Mesoblast Retires Senior Debt with Non-Dilutive, Lower Cost, Five-Year Credit Line

Core Viewpoint - Mesoblast Limited has secured a new credit facility of up to US$125 million, significantly improving its financial flexibility and reducing its cost of capital while allowing for strategic partnerships and commercialization opportunities [1][4]. Financial Summary - The new credit facility includes an initial drawdown of US$75 million, which is unsecured until the repayment of the NovaQuest debt by July 8, 2026, after which the total facility will be secured by the Temcell royalty [2][3]. - The facility has a fixed interest rate of 8.00% per annum, with a five-year interest-only period, representing a substantial reduction in overall cost compared to existing debt facilities [2][3]. Strategic Implications - The new facility does not encumber any of Mesoblast's material assets or intellectual property, providing total flexibility for the company in terms of additional unsecured debt or licensing activities [3]. - Dr. Gregory George, the provider of the facility, will receive warrants to purchase approximately 323,000 American Depositary Shares (ADSs) at a price of US$21.51 per ADS, which is a 15% premium to the current 30-day volume-weighted average price (VWAP) [3]. Company Overview - Mesoblast is a global leader in developing allogeneic cellular medicines for severe inflammatory diseases, utilizing proprietary mesenchymal lineage cell therapy technology [4][6]. - The company has established commercial partnerships in Japan, Europe, and China, and is committed to developing additional cell therapies for various indications [6]. Intellectual Property - Mesoblast holds a strong global intellectual property portfolio with over 1,000 granted patents or applications, providing commercial protection extending to at least 2044 in major markets [7]. Manufacturing Capabilities - The company employs proprietary manufacturing processes to produce industrial-scale, cryopreserved, off-the-shelf cellular medicines, ensuring availability to patients worldwide [8]. Market Position - Mesoblast is listed on both the Australian Securities Exchange (ASX: MSB) and Nasdaq (NASDAQ: MESO), indicating its significant presence in the global market [9].