Remestemcel-L is an investigational drug therapy that uses mesenchymal stromal cells (MSCs), a cell-based platform, to treat ARDS and improve outcomes. Remestemcel-L has the potential to be the first treatment for the most critically ill ARDS patients, Novartis said. It is currently being studied in an ongoing 300-patient phase III study of COVID-19 patients. Novartis intends to initiate a phase III study in non-COVID-19 patients after the anticipated closing of the license agreement and successful completion and outcome of the current study. The study is expected to close in early 2021.

Under the terms of the agreement, Novartis will acquire the exclusive worldwide rights to develop, commercialize, and manufacture remestemcel-L. The firm will make a $25 million upfront payment and invest $25 million in Mesoblast equity with additional payments and royalties due on achievement of agreed upon development, regulatory, and commercial milestones.

Novartis will also provide support to allow for commercial manufacturing production and has the option to distribute remestemcel-L for graft versus host disease (outside Japan).

The agreement is subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and certain other conditions, the firms said.