Mesoblast (ASX:MSB; Nasdaq:MESO) has reported significant milestones in its Q1 FY2025 results, including an anticipated FDA decision on its lead product, Ryoncil (remestemcel-L), for treating steroid-refractory acute graft versus host disease (SR-aGvHD) in children. Filed in July, the company expects an FDA verdict by 7 January 2025. Ryoncil would be the first FDA-approved treatment specifically targeting children under 12 with this condition.
SR-aGvHD is a serious condition that can occur after a patient receives a stem cell or bone marrow transplant from a donor. It happens when the donor's immune cells attack the patient’s tissues, mistaking them as foreign. This reaction often affects organs like the skin, liver, and digestive system, causing symptoms such as skin rashes, jaundice, and gastrointestinal issues.
CEO Silviu Itescu stated that Mesoblast has already secured manufacturing and distribution channels for Ryoncil, preparing for rapid deployment post-approval. A Pre-License Inspection by the FDA was completed in May, with no significant regulatory issues noted. In parallel, Mesoblast arranged a convertible note financing with its largest shareholder, enabling access to US$50m following Ryoncil’s FDA approval to support its commercial launch.
The quarter also marked progress in other programs. Revascor (rexlemestrocel-L), designed for paediatric congenital heart disease, achieved Rare Pediatric Disease and Orphan-Drug Designation, potentially paving the way for additional FDA incentives. Another variant of Revascor is progressing through Phase 3 trials for treating chronic low back pain, with the potential to aid patients with degenerative disc disease and reduce opioid dependence.
Financially, Mesoblast has taken strategic steps to manage expenses. Q1 saw net operating cash outflows of US$10.5m, a 26% reduction compared to the previous year, underscoring the company’s focus on cost control. At quarter-end, Mesoblast reported a cash balance of US$51.1m, bolstered by US$60m in financing facilities available upon Ryoncil’s approval. Mesoblast’s leadership team has also deferred portions of their compensation in exchange for equity-based incentives as part of its fiscal tightening measures.
Shares are trading 1.49% lower at $1.32.
