Mesoblast Limited Class Action Lawsuit
- Company Name
- Mesoblast Limited
- Stock Symbol
- Class Period
- April 16, 2019 to October 1, 2020
- Southern District of New York
The Mesoblast Limited class action lawsuit charges Mesoblast and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of Mesoblast securities between April 16, 2019 and October 1, 2020 (the “Class Period”). The Mesoblast class action lawsuit was commenced on October 8, 2020 in the Southern District of New York and is captioned Kristal v. Mesoblast Limited, No. 20-cv-08430.
Mesoblast develops allogeneic cellular medicines using its mesenchymal lineage cell therapy platform. Mesoblast’s lead product candidate, RYONCIL (remestemcel-L), is an investigational therapy comprising mesenchymal stem cells derived from bone marrow. In February 2018, Mesoblast announced that remestemcel-L met its primary endpoint in a Phase 3 trial to treat children with steroid refractory acute graft versus host disease (“SR-aGVHD”). In early 2020, Mesoblast completed its rolling submission of its Biologics License Application with the U.S. Food and Drug Administration (“FDA”) to secure marketing authorization to commercialize remestemcel-L for children with SR-aGVHD.
The Mesoblast class action lawsuit alleges that during the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (1) comparative analyses between Mesoblast’s Phase 3 trial and three historical studies did not support the effectiveness of remestemcel-L for SR-aGVHD due to design differences between the four studies; (2) thus, the FDA was reasonably likely to require Mesoblast to conduct further clinical studies; (3) as such, Mesoblast’s commercialization of remestemcel-L in the United States. was likely to be delayed; and (4) as a result of the foregoing, defendants’ positive statements about Mesoblast’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On August 11, 2020, the FDA released briefing materials for its Oncologic Drugs Advisory Committee meeting revealing that Mesoblast provided post hoc analyses of other studies “to further establish the appropriateness of 45% as the null Day-28 ORR” for its primary endpoint. The briefing materials further stated that, due to design differences between these historical studies and Mesoblast’s submitted study, “it is unclear that these study results are relevant to the proposed indication.” On this news, Mesoblast’s share price fell by nearly 35%.
Then, on October 1, 2020, Mesoblast disclosed that it had received a Complete Response Letter (“CRL”) from the FDA regarding its marketing application for remestemcel-L for treatment of SR-aGVHD in pediatric patients. According to the CRL, the FDA recommended that Mesoblast “conduct at least one additional randomized, controlled study in adults and/or children to provide further evidence of the effectiveness of remestemcel-L for SR-aGVHD.” The CRL also “identified a need for further scientific rationale to demonstrate the relationship of potency measurements to the product’s biologic activity.” On this news, Mesoblast’s share price fell an additional 35.3%, further damaging investors.
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