Mesoblast Teva Starts
Edison | Jan 31, 2014 06:02AM ET
Teva starts Phase III CHF study
Mesoblast’s partner Teva has now listed the details of its pivotal Phase III study of MPCs, now coded as CEP-41750 (formerly Revascor), in congestive heart failure (CHF). The large, 1,730-patient trial should begin to recruit patients in the next few weeks and is projected to render final data in mid-2018. CHF is the most important of the seven different indications being pursued with the MPC platform and, with US$4bn peak sales potential, it represents the largest component in our valuation. We consider the move supports a higher probability of success (50% vs 40%), which boosts our rNPV to A$3.0bn (A$9.06/diluted share).
First patients into CHF Phase III soon
Teva has posted on clinicaltrials.gov the details of its 1,730-patient Phase III study of MPCs, now coded CEP-41750, in CHF. The study should enrol its first patients in the next few weeks and is projected to render final data in mid-2018. Edison views the start of this large trial as important since it underlines Teva’s commitment to the cell therapy area and to its partnership with Mesoblast. Edison estimates the financial commitment to be of the order of at least US$150m.
Now a leading contender in the field
By virtue of the size of the trial, CEP-41750 will become the leading stem cell therapy for CHF (smaller Phase III studies are underway or planned with stem cell products by Cardio3 Biosciences and Bioheart)..
Nine clinical programmes
Mesoblast has nine clinical candidates (four in Phase III, five in Phase II) derived from its two technology platforms (MPCs, MSCs). Final Phase II results in disc repair have just been published and will be the subject of a separate note.
Valuation: rNPV of A$3.0bn (A$9.06/diluted share)
We consider the start of the Phase III trial supports a higher probability of success for CEP-17450, which boosts our valuation to A$3.0bn (A$9.06/diluted share). We have now assigned a success probability of 50% (vs 40% previously), which still remains low for a Phase III candidate (and is simply a reflection of the relatively small Phase II dataset). This valuation is ~30% above the current share price. Furthermore, varying the market share, pricing and probability assumptions for CEP-17450 suggests the rNPV would fall in the A$5.9-13.4/share range, highlighting the upside associated with more favourable outcomes.
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