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Mesoblast Reports Financial Results and Operational Update for Half-Year Ended December 31, 2023

NEW YORK, Feb. 28, 2024 (GLOBE NEWSWIRE) — Mesoblast Limited (Nasdaq:MESO; ASX:MSB), global leader in allogeneic cellular medicines for inflammatory diseases, today provided an operational update and reported financial results for the period ended December 31, 2023.

Mesoblast Chief Executive Silviu Itescu said: “We were very busy operationally during the last quarter and continued to have positive engagement with the United States Food and Drug Administration (FDA) across our lead programs. We have strengthened our balance sheet while maintaining overall spending constraint in line with our corporate objectives.

For our product Ryoncil® (remestemcel-L) for life-threatening steroid-refractory acute graft-versus-host disease (SR-aGVHD) ahead of our upcoming meeting in March we have provided the FDA with new data from a second potency assay that provides additional product characterization as requested by FDA.

“For our cardiovascular product Revascor®, we had a very productive meeting with the FDA this month which included discussion of a unifying mechanism of action across the continuum of heart failure with inflammation in adults, and potential approval pathways in these patients. The FDA will provide written minutes from the meeting in March.

“We were also very pleased during this quarter to have received both a Rare Pediatric Disease Designation and Orphan Drug Designation from FDA for Revascor® in children with hypoplastic left heart syndrome and plan to discuss the results of the completed randomized controlled trial in the context of a regulatory approval pathway.”

“Finally, our second Phase 3 back pain trial with rexlemestrocel-L, aiming to confirm the durable pain reduction that was seen in the first Phase 3 trial, is underway.”

FINANCIAL RESULTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2023 (FIRST HALF FY2024)

GRAFT VERSUS HOST DISEASE – PEDIATRIC AND ADULT PHASE 3 PROGRAMS

PEDIATRIC CONGENITAL HEART DISEASE – HYPOPLASTIC LEFT HEART SYNDROME (HLHS)

FDA MEETING REGARDING REGULATORY PATH TO APPROVAL FOR REXLEMESTROCEL-L IN ADULTS WITH CHRONIC HEART FAILURE WITH REDUCED EJECTION FRACTION (HFrEF), INCLUDING END-STAGE PATIENTS WITH A LEFT VENTRICULAR ASSIST DEVICE (LVAD)

CHRONIC LOW BACK PAIN (CLBP) ASSOCIATED WITH DEGENERATIVE DISK DISEASE (DDD)

DETAILS OF FINANCIAL RESULTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2023 (FIRST HALF FY2024)

Loss after tax for the first half FY2024 was US$32.5 million, a 21% reduction compared to US$41.4 million for the comparative period in FY2023. The net loss attributable to ordinary shareholders was 3.82 US cents per share for the first half FY2024, compared with 5.64 US cents per share for the comparative period in FY2023.

Conference Call
There will be a webcast today, beginning at 9.00am AEST (Thursday, February 29); 5.00pm EST (Wednesday, February 28). It can be accessed via: https://webcast.openbriefing.com/msb-hyr-2024/

The archived webcast will be available on the Investor page of the Company’s website: www.mesoblast.com

About Mesoblast
Mesoblast (the Company) is a world leader in developing allogeneic (off-the-shelf) cellular medicines for the treatment of severe and life-threatening inflammatory conditions. The Company has leveraged its proprietary mesenchymal lineage cell therapy technology platform to establish a broad portfolio of late-stage product candidates which respond to severe inflammation by releasing anti-inflammatory factors that counter and modulate multiple effector arms of the immune system, resulting in significant reduction of the damaging inflammatory process.

Mesoblast has a strong and extensive global intellectual property portfolio with protection extending through to at least 2041 in all major markets. The Company’s proprietary manufacturing processes yield industrial-scale, cryopreserved, off-the-shelf, cellular medicines. These cell therapies, with defined pharmaceutical release criteria, are planned to be readily available to patients worldwide.

Mesoblast is developing product candidates for distinct indications based on its remestemcel-L and rexlemestrocel-L allogeneic stromal cell technology platforms. Remestemcel-L is being developed for inflammatory diseases in children and adults including steroid refractory acute graft versus host disease, biologic-resistant inflammatory bowel disease, and acute respiratory distress syndrome. Rexlemestrocel-L is in development for advanced chronic heart failure and chronic low back pain. Two products have been commercialized in Japan and Europe by Mesoblast’s licensees, and the Company has established commercial partnerships in Europe and China for certain Phase 3 assets.

Mesoblast has locations in Australia, the United States and Singapore and is listed on the Australian Securities Exchange (MSB) and on the Nasdaq (MESO). For more information, please see www.mesoblast.com, LinkedIn: Mesoblast Limited and Twitter: @Mesoblast

References / Footnotes

  1. Using Reserve Bank of Australia (RBA) published exchange rate from December 31, 2023 of 1A$:0.6840US$.
  2. Jagasia M et al. Ruxolitinib for the treatment of steroid-refractory acute GVHD (REACH1): a multicenter, open-label phase 2 trial. Blood. 2020 May 14; 135(20): 1739–1749
  3. Abedin S, et al. Ruxolitinib resistance or intolerance in steroid-refractory acute graft versus-host disease — a real-world outcomes analysis. British Journal of Haematology, 2021;195:429–43.
  4. Wittenberg RE, Gauvreau K, Leighton J, Moleon-Shea M, Borow KM, Marx GR, Emani SM, Prospective randomized controlled trial of the safety and feasibility of a novel mesenchymal precursor cell therapy in hypoplastic left heart syndrome, JTCVS Open Volume 16, Dec 2023, doi: https://doi.org/10.1016/j.xjon.2023.09.031
  5. TEMCELL® HS Inj. is a registered trademark of JCR Pharmaceuticals Co. Ltd.
  6. TEMCELL sales by our Licensee are recorded in Japanese Yen before being translated into USD for the purposes of calculating the royalty paid to Mesoblast. Results have been adjusted for the movement of the USD to Japanese Yen exchange rate from 1USD:139.10 Yen for the six months ended December 31, 2022 to 1USD:146.94 Yen for the six months ended December 31, 2023.

Forward-Looking Statements
This press release includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements should not be read as a guarantee of future performance or results, and actual results may differ from the results anticipated in these forward-looking statements, and the differences may be material and adverse. Forward-looking statements include, but are not limited to, statements about: the initiation, timing, progress and results of Mesoblast’s preclinical and clinical studies, and Mesoblast’s research and development programs; Mesoblast’s ability to advance product candidates into, enroll and successfully complete, clinical studies, including multi-national clinical trials; Mesoblast’s ability to advance its manufacturing capabilities; the timing or likelihood of regulatory filings and approvals (including our request to have a Type A meeting with the FDA, the outcome of such a meeting, and any future decision that the FDA may make on the BLA for remestemcel-L for pediatric patients with SR-aGVHD), manufacturing activities and product marketing activities, if any; the commercialization of Mesoblast’s product candidates, if approved; regulatory or public perceptions and market acceptance surrounding the use of stem-cell based therapies; the potential for Mesoblast’s product candidates, if any are approved, to be withdrawn from the market due to patient adverse events or deaths; the potential benefits of strategic collaboration agreements and Mesoblast’s ability to enter into and maintain established strategic collaborations; Mesoblast’s ability to establish and maintain intellectual property on its product candidates and Mesoblast’s ability to successfully defend these in cases of alleged infringement; the scope of protection Mesoblast is able to establish and maintain for intellectual property rights covering its product candidates and technology; estimates of Mesoblast’s expenses, future revenues, capital requirements and its needs for additional financing; Mesoblast’s financial performance; developments relating to Mesoblast’s competitors and industry; and the pricing and reimbursement of Mesoblast’s product candidates, if approved. You should read this press release together with our risk factors, in our most recently filed reports with the SEC or on our website. Uncertainties and risks that may cause Mesoblast’s actual results, performance or achievements to be materially different from those which may be expressed or implied by such statements, and accordingly, you should not place undue reliance on these forward-looking statements. We do not undertake any obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

Release authorized by the Chief Executive.

For more information, please contact:

Consolidated Income Statement

    Six Months Ended
December 31,
(in U.S. dollars, in thousands, except per share amount)   2023   2022
Revenue   3,388     3,422  
Research & development   (12,647 )   (13,430 )
Manufacturing commercialization   (6,746 )   (12,760 )
Management and administration   (11,482 )   (13,281 )
Fair value remeasurement of contingent consideration   (337 )   5,989  
Fair value remeasurement of warrant liability   4,434     (712 )
Other operating income and expenses   1,068     (39 )
Finance costs   (10,319 )   (10,685 )
Loss before income tax   (32,641 )   (41,496 )
Income tax benefit/(expense)   102     126  
Loss attributable to the owners of Mesoblast Limited   (32,539 )   (41,370 )
         
Losses per share from continuing operations attributable to the ordinary equity holders of the Group:   Cents   Cents
Basic – losses per share   (3.82 )   (5.64 )
Diluted – losses per share   (3.82 )   (5.64 )
             

Consolidated Statement of Comprehensive Income

    Six Months Ended
December 31,
(in U.S. dollars, in thousands)   2023   2022
Loss for the period   (32,539 )   (41,370 )
Other comprehensive (loss)/income        
Items that may be reclassified to profit and loss        
Exchange differences on translation of foreign operations   1,164     100  
Items that will not be reclassified to profit and loss        
Financial assets at fair value through other comprehensive income   (931 )   192  
Other comprehensive (loss)/income for the period, net of tax   233     292  
Total comprehensive losses attributable to the owners of Mesoblast Limited   (32,306 )   (41,078 )
             

Consolidated Balance Sheet

(in U.S. dollars, in thousands)   As of
December 31,
2023
  As of
June 30,
2023
Assets        
Current Assets        
Cash & cash equivalents   77,554     71,318  
Trade & other receivables   3,998     6,998  
Prepayments   3,602     3,342  
Total Current Assets   85,154     81,658  
         
Non-Current Assets        
Property, plant and equipment   1,171     1,357  
Right-of-use assets   4,329     5,134  
Financial assets at fair value through other comprehensive income   826     1,757  
Other non-current assets   2,241     2,326  
Intangible assets   576,564     577,183  
Total Non-Current Assets   585,131     587,757  
Total Assets   670,285     669,415  
         
Liabilities        
Current Liabilities        
Trade and other payables   10,760     20,145  
Provisions   8,230     6,399  
Borrowings   8,534     5,952  
Lease liabilities   2,851     4,060  
Warrant liability   992     5,426  
Total Current Liabilities   31,367     41,982  
         
Non-Current Liabilities        
Provisions   17,073     16,612  
Borrowings   107,228     102,811  
Lease liabilities   3,386     3,672  
Deferred consideration   2,500     2,500  
Total Non-Current Liabilities   130,187     125,595  
Total Liabilities   161,554     167,577  
Net Assets   508,731     501,838  
         
Equity        
Issued Capital   1,286,229     1,249,123  
Reserves   75,846     73,520  
(Accumulated losses)   (853,344 )   (820,805 )
Total Equity   508,731     501,838  
             

Consolidated Statement of Cash Flow

    Six Months Ended
December 31,
(in U.S. dollars, in thousands)   2023   2022
Cash flows from operating activities        
Commercialization revenue received   3,971     3,667  
Government grants and tax incentives and credits received   2,565     18  
Payments to suppliers and employees (inclusive of goods and services tax)   (33,994 )   (34,633 )
Interest received   887     207  
Income taxes paid   (1 )    
Net cash (outflows) in operating activities   (26,572 )   (30,741 )
         
Cash flows from investing activities        
Investment in fixed assets   (194 )   (187 )
Receipts from investment in sublease   116      
Payments for intellectual property   (10 )   (50 )
Net cash (outflows) in investing activities   (88 )   (237 )
         
Cash flows from financing activities        
Payment of transaction costs from borrowings   (540 )   (217 )
Interest and other costs of finance paid   (2,845 )   (2,807 )
Proceeds from issue of shares   39,708     45,065  
Payments for share issue costs   (2,578 )   (2,646 )
Payments for lease liabilities   (2,145 )   (1,109 )
Net cash inflows by financing activities   31,600     38,286  
         
Net increase in cash and cash equivalents   4,940     7,308  
Cash and cash equivalents at beginning of period   71,318     60,447  
FX gains/(losses) on the translation of foreign bank accounts   1,296     (136 )
Cash and cash equivalents at end of period   77,554     67,619  


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