Mesoblast Reports Financial Results and Operational Highlights for the Period Ended March 31, 2019
May 30 2019 - 7:09PM
Mesoblast Limited (ASX:MSB; Nasdaq:MESO) today reported its
financial results and operational highlights for the nine months
ended March 31, 2019. Financial results for the period are in line
with expectations including the Company’s cash position at March
31, 2019 of US$70.4 million (A$99.3 million).
Mesoblast Chief Executive Dr Silviu Itescu stated: “We achieved
a significant corporate milestone by initiating our first BLA
submission to the FDA. We will focus our efforts on launch
activities in preparation for our first product roll-out in the
United States, and on our supply chain to meet the projected market
demand for this and our follow-on products.”
Recent Corporate Highlights
- The United States Food and Drug Administration (FDA) has agreed
to a rolling Biologics License Application (BLA) review of
remestemcel-L for the treatment of steroid-refractory acute Graft
Versus Host Disease (aGVHD) in children.
- Mesoblast has initiated the rolling submission of the BLA to
the FDA, with filing of the first module. The rolling process will
provide opportunity for ongoing communication, and during this
process the Company expects it will be able to adequately address
any substantial matters raised by the FDA.
- Mesoblast and the International Center for Health Outcomes and
Innovation Research at the Icahn School of Medicine at Mount Sinai
entered into a Memorandum of Understanding to conduct a
confirmatory clinical trial using Revascor for reduction of
gastrointestinal (GI) bleeding in end-stage heart failure patients
implanted with a left ventricular assist device (LVAD).
- Mesoblast’s Phase 3 trial in advanced heart failure has
completed patient enrollment, with 566 patients randomized to
receive Revascor or placebo. The study, conducted across 55 centers
in North America, will complete when sufficient primary endpoint
events have accrued.
- Mesoblast’s Phase 3 trial in chronic low back pain has
completed enrollment with 404 patients randomized to receive
MPC-06-ID or placebo. All assessable patients have now completed at
least 12 months of safety and efficacy follow-up.
- Mesoblast extended its license with JCR Pharmaceuticals Co.,
Ltd. (JCR) in Japan for use of TEMCELL®1 HS Inj. in patients with
Epidermolysis Bullosa. JCR has now filed to extend marketing
approval for this indication.
- The Board appointed Joseph R. Swedish as Chairman in April
2019. Mr Swedish brings deep healthcare expertise and a track
record in healthcare resource allocation and reimbursement metrics,
as the Company enters commercial stage.
Key Financial Highlights for the Nine
Months of FY2019:
- Cash reserves of US$70.4 million at March 31, 2019.
Additional non-dilutive capital of US$35.0 million may be available
under existing arrangements with Hercules Capital, Inc. (Hercules)
and NovaQuest Capital Management, L.L.C. (NovaQuest), subject to
certain milestones.
- 28% increase in royalty income on sales of TEMCELL for aGVHD in
Japan.
- Stable revenue of US$14.7 million, compared with US$15.6
million in the nine months of FY2018.
- Increased investment in commercial manufacturing of US$9.5
million to support potential launch for aGVHD product.
- 29% reduction in net operating cash outflows in the nine months
of FY2019 to US$38.7 million.
Upcoming Milestones
Key milestones anticipated for CY2019 include:
- Completion of BLA filing for remestemcel-L in the treatment of
steroid refractory aGVHD in children.
- Phase 3 trial in advanced heart failure continues accrual of
primary endpoints through to completion.
- Meet with FDA to discuss pathway for approval of Revascor for
the reduction of GI bleeding in end-stage heart failure patients
implanted with a LVAD.
- Mesoblast’s partner Tasly plans to meet with the National
Medical Products Administration of China to discuss the regulatory
approval pathway for Revascor in China.
- Patient follow up continues through 24-month assessment of
safety and efficacy in the Company’s Phase 3 trial of MPC-06-ID for
chronic lower back pain.
Detailed Financial Results for the Nine
Months Ended March 31, 2019 (nine months of FY2019):
- Revenues were US$14.7 million for the nine
months of FY2019, compared with US$15.6 million for the nine months
of FY2018. Revenues comprised: ° US$10.0 million
milestone revenue recognized in the nine months of FY2019 in
relation to establishing a partnership with Tasly in China,
compared with US$11.8 million milestone revenue recognized in the
nine months of FY2018 in relation to the patent license agreement
with Takeda Pharmaceutical Company Limited.
° US$4.3 million royalties and milestones revenue
recognized in the nine months of FY2019 from sales of TEMCELL by
our licensee in Japan, JCR, compared with US$3.6 million in the
nine months of FY2018, an increase of US$0.7 million. Royalty
income from TEMCELL increased by 28% for the nine months of
FY2019.
- Research and Development expenses were US$48.4
million for the nine months of FY2019, stable when compared to the
nine months of FY2018. For the third quarter, Research and
Development expenses decreased by US$2.4m versus the comparative
quarter in FY2018.
- Manufacturing expenses were US$12.9 million
for the nine months of FY2019, compared with US$3.4 million for the
nine months of FY2018. This reflects commercial manufacturing
investment to support potential launch for aGVHD product.
- Management and Administration expenses were
US$16.0 million for the nine months of FY2019, a decrease of US$0.7
million on the comparative period of FY2018.
- Finance Costs were US$7.9 million for the nine
months of FY2019, compared with US$0.4 million for the nine months
of FY2018, primarily due to expenses in relation to loan and
security agreements entered into with Hercules in March 2018 and
NovaQuest in June 2018.
Additional components of loss after income tax also include
movements in other items which did not impact current cash
reserves, such as income tax benefits, fair value remeasurement of
contingent consideration, remeasurement of borrowing arrangements
and foreign exchange movements within other operating income and
expenses.
In the nine months of FY2019, the net loss attributable to
ordinary shareholders was 14.02 cents per share for the nine months
of FY2019, compared with a loss per share of 3.12 cents for the
nine months of FY2018. There was an after tax loss of US$69.1
million compared to $14.5 million for the nine months of FY2018.
The increase in the loss is primarily due to commercial
manufacturing investment of US$9.5 million to support potential
launch for aGVHD product, and an increase of US$7.5 million in
finance costs. In the comparative period of FY2018, the Company
recognized a one-off non-cash income tax benefit of US$23.0 million
due to a revaluation of tax liabilities given changes in tax rates
and a non-cash US$7.9 million gain on remeasurement of contingent
consideration for reduction of future payments to third
parties.
1TEMCELL® HS Inj. is a registered trademark of JCR
Pharmaceuticals Co. Ltd.
Conference Call DetailsThere will be a webcast
today on the financial results beginning at 6.30pm on Thursday May
30, 2019 EDT; 8:30am on Friday May 31, 2019 AEST.
The live webcast can be accessed via
https://webcasting.boardroom.media/broadcast/5ce635514b5ab5633996c030
To access the call only, dial 1 855 881 1339 (U.S.), 1 800 558
698 (toll-free Australia) or +61 2 9007 3187 (outside of the U.S.
and Australia). The conference identification code is 10000574.
The archived webcast will be available on the Investor page of
the Company’s website: www.mesoblast.com
About Mesoblast Mesoblast Limited
(ASX: MSB; Nasdaq: MESO) is a world leader in developing allogeneic
(off-the-shelf) cellular medicines. The Company has leveraged its
proprietary technology platform to establish a broad portfolio of
late-stage product candidates with three product candidates in
Phase 3 trials – acute graft versus host disease, chronic heart
failure and chronic low back pain due to degenerative disc disease.
Through a proprietary process, Mesoblast selects rare mesenchymal
lineage precursor and stem cells from the bone marrow of healthy
adults and creates master cell banks, which can be industrially
expanded to produce thousands of doses from each donor that meet
stringent release criteria, have lot to lot consistency, and can be
used off-the-shelf without the need for tissue matching. Mesoblast
has facilities in Melbourne, New York, Singapore and Texas and is
listed on the Australian Securities Exchange (MSB) and on the
Nasdaq (MESO). www.mesoblast.com
Forward-Looking StatementsThis announcement
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, 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.
For further information, please contact:
Julie Meldrum |
Schond Greenway |
Corporate Communications |
Investor Relations |
Mesoblast |
Mesoblast |
T: +61 3 9639 6036 |
T: +1 212 880 2060 |
E: julie.meldrum@mesoblast.com |
E:
schond.greenway@mesoblast.com |
Consolidated Income Statement
|
Three Months EndedMarch 31, |
|
Nine Months EndedMarch 31, |
|
(in U.S. dollars, in
thousands, except per share amount) |
2019 |
|
|
2018 |
|
2019 |
|
|
2018 |
|
Revenue |
|
1,249 |
|
|
|
1,070 |
|
|
14,755 |
|
|
|
15,641 |
|
Research & development |
|
(14,407 |
) |
|
|
(16,798 |
) |
|
(48,380 |
) |
|
|
(48,388 |
) |
Manufacturing
commercialization |
|
(3,193 |
) |
|
|
(1,709 |
) |
|
(12,910 |
) |
|
|
(3,387 |
) |
Management and
administration |
|
(5,256 |
) |
|
|
(6,033 |
) |
|
(15,998 |
) |
|
|
(16,688 |
) |
Fair value remeasurement of
contingent consideration |
|
(2,718 |
) |
|
|
(822 |
) |
|
(3,352 |
) |
|
|
7,880 |
|
Other operating income and
expenses |
|
(82 |
) |
|
|
152 |
|
|
(1,060 |
) |
|
|
1,243 |
|
Finance costs |
|
(2,768 |
) |
|
|
(423 |
) |
|
(7,906 |
) |
|
|
(423 |
) |
Loss before income
tax |
|
(27,175 |
) |
|
|
(24,563 |
) |
|
(74,851 |
) |
|
|
(44,122 |
) |
Income tax benefit |
|
2,205 |
|
|
|
3,426 |
|
|
5,778 |
|
|
|
29,666 |
|
Loss attributable to the
owners of Mesoblast Limited |
|
(24,970 |
) |
|
|
(21,137 |
) |
|
(69,073 |
) |
|
|
(14,456 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses per share from
continuing operations attributable to the
ordinary equity holders of the Group: |
Cents |
|
|
Cents |
|
Cents |
|
|
Cents |
|
Basic - losses per share |
|
(5.00 |
) |
|
|
(4.47 |
) |
|
(14.02 |
) |
|
|
(3.12 |
) |
Diluted - losses per share |
|
(5.00 |
) |
|
|
(4.47 |
) |
|
(14.02 |
) |
|
|
(3.12 |
) |
Consolidated Statement of Comprehensive Income
|
Three Months EndedMarch 31, |
|
Nine Months EndedMarch 31, |
|
(in U.S. dollars, in
thousands) |
2019 |
|
|
2018 |
|
2019 |
|
|
2018 |
|
Loss for the period |
|
(24,970 |
) |
|
|
(21,137 |
) |
|
(69,073 |
) |
|
|
(14,456 |
) |
Other comprehensive
(loss)/income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be reclassified to
profit and loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in the fair value of
financial assets |
|
85 |
|
|
|
74 |
|
|
280 |
|
|
|
141 |
|
Exchange differences on
translation of foreign operations |
|
79 |
|
|
|
(69 |
) |
|
(104 |
) |
|
|
(569 |
) |
Other comprehensive (loss)/income
for the period, net of tax |
|
164 |
|
|
|
5 |
|
|
176 |
|
|
|
(428 |
) |
Total comprehensive
losses attributable to the owners of
Mesoblast Limited |
|
(24,806 |
) |
|
|
(21,132 |
) |
|
(68,897 |
) |
|
|
(14,884 |
) |
Consolidated Statement of Balance Sheet
(in U.S. dollars, in
thousands) |
As ofMarch
31,2019 |
|
|
As ofJune
30,2018 |
|
Assets |
|
|
|
|
|
|
|
Current
Assets |
|
|
|
|
|
|
|
Cash & cash equivalents |
|
70,385 |
|
|
|
37,763 |
|
Trade & other
receivables |
|
3,508 |
|
|
|
50,366 |
|
Prepayments |
|
11,634 |
|
|
|
12,942 |
|
Total Current
Assets |
|
85,527 |
|
|
|
101,071 |
|
|
|
|
|
|
|
|
|
Non-Current
Assets |
|
|
|
|
|
|
|
Property, plant and
equipment |
|
825 |
|
|
|
1,084 |
|
Financial assets at fair value
through other comprehensive income |
|
2,601 |
|
|
|
2,321 |
|
Other non-current assets |
|
3,331 |
|
|
|
3,361 |
|
Intangible assets |
|
583,421 |
|
|
|
584,606 |
|
Total Non-Current
Assets |
|
590,178 |
|
|
|
591,372 |
|
Total
Assets |
|
675,705 |
|
|
|
692,443 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
|
Trade and other payables |
|
18,551 |
|
|
|
18,921 |
|
Provisions |
|
6,592 |
|
|
|
5,082 |
|
Borrowings |
|
9,359 |
|
|
|
— |
|
Deferred consideration |
|
10,000 |
|
|
|
— |
|
Total Current
Liabilities |
|
44,502 |
|
|
|
24,003 |
|
|
|
|
|
|
|
|
|
Non-Current
Liabilities |
|
|
|
|
|
|
|
Deferred tax liability |
|
14,301 |
|
|
|
20,079 |
|
Provisions |
|
45,742 |
|
|
|
42,956 |
|
Borrowings |
|
70,218 |
|
|
|
59,397 |
|
Total Non-Current
Liabilities |
|
130,261 |
|
|
|
122,432 |
|
Total
Liabilities |
|
174,763 |
|
|
|
146,435 |
|
Net Assets |
|
500,942 |
|
|
|
546,008 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Issued Capital |
|
910,405 |
|
|
|
889,481 |
|
Reserves |
|
39,802 |
|
|
|
36,719 |
|
(Accumulated losses)/retained
earnings |
|
(449,265 |
) |
|
|
(380,192 |
) |
Total
Equity |
|
500,942 |
|
|
|
546,008 |
|
Consolidated Statement of Cash Flows
|
Nine months endedMarch 31, |
|
(in U.S. dollars, in
thousands) |
2019 |
|
|
2018 |
|
Cash
flows from operating activities |
|
|
|
|
|
|
|
Commercialization revenue received |
|
3,321 |
|
|
|
2,529 |
|
Milestone payment received |
|
26,409 |
|
|
|
6,125 |
|
Research and development tax incentive received |
|
1,654 |
|
|
|
— |
|
Payments to suppliers and employees (inclusive of
goods and services tax) |
|
(67,672 |
) |
|
|
(63,719 |
) |
Interest received |
|
493 |
|
|
|
266 |
|
Interest paid |
|
(2,906 |
) |
|
|
— |
|
Income taxes (paid) |
|
(3 |
) |
|
|
(25 |
) |
Net cash (outflows) in operating
activities |
|
(38,704 |
) |
|
|
(54,824 |
) |
|
|
|
|
|
|
|
|
Cash flows from investing
activities |
|
|
|
|
|
|
|
Investment in fixed assets |
|
(202 |
) |
|
|
(174 |
) |
Payments for contingent
consideration |
|
— |
|
|
|
(543 |
) |
Net cash (outflows) in investing
activities |
|
(202 |
) |
|
|
(717 |
) |
|
|
|
|
|
|
|
|
Cash flows from financing
activities |
|
|
|
|
|
|
|
Proceeds from borrowings |
|
43,572 |
|
|
|
31,704 |
|
Payments of transaction costs from borrowings |
|
(1,582 |
) |
|
|
(40 |
) |
Proceeds from issue of shares |
|
30,258 |
|
|
|
40,566 |
|
Payments for share issue costs |
|
(607 |
) |
|
|
(2,604 |
) |
Net cash inflows by financing
activities |
|
71,641 |
|
|
|
69,626 |
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
32,735 |
|
|
|
14,085 |
|
Cash and cash equivalents at beginning of period |
|
37,763 |
|
|
|
45,761 |
|
FX (losses) on the translation of foreign bank
accounts |
|
(113 |
) |
|
|
(307 |
) |
Cash and cash equivalents at end of
period |
|
70,385 |
|
|
|
59,539 |
|
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