Mesoblast and Lonza establish strategic global manufacturing alliance for stem cell products

Australian regenerative medicine company Mesoblast (ASX: MSB) and Switzerland-based Lonza Group (SWS: LONN), a leader in biologic manufacturing, have entered into a strategic alliance for clinical and long-term commercial production of Mesoblast’s off-the-shelf (allogeneic) adult stem cell products.

The alliance will provide Mesoblast, whose share rose 2.6% to A$7.80 on the news, with significant commercial advantages, including certainty of capacity to meet long-term global supply of its proprietary Mesenchymal Precursor Cell (MPC) products. Under the agreement, financial terms of which were not disclosed:

• Lonza will supply Mesoblast’s clinical and long-term commercial MPC product needs globally;
• Mesoblast can trigger a process requiring Lonza to construct a purpose-built manufacturing facility exclusively for Mesoblast’s marketed products. In return, Mesoblast will purchase agreed quantities of marketed products from the facility;
• Mesoblast can exercise its right to buy out this manufacturing facility at a pre-agreed purchase price two years after the facility receives regulatory approval;
• Mesoblast will have exclusive access to Lonza’s Cell Therapy facilities in Singapore for the manufacture of allogeneic cell therapy products, subject to certain exceptions; and
• Lonza will utilize its proprietary intellectual property to facilitate reductions in Mesoblast’s manufacturing costs and help enable development of enhanced second generation products.