Ann: Change in substantial holding, page-85

Hi Reg,

just saw this:

" ... It feels to me that GG may be pushing for the same accountability for the CR that I was asking. ...Even if GG isn't aggressive towards SI, it appears he may be demanding better peformance and accountability..."

I feel I should be really clear here. The fact that I don't want to see the Board of Directors change wholesale doesn't mean there aren't good reasons to review positions on the Board opportunistically. I don't know that Chariman Swedish didn't put his hand up - perhaps he thought MSB'd be through the hard parts in 2020. Heaven knows, I did! I don't know that CEO Itescu didn't approach him & enquire about his interest in remaining active in the face of the sudden spurt of regulatory setbacks, financing challenges, and even litigation developments over 2023 & into 2024. Importantly, it was always a non-exec role, & still is. But that just means whomever is in that role has to come up to speed quickly on a host of technical matters & be able to sort them out, manage the agenda & provide impartial advice & support to the CEO throughout. That's a challenging wishlist for anyone.

In any case, I'm not aware of Dr George 'pushing' for anything. And defintiely not some kind of retrospective accountability. I can agree that, looking forward, someone like Dr George would be supportive of injecting greater levels of activity into the Board. And I wonder how long both Jane Bell and Philip Facchina will remain in non-exec roles - much like Dr Philip Krause. But this is simply a function of a (relatively) lean corporation.

As I've said previously, I think there's enormous respect from Dr George for the sheer number of Phase III research programs being juggled through regulatory compliance here by CEO Itescu's team, all the while keeping R&D bubbling along & while operations gear up. Contrary to the downrampers & whingers, it's not - on the financial accounts I'm reading - an operation that's being run fat. The fact is that MSB's total employment is only 83 FTE employees (according to Market Screener) & it's unissued share capital is still highly valued i.e. its market cap is AUD 1.256bn. That's not bad. Cf Gamida Cell - Bankrupt - Employees 147 - Market Cap US$2.39m/ Cf Athersys - Bankrupt - Employees 24 - Market Cap US$13m / Cf Sangamo Therapeutics - Not bankrupt - Employees 405 - Market Cap US$ 113m.

Anyhow, the point I'm trying to make is that I think the Board is working well as a Board, from what I can see publicly. And Dr G's interest in buying more shares in Mesoblast Ltd at the ridiculous prices at the moment - and can you blame him, I would if I could - is NOT in my experience an unequivocal interest in anything other than the investment on its face. In fact, I think Dr George would have been the least concerned or upset MSB director regarding the Placement & Entitlement Offer, because he's the one most likely to have relatively liquid funds available to take up any permitted entitlement or placement offer & any top-up offer. The George family market buying may well have started out as purely opportunistic averaging down.

However, given the closeness with which the Board has worked over the last 2 years, I suspect there is more to it, and I think that - behind the scenes - there's now a need seen at Board level to improve the corporation's ability to protect against the even bigger fish out there. And that's what I see the Board members doing - each to his or her own financial capacities (not sure about Dr Rose). They're clearly talking with each other about what's going on.

But I think you & I will still be drinking (& enjoying) that beer in November - of course, not quite the Château de Chasselay that we deserve Obadiah.

Cheers

PS: I did appreciate that you took the time to type that stuff up in a Word program before posting it. Kudos.