MSB short selling data - 25th.Jan.2019

I think 2019 will be an inflection point. On one hand, investors have two BLA filing to look for. On the other, short selling amount has never been this high, standing at around 8.24% (41,086,799 shares). Two of the biggest challenges for MSB have been financing needs and outcomes of trials. Whenever one of this challenges looms in, share price usually drop in anticipation.

Against the backdrop of having around $92m in cash now, which should cover financing need during CY2019, this left investors with concerns around its trial results and commercialization approval. At the moment, maybe the market is in a price discovery mode, trying to figure out the probability and time frame for BLA approval.

See the attachment for a document on the probability of historical approval rate in US.
Clinical Development Success Rates 2006-2015 - BIO, Biomedtracker, Amplion 2016.pdf

From Phase 3 to BLA, the success rate is 57% for biologic products. Once BLA is approved, its pathway to market approval is 88%. So, hypothetically, the chance of Mesoblast  phase 3 products to make it to the market sits about at 50%.

On product basis, approval chance:
1. Remestemcel-L approval would probably be higher, given its approval in Japan.
2. Revascor (Eng-stage heart failure) approval is probably lower than average, given it only met the endpoint to reduce bleeding.(depend on critical, FDA sees bleeding)
3.  Revascor (Advance-stage heart failure) might be higher than with end-stage, given successful outcome of a per-specifified futility analysis of phase 3 trial endpoint for the first 270 patients.
3. Chronic pain approval is reasonable given successful phase 2.

So, if I were to guess, the chance of success
Remestemcel-L >>  Revascor (Advance-stage heart failure) >= average approval probability = Chronic pain approval  > Revascor (Eng-stage heart failure)

So, for retail investors, it's probably useful to decide for oneself, how much value do we place on each of its pipeline, adjusted for the probability and time still required before getting the verdict on approval.