In a bold move reflecting commitment to the company’s mission, Mesoblast’s CEO has chosen to lead by example by implementing a 30% reduction in their pay. This decision comes as Mesoblast grapples with the aftermath of another FDA rejection of its off-the-shelf cell therapy.
Earlier this year, in February, Mesoblast had sought a reevaluation of remestemcel-L’s approval for pediatric patients with steroid-refractory acute graft-versus-host disease (SR-aGVHD). The revised application was thoughtfully bolstered with a wealth of new data, including efficacy insights and biomarker information. This data was thoughtfully compared against a robust patient database maintained by the Mount Sinai medical system.
“We had anticipated that remestemcel-L would have been approved by the United States Food and Drug Administration (FDA) for the treatment of pediatric steroid-refractory acute graft versus host disease (SR-aGVHD), a condition with a high mortality where there are no approved therapies for children under 12 years old. During the six-month BLA review we made substantial progress towards bringing this cutting-edge product to market with completion of a comprehensive FDA inspection of our manufacturing process. Following the complete response, a Type A meeting with FDA has been scheduled for mid-September and we will discuss the potential paths to approval via additional potency assay data or new clinical data in adults. We remain committed to making available this life-saving therapy to patients suffering with this devastating disease.”
– Mesoblast Chief Executive Silviu Itescu
Regrettably, the company recently disclosed that it has received yet another complete response from the FDA, necessitating further data. Despite their prior resistance to the FDA’s request for a new trial, Mesoblast now appears to have embraced the reality of the situation.
In an ambitious undertaking, the company is striving for a significant 40% reduction in annualized payroll expenses by February 2024. This reduction encompasses base salaries, short-term incentive (STI) payments, and contractor fees. Notably, the company’s statement does not mention any impending layoffs, though efforts have been made to clarify this aspect directly with the company.
“We have implemented a significant cost containment strategy and enacted substantial payroll reduction to protect our cash reserves and ensure that we are fiscally prudent. Leading by example, I have deferred my entire short term incentives (STI) and reduced my annual salary by 30%, and the same initiatives have been agreed to by our CMO Dr Eric Rose. I am also pleased that our Non-Executive Directors have agreed to defer all cash compensation and they voluntarily deferred 100% of the cash payment of their director fees and agreed to receive 50% of their fees in LTIs, subject to required shareholder approval.”
“These cost reduction strategies together with operational streamlining will enable the company to conserve cash while at the same time drive value as we progress our Phase 3 programs in adults with SR-aGVHD and in chronic inflammatory low back pain.”
– Dr Itescu
These financial adjustments are poised to facilitate the launch of a fresh trial aimed at achieving the elusive approval for remestemcel-L. Mesoblast is actively engaged in discussions with the Blood and Marrow Clinical Trials Network, with plans to initiate a focused and controlled study encompassing adults facing a heightened risk of mortality.
As of June’s conclusion, Mesoblast’s financial report indicated holdings of $71.3 million in cash and equivalents.
In an industry marked by challenges and triumphs, Mesoblast’s strategic decisions underscore a dedication to advancing medical solutions while navigating the complexities of regulatory approval. This proactive approach, coupled with financial prudence, will likely shape the company’s trajectory as it forges ahead in its mission to bring meaningful therapies to patients in need.