Well I trust everyone had a good weekend. Any LTH whose thoughts did not turn once of twice (or in my case several hundred) to the upcoming "news" events concerning Mesoblast, well done, excellent compartmentalisation, well beyond me. This thread is the Investment case. The investment case is driven by the science ultimately (it has to work), but putting that to one side at the moment it appears to be clear pathways to approval and in this case the imminent announcements in particular.
I would be interested in that context, from hearing from other investors and genuine potential investors as to what they believe "good" looks like for that pathway for when the next announcements are made.
If I get something wrong (I do tend to get my terms mixed up) please correct me All these are pathways, (I assume that we all accept the Science and that tests will repeat the same answers.) all of these should result in a re rating of the share price (imo)
Covid Ards Options 1. Confirmatory trial (Expect used in Combination with dexamethasone and without) 2. EUA (with dexamethasone best SOC) 3. Accelerated approval with Confirmatory trial 4. Approval Now all of these are clear pathways, which would be a successful outcome at this time. I have deliberately left out the Novartis deal as all these are FDA dependent and to put it bluntly, Novartis have not walked away because they are waiting I presume to see what the data says. Well any of the answers above, I believe we could interpret that as the data being really rather good. (What are your thoughts? Would 1 for instance be a bad result in your opinion?)
There might be (help me out here) some sort of fast track application which may have the backing of Novartis being on board. The backing of Novartis would be well taken by the market as they would have had the benefit of seeing the data, and this would be a endorsement of the potential from outside the board and cheerleading investors. This would be the context where them being on board would be crucial. However if they did pull out and we had any of the options 1-4, would anyone consider that a bad result?
Have I missed anything, please chip in. This is all about the investment case for Mesoblast.
SRGvHD This has an almost totemic symbolism to the company but depending on the FDA and Novartis it could (and here the true tragedy unfolds) be parked up for who knows how long as cashflow will dictate the best options for the company. Like the original FDA decision, how many children will die because of it? We know there is a unmet need, but there always has been. We know that the option for adults, seems to me as a layman, to be just a poison with no real benefit, but either way, it seems clear that if Rem-L is allowed on the market it will soon be the dominant choice in adults. Doctors are not that stupid. So here I think are options are fairly limited. 1. Some sort of unmet need approval however it is dressed up. Running alongside a confirmatory RCT trial. 2. A speeded up application leading to some sort of approval (ie re submit and we will find a way to get you going which means sales and cashflow) 3. Start again, which which I fear will shelve any plans.
These are the pathways/signs/news that we await. The start of a major re rating of this company. Once the pathways are clear and analysts can see the way forward. (little explanation here, not those paid for type but proper ones including funds managers) they can stick the figures into their spreadsheets and discount XY and Z and come up with a figure. That figure will then grow as we get closer to approval depending on the pathway and the ramping up of production which we all want to understand( how and how much they can produce and at what price sales.) Then you watch the share price.
The reason for SRGvHD being shelved (imo) if a re start of the process is required (all be it a shortened one), is the money that will be needed for our go it alone CLBP confirmatory Opioid reduction trial, which should be short with a well selected PE point. I am not ruling out something spectacular like AA given the crisis in the States, but I do buy a lottery ticket.
Once the current in tray has been cleared, this will come into focus, the European option being taken up would again be a massive vote of confidence, however this therapy seems to be about opioid reduction and that appears to be rampant in America and dealt with differently over here.
However more importantly I think, is the Ards story. That pathway to Covid Ards approval, will focus attention on the fact that our therapies are good news in fighting inflammation. Just this trial starting would be well received on the back of the other positive news and the re rating of the company. So as this pathway will be clearer this year, expect it to influence the share price this year.
Heart Was the jewel in the crown, now it seems one of many jewels. Can expect this pathway to be lit by the JV announcement again this year which will (imo) set out the trials and PE that will be included. It will be ambitious. Novartis as partner? Well they would be my favourite but that is another massive link up with the same company.
IBS & IBD I am so encourage by the initial results. Once outsiders realise what Mesoblast therapies can do, all potential new therapies will have an effect on the share price, increasing substantially as it moves along the approval chain, much shortened by approvals before.
Ultimately once the story of the science is understood and proven to work by having those initial approvals, (imo) the true potential and hence the multiple on earnings can be applied and it won't be 20x either.
Look I post this as I would like to see more considered informed posters help us understand the pathway and what "good" looks like in regard to the expectant announcements. Either Options 1-4 and or Novartis confirmation is good news. How quickly the markets react will depend on which one but (imo) is not the most important thing. Ultimately it is the fact that we are moving along that pathway. We wait but let's enjoy the anticipation. Earning Call the day? Regards Yelrom
MSB Price at posting:
$1.94 Sentiment: Buy Disclosure: Held
(20min delay)