Mesoblast (US:MESO)2020-08-27 09:27Financial Data and Key Metrics Changes - Total revenue grew nearly 100% to $32.2 million from $16.7 million for the fiscal year ended June 30, 2020 [29][30] - Milestone revenue from strategic partnerships increased by 127% to $25 million from $11 million [30] - Commercialization revenue from JCR Pharmaceuticals rose by 32% to $6.6 million from $5 million [31] - Loss after tax reduced by 13%, driven by increased revenue and reduced clinical trial spending [32] Business Line Data and Key Metrics Changes - RYONCIL, the lead product candidate, is under FDA review for pediatric steroid-refractory acute GVHD, with a PDUFA date set for September 30, 2020 [8][21] - Ongoing Phase 3 trials for remestemcel in acute respiratory distress syndrome from COVID-19, heart failure, and chronic low back pain [9][12][73] - Revenue from JCR Pharmaceuticals for TEMCELL, a product for acute GVHD, is expected to be impacted by production capacity issues [34][36] Market Data and Key Metrics Changes - The addressable U.S. market for acute GVHD in children and adults is approximately eight times larger than in Japan [36] - Pediatric transplants account for about 25% of all bone marrow transplants in the U.S., indicating a significant market opportunity [92] Company Strategy and Development Direction - The company plans to launch RYONCIL in Q4 2020 if approved, with a focus on both pediatric and adult markets for GVHD [21][52] - A lifecycle strategy for remestemcel includes plans for adult steroid-refractory GVHD and COVID-19 ARDS [55][60] - The company is enhancing manufacturing capabilities to meet anticipated demand and is exploring strategic partnerships for commercialization [68] Management's Comments on Operating Environment and Future Outlook - Management highlighted the transformational potential of the upcoming months for the company, emphasizing the importance of RYONCIL's approval [5] - The company is actively engaging with payers regarding pricing and reimbursement strategies for RYONCIL [90] - Management expressed confidence in the demand for RYONCIL based on the experience with TEMCELL in Japan [91] Other Important Information - Cash on hand as of June 30, 2020, was $129.3 million, with an additional $67.5 million potentially available through strategic partnerships [38][39] - The company has a robust patent portfolio with over 1,100 patents and applications, providing strong global protection [18] Q&A Session Summary Question: How should the company model fiscal year 2021? - Management indicated that sales progression for RYONCIL will depend on payer agreements and pricing discussions, with insights drawn from the TEMCELL experience in Japan [90][91] Question: What is the expected year-over-year increase for R&D and SG&A? - Management noted that some costs currently categorized under R&D will shift to SG&A as sales revenue begins [97][99] Question: What was the average age of treated patients in the RYONCIL trial? - The mean age of treated patients was between five and seven, with the label expected to extend up to 18 years [105][106] Question: What is the expected impact of JCR's production and backlog on fiscal 2021 revenues? - Management referenced JCR's guidance indicating a potential drop in TEMCELL sales due to COVID-19, affecting projected royalties [108] Question: Will Grunenthal's Phase 3 trial depend on the company's Phase 3 readout? - Management clarified that the second trial's design will be informed by the totality of data from the current trial, indicating ongoing discussions with regulators [111]