Appendix 4C Quarterly Activity Report

Mesoblast Limited (Nasdaq:MESO; ASX:MSB), global leader in allogeneic cellular medicines for inflammatory diseases, today provided an activity report for the third quarter ended March 31, 2022.

Financial highlights

Net cash usage for operating activities in the quarter was reduced by 40%, or US$10.3 million, to US$15.5 million compared with US$25.8 million in the comparative quarter last year
Net cash usage for operating activities, excluding inventory for the planned remestemcel-L product launch, was reduced by 50% to US$11.2 million from US$22.2 million in the comparative quarter
Cash on hand at the end of the quarter was US$76.8 million, with up to an additional US$40 million available to be drawn down from existing financing facilities subject to certain milestones
Revenues in the quarter were US$2.1 million, including US$1.9 million from TEMCELL® HS Inj.1 royalties on sales for SR-aGvHD in Japan, an increase of 5% on the comparative quarter last year

New appointments to the Board and Management:

Philip R. Krause, M.D. joined the Board of Directors in March. Dr. Krause was for the past decade Deputy Director, Office of Vaccines Research and Review (OVRR) at the United States Food and Drug Administration’s (FDA) Center for Biologics Evaluation and Research (CBER). Dr. Krause is currently Chair of the World Health Organization COVID Vaccines Research Expert Group, and most recently he shared responsibility for regulatory authorizations of COVID-19 vaccines in the US. Dr. Krause’s deep insights and knowledge of regulatory processes will be invaluable to Mesoblast as it prepares its resubmission of the Biologics License Application (BLA) to the FDA for remestemcel-L in the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD)
Eric Rose, M.D. was appointed as the Company’s Chief Medical Officer (CMO), having been a non-executive director of Mesoblast since 2013. Previously Chairman of Surgery at Columbia University’s School of Medicine, Dr. Rose brings to his new role an extensive record of excellence in clinical development and successful interactions at the highest levels with key regulatory, industry and government stakeholders including the United States FDA, the National Institutes of Health (NIH), and the Biomedical Advanced Research and Development Authority (BARDA)

Key updates on remestemcel-L:

BLA resubmission to the FDA for the treatment of children with SR-aGVHD

Detailed data requirements and documentation being finalized for resubmission of the Biologics License Application (BLA) to the FDA for remestemcel-L in the treatment of children with SR-aGVHD
Mesoblast has generated substantial new data, as previously discussed, that it believes establish the relevance of the proposed potency assay measuring remestemcel-L’s in vitro anti-inflammatory and immunomodulatory activity to the in vivo clinical effect of the product in the Phase 3 trial in children with SR-aGVHD, including survival and biomarkers of in vivo activity
Mesoblast will provide these new data to FDA and address all chemistry, manufacturing and controls (CMC) outstanding items as required for the planned BLA resubmission. If the resubmission is accepted, CBER will consider the adequacy of the clinical data in the context of the related CMC issues noted above

Inflammatory Bowel Disease

The results of the first cohort of patients from the randomized, controlled study of remestemcel-L by direct endoscopic delivery to areas of inflammation in patients with medically refractory ulcerative colitis or Crohn’s colitis were presented at the 17th Congress of European Crohn’s and Colitis Organisation (ECCO) by the trial’s lead investigator Dr. Amy L. Lightner, Associate Professor of Surgery in the Department of Colon and Rectal Surgery at Cleveland Clinic
Results from an interim analysis of the first twelve patient cohort were published in the Journal of Crohn's and Colitis.2,3 A single local delivery of remestemcel-L by colonoscopy resulted in rapid mucosal healing, improved clinical and endoscopic scores as early as two weeks following remestemcel-L, and a high incidence of disease remission by six weeks. Dr. Lightner is scheduled to present results from additional patients at the world’s premier meeting for physicians, researchers and industry professionals in the fields of gastroenterology, hepatology, endoscopy and gastrointestinal surgery, Digestive Disease Week® (DDW) next month

COVID-19 acute respiratory distress syndrome (ARDS)

Clinical outcomes from the pilot study of remestemcel-L in 11 ventilator-dependent COVID-19 patients with ARDS treated under emergency investigational new drug (eIND) applications at Mt Sinai Hospital in New York, was published in the peer-reviewed journal Cytotherapy this month. The manuscript4 titled ‘Mesenchymal Stromal Cell Therapy for Acute Respiratory Distress Syndrome due to COVID-19’ provides the pilot experience with remestemcel-L in 11 ventilator-dependent patients (10/11 were < 65 years) in the intensive care unit (ICU) with moderate/severe ARDS, 82% of whom were successfully discharged from the ICU. The authors noted that there are currently no approved therapies for COVID-19 ARDS and concluded that the case series demonstrated remestemcel-L infusions to treat moderate to severe COVID-19 ARDS were safe, well-tolerated, and resulted in improved clinical outcomes including liberation from mechanical ventilation and discharge from the ICU and/or hospital. These data formed the dosing strategy for a subsequent randomized controlled trial in 222 patients with moderate-severe COVID ARDS. Mesoblast continues to be in discussions with its collaborators to begin a trial to confirm the observed outcomes in patients < 65, with a potential pathway to seek Emergency Use Authorization

Key updates on rexlemestrocel-L:

Chronic Heart Failure

Dr. Eugene Braunwald who has often been called the father of modern cardiology and the most frequently cited author in cardiology,5 this month published an article in European Heart Journal titled Cardiac cell therapy: a call for action.6 The paper highlighted next generation mesenchymal stromal (bone marrow-derived) cells as attractive candidates for cardiac cell therapy (CCT). He specifically highlighted the clinical outcomes observed in Mesoblast’s DREAM-HF Phase 3 trial and pointed out the company’s commercial leadership globally in the field of CCT for heart failure
- Mesoblast received feedback last quarter from FDA confirming that reduction in major adverse cardiovascular events (MACE) of cardiovascular mortality or irreversible morbidity (non-fatal heart attack or stroke) is an acceptable clinically meaningful endpoint for determining the treatment benefit of rexlemestrocel-L for patients with chronic heart failure and low ejection fraction (HFrEF). Subsequently provided FDA with top-line results of new analyses in pre-specified high-risk groups in the DREAM-HF Phase 3 trial of rexlemestrocel-L in HFrEF which showed that the greatest treatment benefit is in patients with diabetes and/or myocardial ischemia (72% of total treated population), a target population at very high risk for mortality and irreversible morbidity due to micro- and macro-vascular disease despite receiving optimal standard of care therapies 7
- Mesoblast expects to receive guidance from FDA on a potential pathway to approval following detailed review of the outcomes identified in high-risk HFrEF patients with diabetes and/or myocardial ischemia

Chronic Low Back Pain

Presented 36-month follow-up results from the 404-patient Phase 3 trial of rexlemestrocel-L (MPC-06-ID) in patients with chronic low back pain (CLBP) associated with degenerative disc disease (DDD) which showed durable reduction in back pain lasting at least three years from a single intra-discal injection of rexlemestrocel-L+hyaluronic acid (HA) carrier
Mesoblast received feedback last quarter from FDA on the Phase 3 program for CLBP and plans to conduct an additional US Phase 3 trial which may support submissions for potential approval in both the US and EU. Following review of the completed Phase 3 trial data, FDA agreed with Mesoblast’s proposal for pain reduction at 12 months as the primary endpoint of the next trial, with functional improvement and reduction in opioid use as secondary endpoints

Other:

Salary payments to full-time Executive Directors were US$289,088 and fees to Non-Executive Directors were US$207,296, detailed in Item 6 of the Appendix 4C cash flow report for the quarter.8

A copy of the Appendix 4C – Quarterly Cash Flow Report for the third quarter FY2022 is available on the investor page of the company’s website www.mesoblast.com.

About Mesoblast Mesoblast 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

TEMCELL® HS Inj. is a registered trademark of JCR Pharmaceuticals Co. Ltd.
Lightner A., et al. A Phase IB/IIA study of remestemcel-L, an allogeneic bone marrow derived mesenchymal stem cell product, for the treatment of medically refractory Crohn’s colitis: A preliminary analysis. Journal of Crohn’s and Colitis, Volume 16, Issue Supplement_1, January 2022, Pages i412–i413, https://doi.org/10.1093/ecco-jcc/jjab232.555
Lightner A., et al. A Phase IB/IIA study of remestemcel-L, an allogeneic bone marrow derived mesenchymal stem cell product, for the treatment of medically refractory ulcerative colitis: An interim analysis. Journal of Crohn’s and Colitis, Volume 16, Issue Supplement_1, January 2022, Pages i398–i399, https://doi.org/10.1093/ecco-jcc/jjab232.534
Whittaker Brown S., et al. Mesenchymal Stromal Cell Therapy for Acute Respiratory Distress Syndrome due to COVID-19. Cytotherapy, April 2022, https://doi.org/10.1016/j.jcyt.2022.03.006
Dunlay SM., et al. Circulation. 2019;140:e294–e324
Neill US. Conversations with Giants in Medicine – A conversation with Eugene Braunwald. J Clin Invest. 2013;123(1):1-2. https://doi.org/10.1172/JCI67778
Braunwald E. Cardiac cell therapy: a call for action. European Heart Journal (2022) 00, 1–2, https://doi.org/10.1093/eurheartj/ehac188
As required by ASX listing rule 4.7 and reported in Item 6 of the Appendix 4C, reported are the aggregated total payments to related parties being Executive Directors and Non-Executive Directors

Forward-Looking StatementsThis 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 BLA resubmission), 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:

Corporate Communications / Investors	Media
Paul Hughes	Sumit Media
T: +61 3 9639 6036	Grant Titmus
E: investors@mesoblast.com	T: +61 419 388 161
	E: grant@sumitmedia.com.au

	Rubenstein
	Tali Mackay
	E: tmackay@rubenstein.com