Company Interview / Mesoblast surges on demand for Ryoncil

Key Points

Mesoblast (ASX:MSB) reports 60% quarterly revenue growth, reaching $52.4 millionRyoncil shows significant improvement in survival rates for children with GVHDStrong balance sheet with $140 million in cash and no plans for new financingOngoing global partnerships and new therapies in late-stage trials

Mesoblast (ASX:MSB) has reported a standout December quarter, with revenue surging 60% to $52.4 million. Mesoblast chief executive Dr. Silviu Itescu attributes this strong growth to increasing physician uptake and support from both Medicaid and private insurers for its cell therapy, Ryoncil, used in treating steroid refractory acute graft versus host disease (GVHD) in children who do not respond to standard steroid treatments. He notes the importance of the therapy’s approval by the FDA, highlighting its significant impact. Prior to approval, GVHD had a mortality rate of 70-90% among children, but phase three trials have shown this can be reduced to 25-30%, with many patients living healthy lives five years after successful treatment.

Discussing Mesoblast’s financial position, Itescu explains that the company ended the last quarter with $140 million in cash and a low burn rate, further strengthened by a $125 million five-year interest-only facility from a major shareholder. The senior debt has been repaid, and the company has no immediate plans for new financing.

Mesoblast is also eyeing global expansion, actively pursuing strategic partnerships in Japan, Europe, and China. Its pipeline includes the next-generation therapy, Remestemcel-L, targeting conditions such as heart failure and inflammatory back pain. Broker Bell Potter has issued a speculative buy on the stock with a $4 price target