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Reporting Season: Mesoblast Ltd (MSB.ASX)

Reporting Season: Mesoblast Ltd (MSB.ASX)

Edward Heng

Reporting Season: Mesoblast Ltd (MSB.ASX)

Maqro Research Team Coverage

Overall strong performance, with 92% increase in revenues and 13% reduction in loss after tax despite increased investment in commercial readiness for the potential launch of RYONCIL in the US.

Key event in near-term being the potential FDA approval of RYONCIL


Detailed Outlook:

No specific guidance was provided.

Pg 71 of Annual Report:

    • Expect management and admin expenses to remain consistent over next 12 months.
    • Expect R&D expense to increase as expansion on market opportunities for late stage clinical products continues.
      • R&D may decrease if MSB is able to successfully partner their late stage clinical product
    • Subject to achieving regulatory approval, can expect increase in total expenses due to increases in product manufacturing, selling, general and admin expenses.
      • Hence need additional capital to fund operations, which “we may raise through a combination of equity offerings, debt financing, 3rd party funding, marketing & distribution arrangements and other collaborations, strategic allicances and licensing arrangements”.
    • We do not expect to generate significant revenue from product sales unless regulatory approval and commercialization takes place.
  • Production capacity for TEMCELL is being increased as JCR has received orders far in excess of its initial forecast.


Future Plans:

Balance Sheet Use:

  • Cash on hand US$129.3m (as of June 30, 2020).
    • Additional US$67.5m may be available through existing financing facilities and strategic partnerships over next 12 months.
  • Capital will be used for:
    • Commercial launch of RYONCIL for acute GVHD.
    • Scale-up of manufacturing for projected increase in capacity requirements for maturing pipeline, including GVHD label extensions and COVID-19 ARDS.
    • Clinical programs supporting label extension strategies and regulatory approvals of Phase 3 assets.

Remestemcel – L (RYONCIL) for Pediatric SR-aGVHD:

  • ODAC of FDA voted 9-1 in favor.
  • Biologics License Application (BLA) is under priority review by the FDA with an action date of 30/09/2020.
    • If approved, MSB plans to launch RYONCIL in the US in Q4CY2020 in children and adolescents up to 18y.o.
  • Building out efficient, targeted sales force – 15 centers account for ~50% of patients.

Remestemcel – L for Adults with COVID-19 Acute Respiratory Distress Syndrom (ARDS):

  • A phase 3 randomized controlled trial is being conducted in 300 ventilator-dependent patients with moderate to severe COVID-19 ARDS. Up to 30 leading medical centers across the US are taking part in the trial which is expected to complete recruitment during Q4CY2020.
  • Scale Up – Manufacturing:
    • Increase manufacturing footprint for capacity extension.
    • Implement proprietary xen-free tech to increase yields and output.
    • Plan for long-term move to 3D bioreactors to reduce labor and improve manufacturing efficiencies.
  • Establish further manufacturing and commercialization partnerships.

Rexlemestrocel (REVASCOR) for Advanced Chronic Heart Failure:

  • Phase 3 trial data readout is expected during Q4 CY2020.

Rexlemestrocel (MPC-06-ID) for Chronic Low Back Pain:

  • Data readout for the 2:1 randomized placebo-controlled US Phase 3 trial in 404 patients is expected during Q4 CY2020.
    • Results from the Phase 3 trials will be considered pivotal to support regulatory approval in the US and in Europe.
      • Obtain clearance from European regulatory authorities to begin European Phase 3 trial.

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