DYOR. Not advice.
Analysis is highly speculative and intended to provide an indication of upside potential in the context of positive outcomes from trials and associated regulatory approval. Actual revenues and earnings will depend on commercialisation strategies selected by Mesoblast.
For Paediatric GVHD and COVID ARDS from my calculations I arrive at a price valuation/target by June 2021 (using P/E 20.0):
- MSB $25.00
- MESO $92.00 ( at exchange rate $0.73, 5 x MSB = 1 x MESO )
For now I have excluded other indications such as Chronic Lower Back Pain and Congestive Heart Failure. If we have positive trial outcomes I will update this analysis.
I have this extract from the transcript of the Panel discussion on MSC scale up at the Alliance for Cell Therapy:
View attachment 2500130
That's from this video:
So I can use this 10,000 patients in 6 months figure to rework my earlier analysis.
Here are the new assumptions (all figures US market only):
- Treatment cost @ USD $70k per dose
(I assumed a slightly lower figure than Edison and Bell Potter estimates)
- Gross margin at 60% on 100% of revenue
- GVHD
- 4 doses per patient
- 396 paediatric patients pa (198 in the second half of FY2021)
- 1,662 adult patients ( I assume label extension from FY2023)
- COVID ARDS
- 2 doses per patient
- 10,000 patients treated in the second half of FY2021 (6-month period)
- 10,000 patients treated in FY2022 (12-month period, assumption is that vaccine rollout reduces number of COVID ARDS patients treated starting in middle of next year, this recognises time to vaccinate large populations)
- patients treated then reduces at a rate of 50% per year
- Non-COVID ARDS
- 2 doses per patient
- Ramp-up over 3 years from 7,000 patients in FY2022 to 21,000 patients in FY2024
- Interest 10% pa on USD $67.5M debt
- Depreciation/amortisation at either 7% of EBITDA
- Tax at 30% (Australian company tax rate)
- Cash at end of June quarter USD $129M is sufficient to bootstrap commercial operations and achieve positive cashflow without further dilution
View attachment 2500190
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(20min delay)