Mesoblast to Mass-Produce Stem-Cell Medicines in Pact With Lonza

Mesoblast Ltd. (MSB), the world’s largest developer of stem-cell treatments, will form a manufacturing alliance with Lonza Group AG (LONN) as it prepares to mass-produce its regenerative therapies.

Under the agreement, Mesoblast can instruct Basel, Switzerland-based Lonza to build a dedicated manufacturing plant for its products in exchange for buying “agreed quantities” of those items, the companies said in a joint statement today.

Mesoblast’s experimental spinal and heart failure treatments are in the final of three stages of patient studies usually required by regulators. The Melbourne-based has gained 181 percent to A$7.60 over the past 12 months, making it the best- performing stock on Australia’s S&P/ASX 200 Index. Lonza is the world’s biggest maker of drug ingredients and also offers contract manufacturing for pharmaceutical companies.

“It means that we as a company have taken out the entire risk of the manufacturing by shifting it” to Lonza, Mesoblast Chief Executive Officer Silviu Itescu said in an interview. The alliance would guarantee long-term supply of its products, according to the statement, which was released after markets closed in Australia and Switzerland.

Lonza is planning a secondary listing on the Singapore Stock Exchange in the fourth quarter of 2011, the company said on Sept. 16.

To contact the reporter on this story: Natasha Khan in Hong Kong nkhan51@bloomberg.net

To contact the editor responsible for this story: Jason Gale at j.gale@bloomberg.net

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