Mesoblast Shares Climb as Celgene Invests $45 Million

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Mesoblast Ltd. jumped the most in almost a decade in Sydney trading after the developer of stem-cell therapies agreed to sell a minority stake to U.S.-based Celgene Corp. for A$58.5 million ($45 million).

The stock rose 24 percent to A$3.99, it biggest gain since May 2005.

The Summit, New Jersey-based Celgene will pay A$3.82 each for 15.3 million shares, Mesoblast said in a statement today. That’s 19 percent higher than Mesoblast’s closing price of A$3.21 on April 10. Celgene, the maker of the cancer drug Revlimid, will gain six-month right of first refusal on Mesoblast’s stem-cell product candidates for conditions including inflammatory bowel disease and certain oncological ailments.

“They are a world leader in immunology and oncology with very strong franchises. It makes sense for some of our leading products in those indications to be potentially partnered with Celgene,” Mesoblast’s Chief Executive Officer Silviu Itescu said in a telephone interview today.

Celgene would be purchasing about 4.5 percent of Mesoblast, Itescu said. Details of the partnership are being discussed, he said, adding that the discussion is about global rights excluding Japan, where Mesoblast already partners with JCR Pharmaceuticals Co..

Mesoblast has several candidates in the last stage of development. One product is for treating acute graft versus host disease, a complication that can occur after a stem-cell or bone-marrow transplant and another is for refractory Crohn’s disease. Celgene has sought to diversify through partnerships with other biotechnology firms. Its shares closed 1.3 percent higher at $117.07 in New York trading Friday.

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