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Mesoblast, Grünenthal team up in Europe, LatAm to develop cell therapy for pain

Mesoblast Ltd. and Grünenthal are teaming up to develop a cell therapy candidate for treating patients with back pain, for commercialization in Europe and Latin America.

The therapy, MPC-06-ID, is in phase 3 development for chronic low back pain due to degenerative disc disease in patients who have exhausted conservative treatment options. Under the deal, Aachen, Germany-based Grünenthal will have exclusive commercialization rights to the medicine in the two regions.

Melbourne-based Mesoblast will receive up to US$150 million in up-front and milestone payments prior to the product's launch, and the company is also eligible for further commercialization milestone payments.

Those payments include up to US$45 million within the first year, including US$15 million on signing, US$20 million upon regulatory approval to begin a confirmatory late-stage trial in Europe and US$10 million upon achievement of certain clinical and manufacturing outcomes. Milestone payments to Mesoblast could also exceed US$1 billion depending on the outcome of the phase 3 studies and patient adoption.

Mesoblast will also receive tiered double-digit royalties on product sales.

Australia's Mesoblast is conducting a phase 3 study in the U.S. for MPC-06-ID, which will read out in 2020. In a previous U.S. mid-stage trial, the therapy was shown to result in meaningful and durable improvements for patients in pain intensity and functionality for at least three years.

Meanwhile, the companies have agreed on a development plan for the cell therapy to meet regulatory requirements in Europe. The plan includes a collaboration on the study design of a confirmatory phase 3 trial in Europe.

The late-stage trials in U.S. and Europe are expected to support regulatory approvals of the therapy in the respective regions for treating chronic low back pain due to degenerative disc disease.