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At the most recent closing price, Mesoblast CEO Silviu Itescu’s shareholding in the company he founded was worth $391 million – $34 million more than it was one day earlier. Photo: Arsineh Houspian
Shares in Melbourne-based biotechnology company Mesoblast have risen strongly, boosting the fortunes of main shareholder and BRW Rich Lister Silviu Itescu by $34 million.

Mesoblast is undertaking a lumbar spinal fusion trial to develop a new treatment, which will benefit patients with serious back problems. The sharemarket gains came after the announcement on Friday of favourable results from its latest clinical trial.

Shares rose to $5.74 at the close of trading on January 11, a 9.5 per cent increase on the January 10 closing price. In early trading yesterday, Mesoblast shares were selling for $6, a 14.5 per cent increase from January 10, before closing at $5.78.

The rise pushed Mesoblast’s market capitalisation to $1.7 billion. The biggest beneficiary of the increase is Mesoblast’s chief executive and main shareholder Silviu Itescu.

On the day the announcement was made, Itescu’s shareholding in the company he founded was worth $391 million – $34 million more than it was one day earlier.

Itescu was ranked 88th on last year’s Rich 200 with an estimated net wealth of $505 million.

Mesoblast is in the process of bringing a range of off-the-shelf regenerative medicines to market. It is a world leader in the development of adult stem cell research.

Friday’s positive test results demonstrate that Mesoblast’s treatment is as effective as the “gold standard” bone autograft treatment and has the added benefit of not requiring follow-up surgery, according to the company.

Mesoblast says the results are good enough to support a phase 3 trial, a vital step in bringing regenerative medicines to market.

Bad backs are one of the many conditions Mesoblast is seeking to treat; it is developing medicines for a wide range of conditions, including diabetes and heart problems.

Mesoblast is one of the big success stories in the biotechnology sector. Although its products are still in development (BRW reported last year that sales were due to begin in 2015), it is well-placed to tap multi-billion dollar markets.

In 2012, the bone graft substitute market alone was worth $1.6 billion.

The complex nature of its products helped make Mesoblast popular with short-sellers last year. Mesoblast stock was worth as much as $8.11 and as little as $4.22 in 2012.