Ann: MSB to Host Virtual Symposium with KOL on GvHD, page-5

Good morning All,
Attached is "real world" update by Elima Piros.

Exciting times ahead and also BIG thank you to otherperspective for thoughts on DREAM HF-1 trial and sharing some potential near term outcomes.
Best, Anjo

	Cantor Fitzgerald Equity Research
1	June 17, 2019

Mesoblast Ltd. ADR (MESO - Overweight, Target: $23.00)

Real World Clinical Experience of Remestemcel-L Underscores True Market Potential Company Update Investment Summary: We reiterate our Overweight rating and 12-month price target of $23/ADR on Mesoblast. This morning, the company hosted a virtual symposium to give an in-depth overview on the remestemcel-L data in steroid refractory acute graft versus host disease (SR-aGvHD) and commercialization strategy. Additionally, Dr. Prockop of Memorial Sloan Kettering Cancer Center (MSKCC) discussed her opinion on the drug based off real-life clinical experience. Our key conclusions from the call are that 1) physicians have had positive experience using remestemcel-L in clinical practices, 2) the competitive market for pediatric patients is small, with existing concerns in place for other treatment options, 3) Mesoblast will be prepared for the commercial launch, in part due to the unique advantage of observing the commercialization progress of TEMCELL in Japan. Real Life Clinical Experience Checks the Boxes. We have highlighted that the recent Jakafi (marketed by INCY - N, Covered by A. Young) approval is positive read-across for Mesoblast, primarily due to trial design similarities. While Mesoblast will initially be targeting approval for the use in pediatric patients, there will be some competitive overlap in patients ages 12-17. Dr. Prockop highlighted that Jakafi has a concerning side effect profile (infections, edema, cytopenias) and noted that patients at MSKCC will be considered for other trials first before receiving this treatment. The physician discussed two real world clinical experiences of using Remestemcel-L where patients achieved complete responses by Day 42 and 64. Remarkably, both patients presented late stage GvHD, which have typically demonstrated the lowest probability of survival according to the maximum GvHD scores. Dr. Prockop indicated she was impressed with the safety profile and rapid response of remestemcel-L in her practice. Comprehensive Commercialization Strategy. Based on HealthCore Claims Analysis, Mesoblast highlighted that the cost of treating pediatric patients is ~$500,000 vs. ~$200,000 for adults. We believe our estimated market price of $450,000 is justified due to these costs, and is relatively in line with other comps. The main driver for the higher pediatric cost is that these patients spend more time being hospitalized. Mesoblast anticipates the split of the U.S. reimbursement landscape will be 37% outpatient and 63% inpatient. Further, the company expects the estimated payer mix to be ~58% commercial, ~39% Medicaid, and the rest by other public insurances. Following the potential 2020 pediatric launch in the U.S., future plans could include launching ex-U.S., and targeting chronic GvHD and SR-aGVHD adult patients. We expect an approval in 2020, with peak U.S. sales of $100 million (we model pediatrics only at this time). .