The Law Offices of Frank R. Cruz announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York, captioned Kristal v. Mesoblast Limited, et al., (Case No. 1:20-cv-08430), on behalf of persons and entities that purchased or otherwise acquired Mesoblast Limited (“Mesoblast” or the “Company”) (NASDAQ: MESO) securities between April 16, 2019 and October 1, 2020, inclusive (the “Class Period”). Plaintiff pursues under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”)
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Mesoblast develops allogeneic cellular medicines using its proprietary mesenchymal lineage cell therapy platform. Its lead product candidate, RYONCIL (remestemcel-L), is an investigational therapy comprising mesenchymal stem cells derived from bone marrow. In February 2018, the Company announced that remestemcel-L met its primary endpoint in a Phase 3 trial to treat children with steroid refractory acute graft versus host disease (“aGVHD”).
In early 2020, Mesoblast completed its rolling submission of its Biologics License Application (“BLA”) with the FDA to secure marketing authorization to commercialize remestemcel-L for children with steroid refractory aGVHD.
On August 11, 2020, the FDA released briefing materials for its Oncologic Drugs Advisory Committee (“ODAC”) meeting to be held on August 13, 2020. Therein, the FDA stated 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 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, the Company’s share price fell $6.09, or approximately 35%, to close at $11.33 per share on August 11, 2020, on unusually heavy trading volume.
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 the Company “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, the Company’s stock fell $6.56, or 35%, to close at $12.03 per share on October 2, 2020, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that comparative analyses between Mesoblast’s Phase 3 trial and three historical studies did not support the effectiveness of remestemcel-L for steroid refractory aGVHD due to design differences between the four studies; (2) that, as a result, the FDA was reasonably likely to require further clinical studies; (3) that, as a result, the commercialization of remestemcel-L in the U.S. was likely to be delayed; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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If you purchased Mesoblast securities during the Class Period, you may move the Court no later than 60 days from the date of this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Mesoblast securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [email protected], or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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The Law Offices of Frank R. Cruz, Los Angeles
Frank R. Cruz, 310-914-5007