Melbourne, Apr 9, 2008 (ABN Newswire) - Australia''s adult stem cell company, Mesoblast Limited (ASX: MSB)(USOTC: MBLTY), today announced that it will accelerate its clinical trial timetable towards commencement of a Phase 3 trial in spinal fusion by mid 2009 following encouraging preliminary safety data from its ongoing Phase 2 clinical trial.

Accelerated Clinical Trial Program

The Company is pleased that in the current, single-centre Phase 2 trial for spinal fusion using its' allogeneic (or "off the shelf") proprietary adult mesenchymal precursor cells (MPCs), no cell-related adverse events have been reported in up to five months of follow-up. In this trial safety outcomes are compared between patients randomised to receive either implantation into the spine of autograft alone (patients' own bone transplanted from the pelvis) or Mesoblast's allogeneic MPCs.

Mesoblast will now expand its Phase 2 Spinal Fusion clinical trial activities to include up to 10 new major clinical trial sites in the United States. This will serve to accelerate the company's US Food and Drug Administration (FDA) submission process for an intervertebral spinal fusion product.

To lead this multi-centre clinical effort, Mesoblast has appointed Dr James Ryaby as Vice President of Research and Clinical Affairs. Dr Ryaby, who is based in the US, has extensive expertise in clinical development of orthopaedic and bone regenerative technologies, including successful execution of large, multi-centre Phase 3 clinical trials for publicly-listed US companies.

"Mesoblast possesses cutting-edge regenerative medical technology. I am delighted to have the opportunity of leading Mesoblast's clinical programs towards achieving commercial product registration," Dr Ryaby said.

Large target market

The number of spinal fusion procedures in the United States alone is expected to exceed 500,000 annually by 2010. Today, the bone regenerative biologic drug component of a single spinal fusion procedure receives reimbursement of approximately US$5,000. An even greater amount is reimbursed for the hardware (rods, screws, cages etc.) used for each procedure.

Mesoblast is targeting the existing biologic drug market by seeking to obtain US FDA approval for a stem cell product that will be implanted by a minimally invasive technique together with existing hardware to achieve intervertebral body spinal fusion.

Funding and commercial opportunities

Mesoblast is sufficiently funded and well on track to meet all milestones necessary to submit an application to the FDA to begin a Phase 3 registration trial for intervertebral body spinal fusion.

As part of its core business development plan, Mesoblast will engage in commercial discussions with key potential strategic partners during this time period.

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