COVID-19 ARDS and ARDS Share Price Scenarios, page-234

Thanks for picking that up. I was confused by the structure of the Edison assumptions and didn't double-check.

These are the correct assumptions.

Congestive Heart Failure

• US only
• Market penetration as per Edison estimates ( total addressable market 7,260 ). They used 5% 1% market penetration against a patient population 726,000
• Price USD $50,000

DYOR. Not advice.
Analysis is highly speculative. No specific advice or buy or sell recommendation is intended.​

Combined Estimate of Potential Value for Non-COVID ARDS, CHF, CLBP & aGVH

Scenarios ranging from 20% share of revenue to 80% share of revenue. Consensus seems to be that partnering approaches are more probable than a direct to market approach.

The company recently raised AUD $138M (USD $90M) to support scale up of manufacturing plus has access to a loan facility ( USD $80M currently drawn against a USD $115M facility ).

Crohn’s disease excluded as it is difficult to determine addressable market.


Potential Value

Intent of estimates is to provide perspective of potential value.

Risked @ AUD$25 to $83 $21 to $64 (50% risk weight used for all parts)
Unrisked @ AUD$50 to $165 $42 to $128

Note - No allowance for additional dilution. Estimates assume success of treatment for COVID ARDS leads to revenues sufficient to allow Mesoblast to avoid further-diluting shareholders in commercialising for aGVHD, CLBP and CHF pathways.

Estimates imply to me that on a strong outcome from the COVID ARDS trial the share price fair value should sit at AUD $20+ until details of partnering strategy emerge for Non-COVID ARDS. After COVID assumption is that Mesoblast would then move onto treating Non-COVID ARDS through label extension, based on data collected from the COVID ARDS trial.

A 20% revenue share from Non-COVID ARDS may result in NPAT of ~ AUD $550M . At industry average P/E of 22.48 this would equate to a share price of $20. 80% revenue share would be worth AUD $61 due to lower gross-margin.