Mesoblast (US:MESO)2022-11-23 13:50Financial 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]