Mesoblast Receives Clearance to Begin Phase 2 Clinical Trial of Mesenchymal Precursor Cells in Diabetic Nephropathy

Mesoblast Receives Clearance to Begin Phase 2 Clinical Trial of Mesenchymal
Precursor Cells in Diabetic Nephropathy

NEW YORK, N.Y., June 25, 2013 (GLOBE NEWSWIRE) --
Key Points:

∙ Mesoblast has received ethics approvals to begin a clinical trial of its
proprietary allogeneic, or “off-the-shelf”, adult Mesenchymal Precursor Cells
(MPCs) in people with chronic kidney disease and type 2 diabetes
· Trial is a randomized, double-blind placebo-controlled dose escalation study
to evaluate the safety, tolerability and effectiveness of a single intravenous
infusion of MPCs over an initial period of three months in patients with Stage
3b or 4 diabetic nephropathy
· Mechanisms of action, based on preclinical studies, may include
immunomodulation and reduction of kidney inflammation, reversal of abnormal
kidney blood flow, and repair/regeneration of kidney tissue
· Mesoblast's intravenous product is currently being evaluated in a range of
inflammatory/immunologic conditions where the immunomodulatory properties of
MPCs may provide substantial benefits, including diabetic nephropathy, early
type
2 diabetes, and rheumatoid arthritis.

Melbourne, Australia; 26 June 2013 and New York, USA; 25 June 2013:
Regenerative medicine company Mesoblast Limited (ASX:MSB; USOTC:MBLTY) today
announced that it has received approvals from Australian ethics committees to
commence a Phase 2 trial evaluating a single intravenous infusion of its
proprietary allogeneic or “off-the-shelf” adult Mesenchymal Precursor Cells
(MPCs) in patients with type 2 diabetes and advanced kidney disease, or
diabetic nephropathy.

Ethics approvals for the two selected doses were obtained after safety data
were reviewed from the ongoing 60-patient Phase 2 trial evaluating a single
intravenous infusion of MPCs in people with early type 2 diabetes without
kidney disease.

The randomized, placebo-controlled, dose-escalating Phase 2 trial will
evaluate the safety and efficacy of 150 million or 300 million
intravenously-injected MPCs against placebo in 30 people with advanced
diabetic nephropathy. Over a 12-week period, the effects of an MPC infusion
will be evaluated on kidney function and protein loss, kidney blood flow,
glucose control and markers of inflammation.

Diabetes is the leading cause of kidney failure, accounting for more than 40%
of all cases of end stage kidney disease. According to GlobalData, the 2011
United States prevalence of chronic kidney disease (CKD) is estimated at 15
million, with approximately 250,000 incident cases of CKD Stages 3b and 4, the
target patient population for MPC therapy.

Diabetic kidney disease or diabetic nephropathy is associated with
longstanding inflammation of various tissues, including the kidneys, vascular
dysfunction of the kidney as a result of the inflammatory environment, and
loss of normally functioning kidney tissue. Mesoblast’s preclinical
studies in both diabetic and non-diabetic animal models have shown that
intravenously delivered allogeneic MPCs can both reduce systemic inflammation
and reverse vascular endothelial dysfunction. Additional studies in rodent
models of diabetic kidney disease have shown that intravenously administered
mesenchymal lineage stem cells can directly reverse abnormal kidney pathology
and improve function via secretion of factors that enhance regeneration and
repair of kidney tissue.

Together with the glucose-lowering effects that Mesoblast has observed
following intravenously administered MPCs in both mice and non-human primates
with experimental and natural models of type 2 diabetes, these additional
mechanisms of action suggest that MPCs may have an important potential benefit
on the principal complication of type 2 diabetes, diabetic kidney disease.

Mesoblast Chief Executive Professor Silviu Itescu said: “The prognosis for
patients with diabetic kidney disease is grim. Despite advances in dialysis
and kidney transplantation, fewer than 50% of those with end stage kidney
disease are alive five years after diagnosis. We believe that our proprietary
MPCs may provide a benefit to patients suffering from diabetic nephropathy.”

About Diabetic Nephropathy
The definition of chronic kidney disease (CKD) is based on the presence of
kidney damage or decreased kidney function for three months or more,
irrespective of clinical diagnosis. About 40% of people with diabetes are
eventually affected by kidney disease. CKD leads to progressive deterioration
in the body’s ability to remove excess fluid and metabolic wastes as defined
by the glomerular filtration rate. Ultimately, this leads to end stage renal
disease or Stage 5 CKD with renal replacement therapy (kidney transplantation
or dialysis) currently the only options. Diabetic nephropathy remains by far
the most common cause of end stage renal disease (ESRD) for which the only
treatment options are dialysis or kidney transplant. Diabetes accounts for 40%
to 45% of ESRD cases (94% type 2 diabetes, 6% type 1 diabetes), and for more
than 20% of kidney transplants in the United States. Diabetes mellitus
currently affects over 8% of the world’s adult population. It has been
predicted that the coming global increase in diabetes mellitus will be 2.7%, a
level 1.7 times the anticipated annual growth in the world’s population.

References: Williams M. Diabetic Kidney Disease. Med Clin N Am 97 (2013);
Levey AS, Eckardt KU, Tsukamoto Y et al. Definition and classification of
chronic kidney disease: a position statement from Kidney Disease: Improving
Global Outcomes (KDIGO). Kidney Int 2005; 67: 2089– 2100;Levey AS, Coresh J.
Chronic kidney disease. Lancet 2012; 379: 165–180.

About Mesoblast
Mesoblast Limited (ASX:MSB; USOTC:MBLTY) is a world leader in the development
of biologic products for the broad field of regenerative medicine. The
Company’s technologies include its proprietary adult Mesenchymal Precursor
Cell (MPC) technology platform for bone marrow and adipose tissue derived
products, Dental Pulp Stem Cells (DPSCs) and expanded Hematopoietic Stem Cells
(HSCs). Mesoblast’s allogeneic or ‘off-the-shelf’ regenerative medicine
products focus on repair of damaged issues and modulation of inflammatory
responses in conditions with significant unmet medical needs. The lead product
candidates use its MPC platform in three major and distinct areas - systemic
inflammatoryconditions, cardiovascular diseases and orthopedic diseases of
the spine. www.mesoblast.com

CONTACT:Julie Meldrum
         Corporate Communications
         Mesoblast Limited
         T: +61 (0) 3 9639 6036
         E: julie.meldrum@mesoblast.com