Maxim Research - New York

Research from Maxim:

Column 1

0

Mesoblast's recent Australian capital raises may have triggered selling in the stock, and concerns over the cash burn and the next raise have pressured the stock since its peak in late 2Q17. We believe the focus needs to shift to trial outcomes and timelines. Mesoblast is clearly focusing the Street this way too, and provided updated timelines for key clinical programs in heart failure, disc degeneration and GvHD: MSC-100-IV, in steroid refractory acute GvHD has been granted fast track designation and the open-label P3 study in pediatric patients (N=60) is on track to report data in 2H17. In Disc degeneration, MPC-06-ID is in a P3 study (N=360) that is expected to complete enrollment in 4Q17. The study is evaluating durable pain reduction and functional improvement (aiming for similar results observed in the N=100 P2 study). In heart failure, MPC-150-IM is currently in two ongoing studies. The lead P3 program in class II-III HF patients has enrolled over 400 patients and should complete enrollment (N=600) in 2H18. The N=159 P2 study in end-stage heart failure patients should complete enrollment in 4Q17 and report data in early 2018. In addition, more data from MPC-300-IV in anti-TNF refractory rheumatoid arthritis (12-month follow-up) patients is expected in 3Q17. A pivotal program will be designed based on the totality of the data. Conclusion: Mesoblast continues to make progress across multiple late-stage regenerative medicine programs. Key data points lay ahead in 2017 and into 2018, which if positive should provide catalysts for the stock, in our view.

​