Mesoblast (MESO) - 2024 Q4 - Annual Report

Financial Performance - Revenue for FY24 was US$5.9 million, a decrease of 21% compared to US$7.5 million in FY23[551]. - Loss before income tax for FY24 was US$88.1 million, compared to US$82.1 million in FY23[551]. - Market capitalization increased by A$206 million (22%) to A$1,130 million as of June 30, 2024, from A$924 million in the previous year[551]. - The company successfully reduced net operating cash usage by 23% in FY24 compared to FY23[553]. - Mesoblast raised US$40 million in December 2023 and US$25 million in March 2024 to strengthen its balance sheet[553]. Cash Flow and Funding - As of June 30, 2024, the company held total cash reserves of $63.0 million, with net cash usage for operating activities reduced by 23% to $48.5 million compared to the previous year[485]. - Net cash outflows in operating activities decreased by $14.8 million from $63.3 million in the year ended June 30, 2023, to $48.5 million in 2024[487]. - Net cash inflows from financing activities decreased by $34.2 million, primarily due to reduced proceeds from private placements[491]. - The company expects to continue incurring losses as it develops and seeks regulatory approvals for its cell-based product candidates, necessitating substantial additional funding[492]. Regulatory and Product Development - The company anticipates significant milestones in the upcoming financial year related to its lead product candidates, with a BLA for remestemcel-L resubmitted to the FDA and a PDUFA goal date set for January 7, 2025[482]. - The FDA supports an accelerated approval pathway for rexlemestrocel-L in patients with end-stage ischemic heart failure with reduced ejection fraction (HFrEF) and a left ventricular assist device (LVAD)[520]. - The confirmatory Phase 3 trial of rexlemestrocel-L for chronic low back pain (CLBP) has commenced enrollment at multiple sites across the United States[522]. - The company resubmitted its Biologics License Application (BLA) for remestemcel-L for pediatric patients with SR-aGVHD, which was accepted by the FDA in July 2024[552]. - Mesoblast entered into an agreement to develop a pivotal trial of remestemcel-L in adults with SR-aGVHD with the Blood and Marrow Transplant Clinical Trials Network[555]. Executive Compensation and Remuneration - The CEO and CMO volunteered a 30% base salary reduction for 12 months, with an option grant approved by shareholders to align their interests with those of shareholders[523]. - The Board decided against awarding any increases to fixed remuneration prior to FDA approval for pediatric SR-aGVHD[524]. - The short-term incentive (STI) key performance indicator performance for FY24 achieved 100% of maximum, but payment is deferred until FDA marketing authorization is obtained[528]. - The remuneration framework received a 94% approval vote from investors at the 2023 AGM, reflecting positive reception of the responsible management of remuneration[525]. - Total statutory remuneration for executive directors in FY24 was A$5,311,610, representing a 66% increase from FY23's A$3,200,854[571]. Employee and Diversity Metrics - As of June 30, 2024, 52% of the company's employee base were female, and 30% of senior executives were female, indicating a commitment to diversity[547]. - The company has only 73 employees, with 57% based in the US, emphasizing the importance of retaining top talent for achieving long-term goals[536]. - The breakdown of employees includes 30 in Research & Development, 4 in Manufacturing, and 39 in Corporate roles in the USA[635]. Risk Management - The company is subject to interest rate risk, share price risk, price risk, and foreign currency exchange risk, with sensitivity analyses conducted to assess these risks[475]. - The company has established a risk management policy to identify and control material risks[629]. Board and Governance - The board of directors consists of seven members, including two executive directors: Silviu Itescu and Eric Rose[621]. - The Audit and Risk Committee oversees auditing and accounting matters, including the selection of independent accountants[628]. - The Nomination and Remuneration Committee is responsible for board appointments and executive remuneration frameworks[627]. - The board aims for a majority of independent directors, adhering to ASX's Corporate Governance Principles[623].