This study is designed for lung transplant patients who have developed chronic lung allograft dysfunction (CLAD). Consented patients will receive 4 intravenous doses of allogeneic, bone-marrow-derived MSCs (2*10^6 cells/kg/dose) or matching placebo over a period of 2 weeks with a 12 month follow up.

This is a phase 2, multi-center, randomized study (n=82, 1:1 MSC:placebo) where consented patients will receive 4 intravenous doses of IMP over a period of 2 weeks. Patients must provide written informed consent and meet the all Inclusion Criteria and none of the Exclusion Criteria to be eligible. Screening procedures include obtaining medical history, current medications, questionnaires, vital signs, Chest Xray, 6 Minute walk test and blood tests. Historical chest CT and full lung function from 12 weeks prior to screening may be used. Bronchoscopy with biopsy must have been performed no more than 6 months prior to screening. A bronchoscopy with bronchoalveolar lavage (BAL) is required, however will not need to be repeated if performed within 14 days prior to the baseline visit. Patients will then receive 4 infusions of MSC/placebo over a period of 2 weeks, with follow up at Week 3,6,10,14,28,41 and week 54.

Inclusion Criteria:

1. Bilateral lung transplant recipients aged ≥ 18 years and at least 6 months post-transplant. Patients with other organs transplanted (eg heart, liver, kidney) or those who have undergone lobar transplantation, or re-transplantation, are potentially eligible.
2. New-onset CLAD (defined as a persistent (3weeks apart) fall in FEV1 of at least 20% from the mean of the two best post-transplant values taken at least 3 weeks apart) in the 12 months prior to the screening visit. Other causes of a fall in FEV1 (acute cellular or humoral rejection, active infection, anastomotic stenosis etc.) must be excluded as per international guidelines.
3. Stable immunosuppression regimen, as assessed by the investigator, in the 8 weeks prior to the screening visit.
4. Available for all specified assessments at the study site through the completion of the study, including the protocol bronchoscopies.
5. Provision of written informed consent.

Exclusion Criteria:

1. Any condition that in the opinion of the Investigator may interfere with the safety of the patient, his / her completion of required follow-up visits or evaluation of the study objectives
2. Untreated cellular or humoral rejection
3. Clinically meaningful and untreated viral, bacterial or fungal infection
4. Use of azithromycin or another macrolide antibiotic, if commenced within 8 weeks of the screening visit
5. Intravenous pulsed methylprednisolone, within 4 weeks of the screening visit
6. Use of extracorporeal photopheresis, within 4 weeks of the screening visit
7. Use of total lymphoid irradiation, within 4 weeks of the screening visit
8. Poor functional status not expected to survive 6 months
9. Allergy to beef products
10. Women who are pregnant, breast-feeding or unwilling to use adequate contraception
11. Patients who are currently participating in another interventional clinical trial

De-identified data will be analysed and shared with collaborators with the plan to publish the results.