The world is in dire need of a COVID-19 treatment. A vaccine is the plan b for the long-term. However, governments can take action immediately through COVID-19 treatments and testing. Mesoblast (NASDAQ:MESO) and (ASX:MSB), an Australian biotech is developing a stem cell treatment (Remestemcel-L), for COVID-19.

The primary reason people die from COVID-19 is due their immune system overreacting when the virus enters their lungs. Mesoblast’s stem cell treatment tames down the excessive immune response. Ultimately, allowing the patient’s immune system to fight the virus.

 

Why is Mesoblast up 67% in a month?

Mesoblast’s promising clinical trials of Remestemcel-L is captivating investors around the globe.

The unprecedented buying began when Mesoblast reported an 83% survival rate from a COVID-19 clinical trial (24th April). Mesoblast administered Remestemcel-L to 12 patients hooked to mechanical ventilators and 10 survived. While 12 patients is not a significant pool of candidates,an 83% survival rate is astonishing. Hence, investors flocked to the biotech.

Mesoblast is operating full speed as the biotech already commenced its phase 2/3 COVID-19 clinical trial. A total of 300 patients will undergo remestemcel-L treatment across 20 medical centres in the US. The expected timeframe for the trial is 3-4 months. If the trial appears unsuccessful then the centres would stop the testing early. However, investors seem to be expecting positive results as the share price continues to climb. Also, if Mesoblast can score a similar survival rate in this upcoming trial then we should expect another volcanic surge.

Furthemore, Mesoblast successfully completed a capital raising to fund the manufacturing of Remestmecel-L. Making mesoblast well positioned to pursue their potentially viable COVID-19 stem cell treatment.

Success is not new for Mesoblast

Mesoblast was captivating investors long before the coronavirus. MSB/MESO experienced linear growth of 100%+ between 2019 and the coronavirus. Mainly due to its expansive, developed, and promising stem cell clinical portfolio.

Mesoblast is developing clinical drugs for cardiovascular disease, chronic back pain, inflammation, pediatric, and rare adult diseases. Currently, Mesoblast is undertaking stage 3 trials for its cardiovascular and chronic lower back pain. Combine the clinical development with a promising COVID-19 treatment, and you create a recipe for success.

Is Mesoblast worth the investment?

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

Short answer: Yes (Opinion, not advise)

We first noticed Mesoblast at the start of April. The speculation around Mesobalst’s promising stem cell drug reeled us in. However, upon digging deeper into the companies product pipeline we might have uncovered a biotech gem. Adding to the collection of other biotech bangbusters like Paradigm BioPharemcuticals (ASX:PAR), Clinuvel Pharmecuticals (ASX:CUV), and Opthea Limited (ASX:OPT).

Mesoblast is in an excellent position to catapult itself into an uncharted share price territory. The biotech is fully funded to manufacture remestemcel-l and holds an 83% survival rate under its belt. All investors need now are positive results in the upcoming phase 2/3 trial, and the share price should be bullish for a while (opinion, not advice).

If I were to invest in Mesoblast, I would employ a dynamic short term. (Opinion not advice) Where I would invest in Mesoblast, ride the COVID-19 wave, and sell. However, let’s say Mesoblast reported poor test results, and the share price went plummeting. Instead of panic and sell, I would hold for the long term. (Opinion not advice) Because Mesoblasts robust clinical pipeline and pre-coronavirus momentum should see the biotech return to its linear growth. That’s the beauty of a dynamic short term. If the short-term fails, you can ‘opt’ out into a long term investment. However, dynamic short-terms work for companies with upside growth potential.

 

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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

 

Written by Patrick McLoughlin, Senior Manager of Youth Investment Group.

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