The Mesoblast Limited (ASX: MSB) share price is being crunched. It’s down 16% after giving an update about its Novartis AG (SWX: NOVN) agreement.
Mesoblast describes itself as a global leader in allogeneic cellular medicines for inflammatory diseases.
Mesoblast’s update on the Novartis agreement
The ASX healthcare share said that it had been notified by Novartis that it has chosen to terminate the agreement with Mesoblast before it closed.
Mesoblast said that it remains highly focused on executing its short-term objective to bring remestemcel-L to market for patients with acute respiratory distress syndrome (ARDS) due to COVID-19.
The company noted the observed mortality reduction with remestemcel-L in patients aged under 65 in the completed COVID ARDS trial, despite having missed the primary endpoint, is considered by Mesoblast to be a sufficiently strong signal to support pursuing an emergency use authorisation, the most direct path to market.
Mesoblast is preparing to initiate a phase 3 trial that may support a COVID ARDS emergency use authorisation. Management called this trial as pivotal. A positive outcome could be good for the Mesoblast share price.
COVID-19 remains a chance for Mesoblast
The company said that COVID-19 is likely to remain a serious global problem and can remain a major commercial opportunity for Mesoblast, with a steady state of intensive care unit (ICU) ARDS patients irrespective of vaccines and anti-viral treatments.
Mesoblast said that variants including Omicron present a growing threat due to increased infectivity and immune evasion from vaccines and monoclonal antibodies, increasing the urgent need for therapeutics to prevent the likely high mortality of those progressing to ICU and ARDS.
Summary thoughts on Mesoblast and the share price
Mesoblast has put its shareholders through a lot of volatility over the last couple of years. But it seems to be steadily heading down at the moment.
I’m not an expert on Mesoblast or COVID treatments, but with the world being two years into the pandemic, it seems the chance of Mesoblast playing a substantial part has significantly reduced and continues to seem less likely.
There are other ASX growth shares in the healthcare space that I’d rather look at as opportunities.
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