As a very recent new investor in MSB, I am most impressed with the standard of comments and analysis on MSB on HotCopper. One problem though is how quickly these great posts get overtaken by so many pages of other posts, and how hard it is to get the best of them together in a widely focussed document.
So, I am starting the ball rolling on the reasons I invested in MSB. It is only a start and can obviously be greatly improved by those with more experience than I have. I undertake to incorporate others' reasons to invest if they add to mine or express mine better or more accurately. So please provide any improvements to the following and I intend to update it periodically.
Reasons I Invested in Mesoblast:
1.Hasworld’s best and broadest IP and Patents for stem cell treatments.
2.Mesoblastis arguably the most advanced listed stem cell company globally.
3.MSB isat the rewarding end of a very long and expensive development cycle, with muchcapital expended. Present shareholders are benefiting from large capitalinvestments by previous shareholders. It has raised over $1B in fresh equitysince listing in 2004.
4.MSB isin transition from an R&D company to a commercial organisation, worth muchmore as a result. If, as now expected within 6 months, they break through withFDA approvals and USA sales, they would likely gain a large amount of theavailable market in this broad new field of cellular medicine.
5.Hasone product, Ryoncil, expected to get FDA approval by September 2020 for use inchildren with steroid refractory aGVHD. These children would have a very poorprognosis without Ryoncil. The strategy is to then get a label extension forAdult SR_aGVHD and life-cycle extensions for other indications, includingChronic GVHD and Crohns Disease.
6.Hasone product approved and on the market in Japan, on a partner and royaltiesmodel, for AGVHD. Partner is upgrading manufacturing due to demand beinghigher than expected.
7.Hasanother product approved and on the market in Europe for Perianal Fistula.
8.Two furtherreadouts from completed Stage 3 Trials are due mid year 2020: Advanced heartfailure & Chronic lower back pain due to Degenerative Disc Disease.
9.Hasproducts at Phase 2 trials for Crohns Disease,Rheumatoid Arthritis, Diabetic Nephropathy and End-Stage Heart Failure.
10.Hasfour significant partnership agreements, reflecting growing confidence incellular medicine.
11.Covid19 has placed a huge opportunity to have Ryoncil approved or label extended fora completely new indication (Covid 19 ARDS) within 6 months total from first USAtrial in March-April 2020. From not even planning to treat ARDS (which isalready a very big market before Covid), MSB has had strong cooperation fromFDA, medical experts and authorities in USA. A small 12 person trial in NewYork, had remarkable success on very seriously ill people: 83% survival inventilator-dependent COVID-19 patients (10/12) with moderate/severe acuterespiratory distress syndrome (ARDS) treated with two infusions of Mesoblast’sallogeneic cell therapy remestemcel-L within the first five days underemergency compassionate use at New York City’s Mt Sinai hospital during theperiod March-April 2020. The trial also reported that 75% of patients managedto come off ventilator support within a ten day period. At two major referral hospital networks in New York during the same time period, there was only 12% survival in ventilator-dependent COVID-19 patients. The remestemcel-L product works by counteracting the inflammatory process in the lungs caused by COVID-19.
12.Asubsequent 300 person Stage 3 trial in USA is now about half way through a 3-4month period to completion, at no cost to MSB (cost would normally be around$50M). It is being conducted as a public-private partnership in a collaborationwith the Cardiothoracic Surgical Trials Network (CTSN), which was establishedby the United States National Institutes of Health’s National Heart, Lung andBlood Institute (NHLBI). This in itself is a major endorsement of the potentialof cellular medicine.
13.Althoughthere is likely to be several other treatments for earlier stage Covid 19patients (e.g. Dexamethazone), it appears there are none that are anywhere nearas effective in late stage ARDS. Revenue for Covid ARDS treatment in USA aloneis likely to be hundreds of millions, if not billions within a relatively shorttime, providing MSB can ensure sufficient quantities are manufactured. Then thereis a major ongoing application for non-Covid ARDS.
14.Thereis now an opportunity for strong support to go to 3D manufacturing in the nearterm, to generate sufficient quantity at stronger margins. Possible majorPharma deal and / or Government assistance.
15.Mesoblast’srecent financial performance is showing improvement. The company recorded an113% increase in overall revenues to US$31.5 million for the first 9 months ofFY 2020, compared to the prior corresponding period. Mesoblast also recorded a127% increase from milestone revenues involving strategic partnerships.
16.Thereare many strongly positive announcements likely to come to the market betweenJune and September 2020.
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