- Celgene's purchase of 15.3 million shares of Mesoblast at $3.82 per share has substantially increased investor confidence. After this purchase, Celgene owns 4.5% of Mesoblast.
- Mesoblast, which develops stem cell-based therapies, has had a rough year and faced a 16% decline in share price.
- Mesoblast's drug candidates include therapies for prevention and treatment of acute graft versus host disease (GVHD), certain oncologic diseases, inflammatory bowel disease, and organ transplant rejection.
Like many small, growing biotech companies with promising pipelines, strategic partnerships with larger companies are the lifeblood of survival. For the last six months of 2014, Mesoblast spent $56.5 million on its R&D activities, with a cash balance of only $149 million at the end of 2014.
However, now that Celgene has bought in, the company can now continue its development and commercialization activities for at least another 18 months without an additional cash infusion, according to Mesoblast's CEO, Silviu Itescu.
For its part, Celgene, which has a strong marketing and sales teams in the areas of cancer and inflammatory diseases, is also winning with this partnership. Based on this deal, Celgene has right of first refusal over licensing deals for the commercialization of Mesoblast's adult stem cell products.