Mesoblast LimitedMESO: Price: $11.33; Market Cap (M):...

Mesoblast Limited

MESO: Price: $11.33; Market Cap (M): $1,323 Rating: Buy; Price Target: $21.00

Swayampakula Ramakanth, Ph.D.

Arthur He, Ph.D.

Sean Lee

Sean Kang

We Remain Bullish on Ryoncil Approval; Reiterate Buy

Risk benefit ratio is still in favor of Ryoncil.On August 11, the FDA published the briefing documents for the upcoming Oncologic Drugs Advisory Committee (ODAC) meeting to evaluate Mesoblast’s biologics license application (BLA) filing for Ryoncil (remestemcel-L) for the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD), which is scheduled for this Thursday, August 13. Recall, the company submitted the BLA application in March and the agency has designated a PDUFA date of September 30, 2020. After reviewing the FDA briefing documents, we believe that Ryoncil is likely to be approved before the PDUFA date due to a strong combination of safety and efficacy, while the main issues raised by the FDA are addressable. At the same time, we note that the agency could request the company to complete a post-marketing study in order to provide additional data on these issues.