Hello All, See attached Ladenberg note as follows....

Hello All,

See attached Ladenberg note as follows.

LADENBERGTHALMANN :

PRICETARGET CHANGE - NOVEMBER 2020

MesoblastLtd.

WWNovartis Agreement for remestemcel-L in ARDS Inclusive of COVID-19; Raise PT

Yesterday,the company announced FY-Q1-2021 financial results as well as a worldwide

licenseand collaboration agreement with Novartis (NVS, $87.20, Not Rated) for the

development,manufacture, and commercialization of remestemcel-L.

TheNovartis agreement will initially be focused upon the treatment of ARDSinclusive

ofCOVID-19 ARDS and alternative respiratory conditions. Novartis will initiate a

Phase3 trial evaluating the effects of remestemcel-L on non-COVID-19 ARDS (acute

respiratorydistress syndrome). The trial will begin subsequent to the closing of the

agreementand completion and readout of the ongoing COVID-19 ARDS Phase 3 trial.

Todate, approximately 180 patients of 300 total patients have been enrolled(enrollment

completionanticipated for CY-Q4-2020) and the independent DSMB has recommended

continuationfollowing two of the three interim analyses. Recall, the primary endpoint is

allcause mortality up to 30 days with a secondary endpoint of days alive offventilator

within60 days.

Thekey terms of the Novartis deal include an upfront payment of $50 million of

which$25 million will be paid in equity. Further, the company could receive a totalof

$505million contingent upon various pre-commercialization milestones related to the

ARDSindications. In terms of post-commercialization, the company could receive upto

$750million based upon sales milestones and tiered double-digit royalties onproduct

sales.The company will continue to manufacture remestemcel-L for both clinical and

commercialuses and Novartis will purchase the commercial product under agreed pricing

arrangements.Novartis will also be required to fund any capital expenditure necessary

toexpand manufacturing capabilities.

Thecompany also provided an update upon the ongoing dialogue with the FDA

regardingthe SR-aGVHD remestemcel-L BLA application. Recall, the FDA responded

to thecompany with a CRL. The company requested a Type A meeting which was

heldon November 17, 2020. While the definitive outcome remains unknown until the

disbursementof the formal minutes to the company, it does not appear that the FDA

willagree to an accelerated approval pathway with a post-approval study. Thecompany

notedthat if the FDA definitively does not agree to the pathway, the company willrequest

andadditional Type A meeting to initiate the FDA dispute resolution pathway. Weare

unableto determine the timing or outcome of the FDA response at this time. We do

recognize,however, that there remains a large unmet need as there are no current

treatmentsfor children under the age of 12.

Basedon our Comparable Company Valuation table, we believe that it is appropriate to

valuethe company based on its representative peers and as such we have determined

thatthe company’s valuation should be 12 times (previously 11 times) our FY-2023

revenue estimate discounted by one year at 12%, or $17.25 (previously$16.00).

Turning to the financialresults for the quarter, the company announced Commercialization

revenue of $1.3 millionwhich is an 86% increase sequentially and 30% decrease yearover-

year. OPEX totaled $38.9million with $19.3 from Research and Development, $11.9

million from Manufacturing,and $7.7 million from Management and Administration. R&D

increased 56% related tothe ongoing Phase 3 trial for COVID-19 ARDS and

Manufacturing increased341% y/y as the company expanded manufacturing capacity and

capabilities includingproprietary xeno-free technologies to increase output and 3D

bioreactors to reducelabor and increase efficiencies. Net loss totaled $24.5 million and

included a $15.1 milliongain on contingent consideration as well as non-cash items

including stock-basedcompensation. Our models estimated revenue, OPEX, and net loss

of $1.7 million, $31.0million, and $33.3 million, respectively.

For MPC-06-ID andRevascor, the company provided a brief update. Recall, the company

entered into adevelopment and commercialization partnership with Grünenthal for LATAM

and Europe. The companyalso anticipates data from the previously completed Phase 3

trial for chronic lowback pain in 404 patients to readout in the coming weeks. These data

will help inform thepotential European Phase 3 trial. Additionally, the results could support

regulatory approval inthe US.

Revascor, the company’scandidate for advanced and end-stage heart failure, will also

have a data readoutduring CY-Q4-2020. Recall, the study surpassed the number of

primary endpoint eventsrequired for trial completion. As of current, the quality review is

being completed at thestudy sites. Positive data from the study could support potential

regulatory approval inthe US. We are highly encouraged by the company’s progress and

recognizenumerous near-term data readouts that could acts as catalysts.

END OF NOTE.