Mesoblast Receives Medicaid Coverage for Ryoncil, First Patients Begin Treatment

Mesoblast Limited (ASX:MSB; Nasdaq:MESO) has secured U.S. Medicaid coverage for its FDA-approved mesenchymal stromal cell (MSC) therapy, Ryoncil (remestemcel-L). The move grants access to treatment for approximately 40% of U.S. children covered under Medicaid suffering from steroid-refractory acute graft versus host disease (SR-aGvHD).

The first three paediatric patients have commenced treatment this week, marking the commencement of revenues for the drug, after it was made available for purchase last week.

Medicaid Approval Opens Up U.S. Market

The Medicaid National Drug Rebate Agreement (NDRA) ensures that Ryoncil will be reimbursed for inpatient and outpatient care, significantly expanding its commercial reach. U.S. states may opt for immediate coverage, with mandatory inclusion in Medicaid programs set to begin on July 1, 2025. This development positions Mesoblast for accelerated revenue growth in the U.S. market, where private insurers already cover the therapy.

Ryoncil is the first FDA-approved MSC therapy for any indication and is designed to treat paediatric patients as young as two months old. The treatment is administered intravenously over a four-week period and targets severe inflammation associated with SR-aGvHD, a life-threatening condition with high mortality rates.

Strategic Win for Mesoblast’s Commercial Expansion

Mesoblast Chief Executive Dr. Silviu Itescu said: “We are delighted to be commencing treatment with Ryoncil® for children suffering with SR-aGvHD and are proud that the product is available to all children in the U.S. irrespective whether they have private insurance or Medicaid. This is a significant commercial achievement by our team and partners who are driven by an overwhelming desire to help children and their families faced with this devastating disease.”

This development follows Mesoblast’s ongoing efforts to expand its MSC-based therapies into broader inflammatory disease markets. Ryoncil is also in development for adult SR-aGvHD and biologic-resistant inflammatory bowel disease, while Mesoblast’s other lead candidate, rexlemestrocel-L, is being evaluated for chronic heart failure and lower back pain.

Mesoblast’s New Drug and its Market

Annually in the United States approximately 10,000 patients undergo an allogeneic bone marrow transplant, 1,500 of whom are children. Approximately 50% develop aGvHD and almost half of those do not respond to steroids, the recognized first-line treatment.

In a single-arm multi-centre Phase 3 trial of children with SR-aGvHD, 89% of whom had high severity Grade C or Grade D disease, 70% achieved an overall response by Day 28 of treatment with RYONCIL, a measure that predicts survival in aGVHD. RYONCIL treatment was not discontinued or interrupted in any patient for any laboratory abnormality, and the full course was completed without interruption in more than 85% of patients. The full Phase 3 clinical study results are available in Biology of Blood and Marrow Transplantation.