Swiss pharma Novartis has inked an exclusive licence and collaboration agreement with Mesoblast to develop remestemcel-L for acute respiratory distress syndrome (ARDS), including COVID-19-associated ARDS.

Currently, remestemcel-L is being studied in COVID-19-related ARDS in an ongoing 300-patient phase III study.

ARDS carries an approximate 40% mortality rate with the current standard of care, which includes prolonged ICU treatment and mechanical ventilation.

Under the licence agreement, Novartis will acquire the worldwide rights to develop, commercialise and manufacture remestemcel-L for ARDS and will also gain access to Mesoblast’s cell-therapy platform.

Novartis will pay $25m upfront and also invest $25m in Mesoblast equity, with additional payments and royalties dependent on the achievement of agreed development, regulatory and commercial milestones.

In addition, Novartis has the option to distribute remestemcel-L for graft versus host disease (GVHD), while both parties have rights to co-fund development and commercialisation of the drug for other non-respiratory indications.

“We believe that Novartis is uniquely placed to advance this important potential new therapy. Novartis is committed to, and has demonstrated success with, cell-based therapies and transforming care for a spectrum of respiratory diseases,” said John Tsai, head of global drug development and chief medical officer for Novartis.

“This makes remestemcel-L an important addition to our pipeline. It has the potential to be the first treatment for the most critically ill ARDS patients, and it provides us with an opportunity to apply years of specialised experience directly to the work of saving lives,” he added.

In March, a compassionate use programme, including 12 patients with COVID-19-related ARDS, demonstrated that remestemcel-L treatment was associated with an 83% survival rate.

Novartis also intends to launch a phase III study of the treatment in non-COVID-19-related ARDS after the licence agreement closes and the current COVID-19-related ARDS study completes.