NEW YORK, June 02, 2024 (GLOBE NEWSWIRE) -- Mesoblast Limited (NASDAQ:MESO, ASX:MSB))), Chief Executive Silviu Itescu provided a corporate update at the Bell Potter Emerging Leaders Conference. Dr. Itescu reiterated that the Company expects to file this quarter the Biologics License Application (BLA) resubmission with the United States Food and Drug Administration (FDA) for its lead product candidate Ryoncil®(remestemcel-L) in the treatment of steroid-refractory acute graft versus host disease, with potenti ...

NEW YORK, April 29, 2024 (GLOBE NEWSWIRE) -- Mesoblast Limited (NASDAQ:MESO, ASX:MSB))), global leader in allogeneic cellular medicines for inflammatory diseases, today provided an activity report for the third quarter ended March 31, 2024. Mesoblast Chief Executive Silviu Itescu said: "We are very pleased with the positive interactions we had last quarter with the FDA, having received clarity on the path to licensure for our product candidates in pediatric acute graft versus host disease and in ischemic pa ...

[Company Overview](index=4&type=section&id=Company%20Overview) [Investment Highlights](index=4&type=section&id=Investment%20Highlights) Mesoblast is developing a portfolio of allogeneic (off-the-shelf) cellular medicines for inflammatory diseases, with key late-stage assets Remestemcel-L and Rexlemestrocel-L having completed Phase 3 trials and received FDA RMAT designations - Developing off-the-shelf, allogeneic cellular medicines based on mesenchymal stromal cell (MSC) technology, eliminating the need for donor matching[8](index=8&type=chunk) - Remestemcel-L has completed a pivotal Phase 3 trial for pediatric Steroid-Refractory Graft v Host Disease (SR-aGVHD) and is collaborating with the Bone Marrow Transplant Clinical Trials Network (BMT CTN) for a pivotal trial in the larger adult SR-aGVHD market[8](index=8&type=chunk) - Rexlemestrocel-L has completed Phase 3 trials for both heart failure with reduced ejection fraction (HFrEF) and chronic low back pain (CLBP), with Regenerative Medicine Advanced Therapy (RMAT) designation granted for both indications[8](index=8&type=chunk) [Global Intellectual Property (IP) Estate](index=5&type=section&id=Global%20Intellectual%20Property%20%28IP%29%20Estate) The company holds a robust global intellectual property portfolio, providing a significant competitive advantage with over 1,100 patents and applications extending through 2040, covering composition of matter, manufacturing, and therapeutic applications, and successfully monetized through royalty and licensing agreements - Extensive patent portfolio with over **1,100 patents and patent applications** across 82 patent families, with protection extending through **2040**[9](index=9&type=chunk) - IP portfolio provides strong global protection for core commercial focus areas and enables out-licensing opportunities in non-core areas[9](index=9&type=chunk) - Demonstrated track record of IP management through a royalty agreement with JCR Pharmaceuticals in Japan and a patent license granted to Takeda's subsidiary, TiGenix[9](index=9&type=chunk) [Manufacturing and Platform Technology](index=6&type=section&id=Manufacturing%20and%20Platform%20Technology) Mesoblast has established a commercial-scale, scalable allogeneic manufacturing process that meets international regulatory standards, ensuring batch-to-batch consistency, with its underlying platform technology utilizing mesenchymal precursor/stromal cells activated by inflammatory cytokines to orchestrate an anti-inflammatory response, forming the basis for its late-stage clinical pipeline - Manufacturing process is scalable for "off-the-shelf" products and meets stringent criteria of international regulatory agencies[12](index=12&type=chunk) - Manufacturing innovations include proprietary xeno-free technologies, scaled-up 2D manufacturing, and 3D bioreactors to increase capacity and reduce cost of goods[12](index=12&type=chunk) Late-Stage Clinical Pipeline | Product | Indication | Phase 2 | Phase 3 | Regulatory Filing | | :--- | :--- | :--- | :--- | :--- | | Remestemcel-L | Pediatric SR-aGVHD | | >> | >> | | Remestemcel-L | Adult SR-aGVHD Crohn's | | >> | | | Rexlemestrocel-L | HFrEF | | >> | | | Rexlemestrocel-L | CLBP | | >> | | [Clinical Programs & Milestones](index=9&type=section&id=Clinical%20Programs%20%26%20Milestones) [2024 Clinical Program Milestones](index=9&type=section&id=2024%20Clinical%20Program%20Milestones) Mesoblast has outlined key clinical and regulatory milestones for 2024, focusing on advancing its late-stage pipeline, including FDA meetings for RYONCIL® potency data and the HFrEF approval pathway, commencement of an adult SR-aGVHD trial, and start-up activities for the Phase 3 CLBP trial Key 2024 Milestones | Program | Milestone | Target | | :--- | :--- | :--- | | **RYONCIL (remestemcel-L)** | FDA meeting regarding potency assay data for pediatric BLA | Q1 CY24 | | | Commence patient enrollment for adult SR-aGVHD trial | Q2 CY24 | | **REVASCOR (rexlemestrocel-L)** | Meet with FDA under RMAT to discuss approval pathway in adults with HFrEF | Q1 CY24 | | | Meet with FDA on congenital heart disease pathway to approval in pediatrics | Q2 CY24 | | **Inflammatory Pain (rexlemestrocel-L)** | CLBP Phase 3 trial start-up activities | Q4 FY24 | | | Phase 3 CLBP patient screening/enrollment initiates | Q1-Q2 CY25 | [Remestemcel-L for Steroid-Refractory Acute Graft Versus Host Disease (SR-aGVHD)](index=10&type=section&id=Remestemcel-L%20for%20SR-aGVHD) The Remestemcel-L (RYONCIL®) program targets SR-aGVHD, a life-threatening complication of bone marrow transplants with high mortality, advancing regulatory discussions with the FDA for the pediatric indication and initiating a Phase 3 trial for the larger adult SR-aGVHD market [Market Opportunity & Disease Overview](index=18&type=section&id=Market%20Opportunity%20%26%20Disease%20Overview) Acute Graft Versus Host Disease (aGVHD) is a severe complication of allogeneic bone marrow transplants (BMT), affecting about 50% of patients, with the steroid-refractory form (SR-aGVHD) having mortality rates as high as 90%, representing a significant unmet medical need in a global market of over 30,000 allogeneic BMTs annually with limited approved treatment options - aGVHD is a life-threatening complication occurring in **~50% of patients** receiving allogeneic BMTs, with SR-aGVHD mortality rates reaching as high as **90%**[35](index=35&type=chunk) - The market opportunity includes over **30,000 allogeneic BMTs** performed globally each year, with approximately **9,000-10,000** in the US[35](index=35&type=chunk) - There is only one approved treatment for steroid-refractory disease in the US and no approved treatment for children under 12[35](index=35&type=chunk) [Pediatric SR-aGVHD Clinical Data & Regulatory Status](index=20&type=section&id=Pediatric%20SR-aGVHD%20Clinical%20Data%20%26%20Regulatory%20Status) Clinical data for Remestemcel-L in pediatric SR-aGVHD shows consistently improved survival rates and durable long-term benefits over 4 years compared to historical controls, with Mesoblast having submitted new potency assay data to the FDA and a meeting scheduled in March 2024 to discuss the product's path to approval, as the new data indicates the current product is more potent, potentially explaining its greater impact on survival - An FDA meeting is scheduled for **March 2024** to review new potency assay data for RYONCIL, which shows the current product is more potent than earlier versions[19](index=19&type=chunk)[42](index=42&type=chunk) Long-Term Survival in Pediatric SR-aGVHD (Study GVHD001, N=51) | Time Period | Survival Rate (Remestemcel-L) | Survival Rate (Best Available Therapies¹) | | :--- | :--- | :--- | | Year 1 | 63% | 40% | | Year 2 | 51% | 35% | | Year 4 | 49% | N/A | [Adult SR-aGVHD Development Pathway](index=11&type=section&id=Adult%20SR-aGVHD%20Development%20Pathway) Mesoblast is expanding its SR-aGVHD program to adults, a market approximately five times larger than the pediatric segment, by collaborating with the Blood and Marrow Transplant Clinical Trials Network (BMT CTN) to conduct a pivotal Phase 3 trial targeting a high-need population of adults and adolescents refractory to both corticosteroids and a second-line agent like ruxolitinib, for whom there are no approved therapies and survival is as low as 20-30% at 100 days - The adult SR-aGVHD market is approximately **5-fold larger** than the pediatric market[21](index=21&type=chunk)[45](index=45&type=chunk) - A Phase 3 trial will be conducted in collaboration with BMT CTN, which is responsible for **~80% of all US transplants**[21](index=21&type=chunk)[45](index=45&type=chunk) - The trial will target patients who have failed both corticosteroids and a second-line agent (e.g., ruxolitinib), a population with 100-day survival rates as low as **20-30%**[21](index=21&type=chunk)[45](index=45&type=chunk) [Rexlemestrocel-L for Heart Disease](index=12&type=section&id=Rexlemestrocel-L%20for%20Heart%20Disease) The Rexlemestrocel-L (REVASCOR®) program is being advanced for two distinct heart disease indications: for adults with chronic heart failure (HFrEF), Mesoblast is in discussions with the FDA under an RMAT designation to define a regulatory pathway based on positive Phase 3 data, and for pediatric congenital heart disease, the product has received Rare Pediatric Disease and Orphan Drug designations following a successful randomized controlled trial, creating a potential path to a Priority Review Voucher upon approval [Chronic Heart Failure (HFrEF) in Adults](index=12&type=section&id=Chronic%20Heart%20Failure%20%28HFrEF%29%20in%20Adults) In the Phase 3 DREAM-HF trial of 537 patients, a single treatment of Rexlemestrocel-L demonstrated a reduction in major adverse cardiac events (MACE), particularly in patients with active inflammation, and Mesoblast has met with the FDA under its RMAT designation to discuss potential approval pathways for high-risk HFrEF patients with inflammation, with meeting minutes expected shortly - Met with the FDA in **Q1 CY2024** under RMAT designation to discuss potential pathways to approval for HFrEF patients with inflammation[22](index=22&type=chunk) - The **537-patient Phase 3 DREAM-HF trial** showed a single injection of rexlemestrocel-L reduced the risk of MI or stroke by **57%** in all patients and by **75%** in patients with inflammation[53](index=53&type=chunk) - Time-to-first MACE (cardiovascular death, MI, or stroke) was reduced by **28%** in all patients and by **37%** in patients with inflammation[53](index=53&type=chunk) [Pediatric Congenital Heart Disease](index=13&type=section&id=Pediatric%20Congenital%20Heart%20Disease) REVASCOR® has been granted both Rare Pediatric Disease Designation (RPDD) and Orphan Drug Designation (ODD) by the FDA for treating Hypoplastic Left Heart Syndrome (HLHS), a life-threatening congenital condition, with a randomized controlled trial showing that a single injection significantly increased left ventricle growth, potentially enabling a more successful surgical correction, and approval for this indication could make Mesoblast eligible for a valuable Priority Review Voucher (PRV) - FDA granted REVASCOR **Rare Pediatric Disease Designation (RPDD)** and **Orphan Drug Designation (ODD)** for Hypoplastic Left Heart Syndrome (HLHS)[23](index=23&type=chunk)[24](index=24&type=chunk) - A randomized controlled trial published in JTCVS Open showed a single intramyocardial injection of REVASCOR resulted in significantly increased left ventricle growth over **12 months** compared to control[24](index=24&type=chunk)[56](index=56&type=chunk) - Upon potential BLA approval, Mesoblast may be eligible to receive a **Priority Review Voucher (PRV)**, which can be sold or used to accelerate review of a future drug[59](index=59&type=chunk) [Rexlemestrocel-L for Chronic Low Back Pain (CLBP)](index=31&type=section&id=Rexlemestrocel-L%20for%20Chronic%20Low%20Back%20Pain%20%28CLBP%29) Mesoblast is advancing Rexlemestrocel-L for chronic low back pain (CLBP) due to degenerative disc disease, a condition affecting over 7 million patients in the U.S. and E.U., having gained alignment with the FDA for a pivotal Phase 3 trial using mean pain reduction at 12 months as the primary endpoint, following a prior Phase 3 trial where a single injection provided durable pain reduction for up to 36 months and showed potential to reduce opioid use [Market Opportunity & Program Summary](index=32&type=section&id=Market%20Opportunity%20%26%20Program%20Summary) CLBP represents a major market opportunity with over 7 million estimated patients in both the U.S. and E.U. who have failed conservative therapy, and Mesoblast has aligned with the FDA on a pivotal Phase 3 study design, with mean pain reduction at 12 months as the primary endpoint and functional improvement and opioid reduction as secondary endpoints, with product manufactured for the trial - The target market is estimated at over **7 million patients** in the U.S. and E.U. each suffering from CLBP due to degenerative disc disease[63](index=63&type=chunk) - Gained alignment with the FDA for a pivotal Phase 3 study, which will seek to replicate significant pain reduction seen in the first Phase 3 trial[65](index=65&type=chunk) - The pivotal trial's primary endpoint will be mean pain reduction at **12 months**, with secondary endpoints including functional improvement and reduction in opioid use[65](index=65&type=chunk) [Clinical Trial Results & Regulatory Status](index=34&type=section&id=Clinical%20Trial%20Results%20%26%20Regulatory%20Status) Rexlemestrocel-L has received RMAT designation from the FDA for CLBP, with results from the first Phase 3 trial (n=404) showing that a single injection resulted in significant and durable pain reduction at 12, 24, and 36 months, with an even more pronounced effect in a pre-specified subgroup with shorter disease duration, and demonstrated a potential for reducing opioid use, with 28% of treated patients on opioids at baseline stopping them by 36 months, versus 8% of controls - FDA granted **Regenerative Medicine Advanced Therapy (RMAT)** designation for rexlemestrocel-L in the treatment of CLBP[67](index=67&type=chunk) - A single injection resulted in significant pain reduction at **12 and 24 months** across all **404 subjects** in the first Phase 3 trial[67](index=67&type=chunk) - Among patients on opioids at baseline, **28%** receiving rexlemestrocel-L+HA were no longer taking opioids at **36 months**, compared to **8%** of saline controls[67](index=67&type=chunk) [Financial Performance](index=14&type=section&id=Financial%20Performance) [Financial Highlights (Half-Year Ended Dec 31, 2023)](index=15&type=section&id=Financial%20Highlights%20%28H1%20FY2024%29) For the half-year ended December 31, 2023, Mesoblast strengthened its financial position with US$77.6 million in cash-on-hand, demonstrating improved operational efficiency by significantly reducing its net cash usage for operating activities by 33% compared to the prior corresponding period and cutting its loss after tax by 21% Key Financial Metrics (as of Dec 31, 2023) | Metric | Value / Change | Period | | :--- | :--- | :--- | | Cash-on-hand | US$77.6 million | At Dec 31, 2023 | | Net Cash Usage (Operating) | US$26.0 million (33% reduction YoY) | Six months ended Dec 31, 2023 | | Loss After Tax | Reduced by 21% YoY | Six months ended Dec 31, 2023 | [Income Statement Analysis (Half-Year Ended Dec 31, 2023)](index=16&type=section&id=Income%20Statement%20Analysis%20%28H1%20FY2024%29) For the six months ended December 31, 2023, Mesoblast reported total revenue of US$3.4 million, primarily from royalties, and achieved a 21% reduction in loss after tax to US$32.5 million, driven by significant cost reductions in manufacturing (down 48%), R&D (down 6%), and management & administration (down 14%) compared to the same period in the prior year P&L for the six months ended (US$m) | P&L Item | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Revenue | 3.4 | 3.4 | | Research and development | (12.6) | (13.4) | | Manufacturing | (6.7) | (12.8) | | Management & administration | (11.5) | (13.3) | | Loss before tax | (32.6) | (41.5) | | Loss after tax | (32.5) | (41.4) | - Revenue of **$3.4M** was predominantly from royalties on sales of TEMCELL® HS Inj. in Japan[27](index=27&type=chunk) - Manufacturing expenditure was significantly reduced by **48%** to **$6.7 million** from **$12.8 million** in the comparative period[27](index=27&type=chunk)

mesol August 2023 Global Leader in Allogeneic Cellular M« for Inflammatory Diseases Financial Results and Operational Update for the Year Ended June 30, 2023 ASX: MSB; Nasdaq: MESO CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties a results. levels of activity, performance or achievements to differ materially from any future results. Iev ...

Mesoblast Limited (NASDAQ:MESO) Q4 2023 Results Conference Call August 30, 2023 6:30 PM ET Company Participants Dr. Silviu Itescu - Chief Executive Officer Dr. Eric Rose - Chief Medical Officer Andrew Chaponnel - Interim Chief Financial Officer Dr. Philip Krause - Board Member Conference Call Participants Louise Chen - Cantor Edward Tenthoff - Piper Sandler Sami Corwin - William Blair John Hester - Bell Potter Operator Hello and welcome to the Mesoblast Financial Results for the Period Ended June 30, 2023. ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________________ FORM 20-F ______________________________ o REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR o SHELL COMPANY REPORT PUR ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________ Form 6-K ________________________________________ Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934 Filed in the month of May 2023 for the period ended March 31, 2023 Commission File Number 001-37626 ________________________________________ Mesoblast Limited (Exact name of Registrant as specified in its charter) ________ ...

Cash Reserves SR-aGVHD is associated with mortality rates as high as 90% mesoblast ASX: MSB; Nasdaq: MESO February 2023 This presentation includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by the ...

[Unaudited Financial Statements](index=6&type=section&id=Unaudited%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including income statements, balance sheets, and cash flow statements, for the six months ended December 31, 2022 [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) The unaudited consolidated financial statements for the six months ended December 31, 2022, show a decrease in revenue and a reduced net loss compared to the prior year period, with cash and cash equivalents rising to $67.6 million due to a private placement Consolidated Income Statement Highlights (Six Months Ended Dec 31) | Metric | 2022 (USD thousands) | 2021 (USD thousands) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 3,636 | 5,977 | -39% | | **Loss before income tax** | (41,496) | (48,732) | -15% | | **Loss attributable to owners** | (41,370) | (48,590) | -15% | | **Basic losses per share (Cents)** | (5.78) | (7.50) | -23% | Consolidated Balance Sheet Highlights | Metric | As of Dec 31, 2022 (USD thousands) | As of June 30, 2022 (USD thousands) | | :--- | :--- | :--- | | **Cash & cash equivalents** | 67,619 | 60,447 | | **Total Assets** | 668,060 | 662,142 | | **Borrowings** | 102,922 | 96,634 | | **Total Liabilities** | 168,058 | 165,098 | | **Total Equity** | 500,002 | 497,044 | Consolidated Statement of Cash Flows Highlights (Six Months Ended Dec 31) | Metric | 2022 (USD thousands) | 2021 (USD thousands) | | :--- | :--- | :--- | | **Net cash outflows in operating activities** | (30,741) | (36,418) | | **Net cash outflows in investing activities** | (237) | (129) | | **Net cash inflows/(outflows) by financing activities** | 38,286 | (5,083) | | **Net increase/(decrease) in cash** | 7,308 | (41,630) | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the basis of preparation, highlighting a material uncertainty related to the company's ability to continue as a going concern, significant events like a $45.0 million private placement, and revenue primarily from JCR and Takeda royalties - A **material uncertainty** exists that may cast significant doubt on the Group's ability to continue as a going concern, as **additional funding** will be required to meet projected expenditure over the **next 12 months**[33](index=33&type=chunk) - In **August 2022**, the Group completed a **$45.0 million financing** via a global private placement to facilitate launch activities for remestemcel-L and a new Phase 3 trial for rexlemestrocel-L[44](index=44&type=chunk) - On **January 31, 2023**, the Group **resubmitted its Biologics License Application (BLA)** to the FDA for approval of **remestemcel-L** for the treatment of children with **steroid-refractory acute graft-versus-host disease (SR-aGVHD)**[163](index=163&type=chunk) Revenue from Partnerships (Six Months Ended Dec 31) | Partner | Product | 2022 Revenue (USD millions) | 2021 Revenue (USD millions) | | :--- | :--- | :--- | :--- | | JCR | TEMCELL | 3.2 | 4.6 | | Takeda (TiGenix) | Alofisel® | 0.2 | 0.2 | | Takeda (TiGenix) | Milestone | 0.0 | 1.2 | - As of **December 31, 2022**, the company had a minimum remaining financial commitment of **$19.3 million** with manufacturer Lonza, payable until **June 2024**, and **$10.2 million** in other non-cancellable purchase commitments[158](index=158&type=chunk)[159](index=159&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and operational results, highlighting key developments and future outlook [Overview](index=52&type=section&id=Overview) Mesoblast positions itself as a leader in allogeneic cellular medicines with two late-stage platforms, acknowledging a history of significant losses and anticipating continued losses as it prepares for potential commercialization - The company's two primary late-stage product platforms are **remestemcel-L** (for SR-aGVHD, ARDS, IBD) and **rexlemestrocel-L** (for CHF, CLBP)[181](index=181&type=chunk) - Key operational highlights include the **January 31, 2023 resubmission of the BLA for remestemcel-L in SR-aGVHD** and receiving **RMAT designation for rexlemestrocel-L for CLBP**[183](index=183&type=chunk)[184](index=184&type=chunk) - The company had an **accumulated deficit of $780.3 million** as of **December 31, 2022**, and anticipates **continued significant losses** as it moves towards potential commercialization[191](index=191&type=chunk)[346](index=346&type=chunk) [Results of Operations](index=56&type=section&id=Results%20of%20Operations) This section details the financial results for the three and six months ended December 31, 2022, compared to the prior year, showing decreased revenue, reduced R&D expenses, and an improved net loss primarily due to a gain on contingent consideration remeasurement [Comparison for the Three Months Ended December 31, 2022 vs 2021](index=56&type=section&id=Comparison%20for%20the%20Three%20Months%20Ended%20December%2031%2C%202022%20vs%202021) This subsection compares the financial performance for the three months ended December 31, 2022, against the same period in 2021, highlighting changes in revenue, expenses, and net loss Q2 FY23 vs Q2 FY22 Financial Comparison (USD thousands) | Line Item | Q2 2022 | Q2 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | 2,134 | 2,383 | (249) | -10% | | **Research & Development** | (7,683) | (10,198) | 2,515 | -25% | | **Manufacturing Commercialization** | (7,894) | (6,590) | (1,304) | +20% | | **Loss before income tax** | (24,557) | (26,025) | 1,468 | -6% | - The **25% decrease in R&D expenses** was driven by a **$1.8 million reduction** in third-party costs for Phase 3 trials (CLBP, CHF, ARDS) as they transitioned into patient monitoring and data analysis stages[217](index=217&type=chunk)[219](index=219&type=chunk) - Manufacturing commercialization expenses **increased by 20%** primarily due to higher costs for platform technology, potency assay work supporting the aGVHD BLA resubmission, and MSC development activities[226](index=226&type=chunk)[227](index=227&type=chunk) [Comparison for the Six Months Ended December 31, 2022 vs 2021](index=63&type=section&id=Comparison%20for%20the%20Six%20Months%20Ended%20December%2031%2C%202022%20vs%202021) This subsection compares the financial performance for the six months ended December 31, 2022, against the same period in 2021, detailing changes in revenue, expenses, and net loss H1 FY23 vs H1 FY22 Financial Comparison (USD thousands) | Line Item | H1 2022 | H1 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | 3,636 | 5,977 | (2,341) | -39% | | **Research & Development** | (13,430) | (19,526) | 6,096 | -31% | | **Fair value remeasurement of contingent consideration** | 5,989 | (71) | 6,060 | NM | | **Loss before income tax** | (41,496) | (48,732) | 7,236 | -15% | - The **39% decrease in revenue** was due to a **$1.4 million decline in TEMCELL royalties** and the absence of a **$1.2 million milestone payment** from Takeda that was recognized in the prior period[253](index=253&type=chunk)[255](index=255&type=chunk) - The net loss improved partly due to a **$6.0 million gain** on the remeasurement of contingent consideration, resulting from changes in assumptions like probability of payment and development timelines[271](index=271&type=chunk) [Liquidity and Capital Resources](index=69&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2022, Mesoblast held $67.6 million in cash, with a significant inflow from a $45.1 million private placement, but reiterates the need for additional funding to meet future expenditures and address going concern uncertainty Cash Flow Summary (Six Months Ended Dec 31, USD thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Operating Activities** | (30,741) | (36,418) | | **Investing Activities** | (237) | (129) | | **Financing Activities** | 38,286 | (5,083) | | **Net Change in Cash** | 7,308 | (41,630) | - The company's **cash position was $67.6 million** as of **December 31, 2022**, with management highlighting a **material uncertainty** regarding its ability to continue as a going concern without additional funding[289](index=289&type=chunk) - The company has a **$90.0 million five-year credit facility** with Oaktree, of which **$60.0 million was drawn** at closing, and in **December 2022**, Oaktree extended the availability of up to an **additional $30.0 million**, subject to milestones[302](index=302&type=chunk) [Risk Factors](index=78&type=section&id=Risk%20Factors) This section outlines various risks that could materially affect the company's business, financial condition, and results of operations, including financial, clinical, regulatory, manufacturing, and other operational challenges [Risks Related to Financial Position and Capital Requirements](index=78&type=section&id=Risks%20Related%20to%20Financial%20Position%20and%20Capital%20Requirements) This section emphasizes the company's significant financial risks, including a history of substantial operating losses, an accumulated deficit of $780.3 million, and the unlikelihood of achieving profitability in the foreseeable future, necessitating substantial additional financing - The company has incurred operating losses since inception, with an **accumulated deficit of $780.3 million** as of **December 31, 2022**, and anticipates **continued substantial losses**[346](index=346&type=chunk) - There is a **material uncertainty** regarding the company's ability to continue as a going concern, as **additional funding** is required to meet projected expenditures over the **next 12 months**[357](index=357&type=chunk) - The loan facility with Oaktree requires maintaining a **minimum unrestricted cash balance of $35.0 million** in the United States[358](index=358&type=chunk) [Risks Related to Clinical Development and Regulatory Review and Approval](index=81&type=section&id=Risks%20Related%20to%20Clinical%20Development%20and%20Regulatory%20Review%20and%20Approval) The company faces significant risks due to the novel nature of its mesenchymal lineage cell technology, making development timelines and costs difficult to predict, with unpredictable regulatory approval processes, as evidenced by the FDA's September 2020 Complete Response Letter for remestemcel-L - The **novelty of the company's cell therapy platform** makes it **difficult to predict development time, cost, and the likelihood of regulatory approval**[363](index=363&type=chunk) - In **September 2020**, the FDA issued a **Complete Response Letter** for the **remestemcel-L BLA**, recommending at least one **additional randomized, controlled study** despite a positive ODAC vote[405](index=405&type=chunk) - The **BLA for remestemcel-L was resubmitted on January 31, 2023**, with an anticipated **six-month review period** if accepted by the FDA, but **approval is not guaranteed**[406](index=406&type=chunk) [Risks Related to Manufacturing and Supply Chain](index=93&type=section&id=Risks%20Related%20to%20Manufacturing%20and%20Supply%20Chain) Mesoblast has no experience manufacturing its products at a commercial scale and is entirely dependent on its contract manufacturer, Lonza, creating risks related to production capacity, quality control, pricing, and potential supply disruptions, further complicated by reliance on a limited number of suppliers for critical raw materials - The company has **no internal manufacturing capability** and is **dependent on its contract manufacturer, Lonza**, for the supply of its product candidates for both clinical and potential commercial use[425](index=425&type=chunk)[432](index=432&type=chunk) - The manufacturing process relies on a **limited number of suppliers** for **critical materials**, including **fetal bovine serum (FBS)**, which could be subject to supply interruptions[437](index=437&type=chunk)[466](index=466&type=chunk) - Supply chain and manufacturing could be adversely affected by **geopolitical instability, climate events, and the COVID-19 pandemic**, potentially increasing costs and causing delays[431](index=431&type=chunk) [Other Risks](index=91&type=section&id=Other%20Risks) This section consolidates various other risks, including reliance on collaborators, commercialization challenges, intellectual property uncertainties, and business/industry risks, alongside a shareholder class action lawsuit and high dependence on key personnel - The company is **highly dependent on key personnel**, particularly **CEO Dr. Silviu Itescu**, a pioneer in the field of cell therapeutics[485](index=485&type=chunk) - A **shareholder class action lawsuit** was filed against the company in Australia in **mid-2022**, relating to the **FDA's Complete Response Letter** for its GvHD product and representations made about its COVID-19 candidate[520](index=520&type=chunk) - Future commercial success is **highly dependent on obtaining adequate coverage and reimbursement** from government and private payors, which is **uncertain for novel, potentially high-cost cell therapies**[454](index=454&type=chunk)[460](index=460&type=chunk)

Financial Data and Key Metrics Changes - As of September 30, 2022, cash on hand was $85 million, with an additional $40 million available from existing financing facilities subject to milestones [12] - Net cash usage for operating activities in the quarter was $14.3 million, representing a 22% reduction of $3.9 million compared to the same quarter in FY 2022, and a 47% reduction of $12.5 million compared to the same quarter in FY 2021 [13] - Revenue from royalty on sales of TEMCELL in Japan for the quarter was $1.4 million, with a 9% increase in royalties for the 12-month period ended September 30, 2022, totaling $7.7 million [14][15] Business Line Data and Key Metrics Changes - The majority of revenue changes were attributed to a one-off licensing milestone in the prior period and currency movements, with a 23% decrease in R&D, manufacturing, and management administration expenditures totaling $5.2 million [15] - Prelaunch manufacturing activities and product testing for remestemcel continued, with inventory valued at $28 million to be recognized upon FDA approval [16] Market Data and Key Metrics Changes - The market opportunity for rexlemestrocel in chronic low back pain is significant, with approximately 6 million to 7 million patients suffering from inflammatory chronic low back pain in the U.S. and EU5 [27] - Cardiovascular disease remains the leading cause of death in the U.S., affecting 6.5 million to 7 million patients annually, highlighting the unmet need for heart failure treatments [34] Company Strategy and Development Direction - The company is focused on addressing significant unmet medical needs, particularly in pediatric acute graft-versus-host disease with remestemcel-L, which has received fast track designation and BLA priority review from the FDA [4][26] - The strategy includes advancing rexlemestrocel for chronic low back pain and chronic heart failure, with plans for confirmatory Phase III trials and potential partnerships for commercialization [32][56] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of the long-term survival data for remestemcel-L as a cornerstone for BLA resubmission, indicating confidence in the product's potential impact on patient outcomes [39] - The company is building commercial capabilities in anticipation of product approval and launch, aiming for immediate market entry post-approval [44] Other Important Information - The company has generated new data from an observational survival study, showing improved survival outcomes for patients treated with remestemcel compared to best available therapies [7][26] - The company is finalizing trial designs for both chronic low back pain and heart failure, with expectations to start trials in 2023 [56] Q&A Session Summary Question: Can you comment on the commercial launch timeline for remestemcel-L after approval? - Management expects to launch the product immediately after approval, with a review period of 2 to 6 months due to priority review designation [41][44] Question: What is the pathway to approval for the heart failure opportunity? - The company plans to meet with the FDA to discuss the totality of data and has an RMAT designation in place for the LVAD population [45] Question: How does the new survival data relate to the CRL response? - The new survival data has not yet been provided to the FDA and will be filed shortly, meaning the review clock has not started yet [48][50] Question: What are the plans for advancing the lower back pain study into Phase III? - The company expects to begin two trials in the second or third quarter of 2023, with pain reduction as the primary endpoint [56]