UPDATE: The share price of Mesoblast Ltd (ASX: MSB) has soared by a staggering 38% today, with shares trading at $2.47 in early afternoon trading. This surge follows the company’s recent quarterly update that has captured the attention of investors across the S&P/ASX 200 Index.
This dramatic uptick in Mesoblast’s share price is driven by the announcement of $13.2 million in gross revenue generated from the sales of Ryoncil (remestemcel-L-rknd), the only FDA-approved mesenchymal stromal cell product for treating steroid-refractory acute graft-versus-host disease in children. Ryoncil became commercially available on March 28, 2023, and the early results indicate a positive reception in the market.
The timing of this announcement is critical as it comes at a moment when investor confidence appears to be realigning with the company’s potential. The $3 billion firm also reported a $1.6 million quarterly revenue from royalties on its TEMCELL product sold in Japan, further enhancing its financial outlook.
According to the company, its net operating cash expenditure for the last three months was $16.6 million, leaving Mesoblast with a healthy cash reserve of $162 million as of June 30. This financial cushion allows for continued investment in growth and innovation.
CEO Silviu Itescu commented on the significant progress made with Ryoncil, stating, “We are pleased with the commercial launch activities of Ryoncil in the first quarter post-launch and look forward to updating on the current quarter’s progress now that mandatory state CMS coverage has become effective as of July 1.” This coverage is expected to facilitate wider access to Ryoncil, which is vital for pediatric patients requiring transplant services.
During the June quarter, Mesoblast faced challenges, including a 15% drop in its share price as it worked to onboard over 25 transplant centers since Ryoncil’s launch. However, the company is on track to complete the onboarding of all 45 priority transplant centers this quarter, which account for approximately 80% of all US pediatric transplants.
The latest revenue announcement has not only rejuvenated investor interest but also highlighted the potential market expansion for Ryoncil, with coverage extending to over 250 million US residents insured by commercial and government payers. This includes mandatory fee-for-service Medicaid coverage that became effective on July 1, 2023, across all US states.
Investors are keenly watching Mesoblast as it navigates through this pivotal growth phase. The current momentum suggests that the market is optimistic about the company’s ability to capitalize on its innovative therapies and broaden its impact in the biotechnology sector.
As Mesoblast continues to execute its strategy, industry watchers will be closely monitoring upcoming developments, particularly around the onboarding of transplant centers and the market response to Ryoncil’s expanded coverage. The implications of today’s surge in share price could set the tone for the company’s trajectory in the coming months.
Stay tuned for further updates as Mesoblast progresses through this exciting period of growth.
