Balancing Ethics, Strategy and Regulation: Mesoblast's Journey with Drug Ryoncil

An Australian biotechnology company, Mesoblast, with branches in the United States and Singapore, sought the Federal Drug Administration’s (FDA) approval of a key drug candidate, Ryoncil. The FDA did not approve Ryoncil and requested additional phase three clinical trials. Investors questioned Mesoblast’s overly optimistic public statements about the clinical trials. Investors filed shareholder class action lawsuits claiming that Mesoblast was not transparent, causing them to incur significant losses. Management decided to pursue FDA’s formal conflict resolution process (advisory panel) and requested FDA acceleration of the Ryoncil approval process rather than conduct additional clinical trials. Students are asked to assess Mesoblast’s past decisions in ethics and legal/regulatory methods to resolve conflict with investors and the FDA in light of the company’s strategic goals and implementation process.
In completing this assignment, students should be able to:
- Assess the ethical appropriateness of company actions toward key stakeholders in conflict situations. (L01)
- Evaluate the role that legal and regulatory issues play in conflict resolution with the FDA and investors. (L02) Journal of Case Studies, Volume 42, Issue 2 2
- Determine the most appropriate strategic model for mitigating legal and ethical conflicts with biotech firms. (L03)