MSB - a new dawn, page-1575

I have been thinking a lot about all the dynamics we have going on right now.

The approval of Ryoncil is a massive de-risker. It doesn’t feel that way as we have fallen so far from the high just after approval but we are up so far from the share price in March 2024 when they announced a path forward for the Ryoncil BLA. Without that approval there was doubt that the company would stay afloat.

If the company is able to be profitable with the sales of Ryoncil is yet to be proven to institutions and potential partners.

There are two inflection points coming up in the very near term for us.

The first is updates on the sales of Ryoncil. Is it going up? Is it flat or going down? Were the 15 kits sold clearing patient backlog or is there ongoing demand? Until sales are proven to be sustainable and possibly growing then there is still risk. We may get a mid cycle update or we may wait until the 4C at the end of July. Insto’s and partners may wait until later in the year to see 2 quarters of sales before they decide it is an actual de-risking event, which I understand is common. If sales went down then our share price would take a hit. The risk will remain, can Mesoblast support operations with Ryoncil sales? If sales are flat or up, that is a big deal but maybe not quite enough evidence for the big boys to come to the table.

The second inflection is the AA BLA for HFrEF. The company announced they requested the Type B meeting on April 3. That means the meeting will occur by June 3. The FDA will have the meeting within 60 days of the request with an average of 50 days. They have RMAT designation for this and that includes rolling conversations with the FDA. They have been working on this BLA with the FDA since mid 2023, achieving AA eligibility on March 11, 2024. That is a lot of rolling conversations and discussion with the FDA, we are nearing 2 years of conversations. At this point, the Briefing Package has likely been submitted to the FDA as it is needed 2 weeks before the Type B meeting at the latest. The wheels are turning, albeit in the background from our view. There is likely a blackout period for insiders in place.

I doubt that we would have this Type B meeting scheduled for final CMC, post approval trial design and label happening if the company wasn’t quite sure of a positive outcome, especially after nearly 2 years of work with the FDA to get it here. However, there is risk. There is new leadership at the FDA, there are political dynamics. If we get knocked back on the AA pathway, that will be a big hit. Will Mesoblast get the HFrEF BLA over the line with the FDA and how long will it take?

Since the Type B meeting is happening by June 3 at the latest, we may get an update if the guidance was clear. They may wait (prudent and conservative move) for official meeting minutes by July 3 at the latest.

So there is this convergence in June/July with both inflection points. I feel the risk, I am hopeful for good outcomes on both. I also understand that the big boys and partners will need to see results of both of these before they consider a buy in.

The Type B meeting may have already happened or may happen before June 3. We may get confirmation of positive guidance soon or we may wait all the way until July to get that information. We may get monthly updates on Ryoncil sales or we may wait until the 4C. Toss in the global market uncertainty and I understand the share price today. I don’t like it, but I understand it and I also maintain a belief in the potential of the company long term.

I do personally believe that if we have good sales and good guidance on the BLA that the share price will reflect it. It is a waiting game now, for us and for potential partners and for the big end of town.

Sorry this is long, this has been rolling around in my head for a few days. The next 8 weeks are very important and set the cadence for the next 2 years for us.

D#