Mesoblast close to milestone payments from Japan deal

Mesoblast (ASX:MSB) licensee JCR Pharmaceuticals plans to file for Japanese approval for a product based on the former’s stem cell technology by March 2014.

JCR has exclusive rights in Japan to manufacture, develop and market Mesoblast’s propriety culture-expanded mesenchymal stem cells (MSCs) in connection with the use of hematopoietic stem cells derived from peripheral blood.

The company is developing MSCs for JR-031, a culture-expanded MSC product for the treatment of steroid-refractory acute graft versus host disease (GvHD).

Acute GvHD is a potentially life-threatening complication involving transplanted immune cells attacking the host body’s cells. It affects around 50% of patients receiving an unrelated-donor bone marrow transplant.

JCR announced late last week that it plans to file for regulatory approval for JR-031 in Japan during the financial year ending in March.

If approved, JR-031 will be the first allogeneic cell-based product cleared for sale in Japan.

Mesoblast will be entitled to milestone payments upon regulatory filing and upon approval. The company will also receive royalties and predetermined payments upon JCR meeting certain sales thresholds. Mesoblast has not disclosed the size of these payments and royalties.

Mesoblast (ASX:MSB) shares were trading 1.87% higher at $6.00 as of around 2 pm on Monday.