marketing approval, and that it plans to conduct a targeted, controlled study in the highest-risk adults with the greatest mortality in order to obtain the data.

Mesoblast said the new study is in line with its commercial strategy that envisions a sequenced progression from pediatric to adult indications, adding that adults comprise 80% of the market for the targeted indication.

The FDA in 2020 turned away Mesoblast's initial application and called on the company to conduct another study, even though an FDA advisory committee had recommended approval of the drug. The FDA usually follows the advice of its advisory committees.

Mesoblast earlier this year resubmitted its application with new information requested by the FDA, and the agency in March accepted the application and set a target action date of Aug. 2.

Trading in Mesoblast ADSs was halted after the close on Aug. 1, ahead of the FDA's decision. Trading resumed premarket on Friday, and Mesoblast ADSs were recently down 61% to $1.56.

The company's Australia-listed shares plunged 57% to end Friday's session at 47 Australian cents.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

August 04, 2023 08:48 ET (12:48 GMT)

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