Not bad MSB!

https://www.********.au/2024/04/03/mesoblast-share-price-dumps-10-as-excitement-simmers-on-fda-submission

After yesterday's explosive session, the Mesoblast Ltd (ASX: MSB) share price is retreating today.

As we tip past midday, shares in the clinical-stage drug developer are down 10% to 85.5 cents apiece. The move paints a vastly different scene from what was portrayed yesterday, with the Mesoblast share price blazing 71% higher as $58.4 million worth of shares changed hands.

Here's a refresher if you're wondering what's behind this heightened volatility.

Another chance

Back in August last year, the Mesoblast share price suffered a crippling blow.

The US Food and Drug Administration (FDA) informed the company that it required more data to support marketing approval for remestemcel-L to treat pediatric steroid-refractory acute graft versus host disease (SR-aGVHD).

The consequence of this outcome on Mesoblast shares is patently clear on a 1-year price chart, as shown below. Shares quickly caved from $1.09 to 38 cents in a week, erasing almost $600 million of market capitalisation in the process.

Zoom1M3M6MYTD1Y5Y10YALL

Mesoblast PriceMay '23Jul '23Sep '23Nov '23Jan '24Mar '24Jun '23Aug '23Oct '23Dec '23Feb '24Apr '…May '23Jul '23Sep '23Nov '23Jan '24Mar '2400.51Zoom1M3M6MYTD1Y5Y10YALLApr 2, 2023→Apr 3, 2024www.********.au

The setback prompted Mesoblast to raise $97 million of capital at a time when it would be most dilutive (due to the reduced share price). To say the past eight months, or thereabouts, have been a harrowing time for Mesoblast investors would be putting it lightly.

However, last week produced a spark of hope. The FDA informed Mesoblast that its phase 3 study data now appeared adequate for submission of its Biologics License Application (BLA). In turn, management is confident in refiling its application for remestemcel-L in children with SR-aGVHD.

Mesoblast aims to submit its application to the FDA in the next quarter.

The turnaround corresponds with a 177% rise in the Mesoblast share price this year. With shares trading 10.5% lower today, there's a possibility shareholders are taking some profits off the table.

Is the Mesoblast share price outperforming ASX 300 peers?

The S&P/ASX 300 Index (ASX: XKO) is the baseline for outperformance. As of today, the index is up 2.4% year-to-date, which means Mesoblast has beaten the benchmark by a staggering 174.6% in 2024.

But what about when compared to the top-performing ASX 300 shares?

Well, as it turns out, Mesoblast is also the top of that bunch. The next closest is Zip Co Ltd (ASX: ZIP), with its sizeable 107% gain this year.

https://www.copyright link/companies/healthcare-and-fitness/mesoblast-surges-on-fda-rare-paediatric-disease-designation-20240119-p5eyoa

Mesoblast surges on FDA ‘rare paediatric disease’ designation

Joanna MatherWealth editor

Jan 19, 2024 – 5.45pm

Save

Share

Gift this article

Listen to this article

3 min

Shares in Australian biopharmaceutical company Mesoblast jumped as much as 25 per cent after the US Food and Drug Administration recognised its cell therapy, Revascor, as a potential breakthrough treatment for heart disease in newborn babies.

The Melbourne-based biotech’s stock price rose to 34¢ on Friday.

Revascor is used to treat hypoplastic left heart syndrome (HLHS), a severe congenital heart disease in which one side of the heart does not fully develop. The condition is responsible for between 25 per cent to 40 per cent of newborn cardiac deaths.

In cases of hypoplastic left heart syndrome (HLHS), one side of the heart does not fully develop. Alamy

“Today’s announcement illustrates the strength of the relationship we have developed with the FDA across our product portfolio,” Mesoblast chief executive Silviu Itescu said.

“In addition to the potential to see our product Revascor gain approval for children with congenital heart disease, we will meet with FDA this quarter to discuss the approval path for Revascor in adults with heart failure.

RELATED QUOTES

MSBMesoblast Limited

$0.885 -6.84%

1 year1 day

Apr 23Jul 23Oct 23Apr 240.0000.3500.7001.0501.400

Updated: Apr 3, 2024 – 11.26pm. Data is 20 mins delayed.

View MSB related articles

Advertisement

“The share price reaction to today’s announcement illustrates the investor appetite to support our progress, and we expect that 2024 will be a break-through year for our company.”

The FDA granted Revascor what is called a “rare paediatric disease” (RPD) designation on Friday. The designation is given to drugs and biological products that offer major advances in treatment for rare diseases, which in the US is defined as a condition affecting fewer than 20,000 people.

The designation means Mesoblast may be eligible to receive a priority review voucher. These vouchers can be redeemed for a priority review of a subsequent marketing application for a different product or sold to other companies.

The scheme is designed to spur the development of new treatments for diseases that would otherwise not attract interest from pharmaceutical companies due to the cost of development and lack of market opportunities.

The vouchers are valuable because they can be used to bring treatments with broader application and profitability to market earlier.

Mr Itescu said Mesoblast had also made “great progress” in recent months in providing the FDA with additional information it had requested about the company’s lead product, Ryoncil.

Ryoncil is a stem cell-based injectable treatment for children battling severe immune responses after bone marrow transplants.

Results from a blind randomised trial of Revascor involving 19 children with HLHS in the US were published in the December 2023 issue of The Journal of Thoracic and Cardiovascular Surgery Open.

A single administration of Revascor resulted in “significantly larger” increases in the left ventricle, which meant the children could have surgery to correct the condition.

Mesoblast listed in December of 2004. The stock price peaked in 2020 when it was trading above $5, boosted by expectations its research could have applications for COVID-19.

But FDA approval has been a long time coming, frustrating investors.

“I can’t think of another company in the ASX 300 that has spent $1 billion in cash and is yet to deliver a product to market,” Ownership Matters’ Simon Connal told The Australian Financial Review last August.

Mesoblast raised $60.3 million at 30¢ a share in December.