MSB Trading 2020 - a new dawn, page-2594

Commentary on Livewire today:

Mesoblast (ASX:MSB)

Vishal Teckchandani: Okay. Speaking of stocks that can move a really long way, number three, Mesoblast. Buy, hold, sell?

James Gerrish (Hold): Yeah, it's a hold with low conviction. Obviously, the Oncology Committee that gave it the tick of approval is a good precursor to FDA approval moving forward. I'm not smart enough to know enough about this business to have a high conviction on it. It could do anything. So, I've got a low conviction. Hold on it, Vish.

Vishal Teckchandani: Henry, what do you reckon about Mesoblast? Those clinical trials are really binary in nature. Its fate is really tied to a couple of blockbusters.

Henry Jennings (Hold): Hold tight for a fast ride as they say at the fun fair. It has been a massively volatile stock. That news that they weren't going to get approval from that committee, and then they did get approval, I mean, that was just head-spinning in some respects.

James Gerrish: And they got it nine to one.

Henry Jennings: Nine to one. Yeah. I mean, where was the issue that two days beforehand? So, it was one of my most high convicted stocks when they were a $1.25-$1.50. I had a sort of, $3.20 price target, and it got there, I'm out. Where it goes from here is anybody's guess I think. It is a bit of a binary outcome.

Henry Jennings: The problem that Mesoblast have, and have had throughout their history, is they burn through cash. They're burning through US$20 million U.S. dollars a quarter, and the revenue side is still yet to kick in. And that hurts. If you get delays and you get issues, that does hurt, and in the past, they've had to go to some somewhat less reputable funding sources, should we say? And that's hurt them because it's put a cap on their share price. For me, it's a hold, but you've got to have a strong stomach for this one, and it could be a binary outcome. If they've knocked it back for some reason, you could be back down to three bucks. If they put the tick of approval, we could see $6.50-$7. So it is toss-the-coin stuff.