Mesoblast Quarterly Cash Flow Report

RECORD REVENUES FROM JAPAN PRODUCT SALES FOR THE PERIOD ENDED JUNE 30, 2019


MELBOURNE, Australia and NEW YORK, July 31, 2019 (GLOBE NEWSWIRE) -- Mesoblast Limited (Nasdaq:MESO; ASX:MSB) today reported its operational highlights and its quarterly cash flows for the fourth quarter (fourth quarter FY2019) and 12 months ended June 30, 2019 (FY2019). 

Mesoblast Chief Executive Dr Silviu Itescu stated: “It is pleasing to see the growth in revenues achieved by our Japanese partner in the treatment of acute graft versus host disease in the first three years post launch. This augurs well for the potential uptake of remestemcel-L in the treatment of GVHD, if approved, in the United States.”

Key Highlights

  • Increased revenues(1) of 54%(2) for the quarter and 37%(3) for the year on sales of TEMCELL® HS. Inj.(4) in Japan steroid-refractory acute graft versus host disease (SR-aGVHD) by Mesoblast licensee JCR Pharmaceuticals Co. Ltd.
  • Mesoblast initiated a rolling Biologics License Application (BLA) with the United States Food and Drug Administration (FDA) for remestemcel-L in the treatment of pediatric aGVHD; in preparation for product launch, focus is on inventory and commercial team ramp up.
  • The FDA has granted Orphan Drug Designation for the use of rexlemestrocel-L (Revascor) for the prevention of post implantation mucosal bleeding in heart failure patients implanted with a left ventricular assist device (LVAD).
  • In late July Mesoblast had a positive meeting with the FDA to further define the registration pathway for the use of Revascor in the treatment of heart failure in patients with an LVAD, with formal minutes expected in coming weeks.
  • Cash on hand at June 30, 2019 was US$50.4 million (A$71.9 million); additional capital of US$35.0 million may be available under existing arrangements with Hercules Capital, Inc. and NovaQuest Capital Management, L.L.C.
  • The Kentgrove Capital equity facility for up to A$120.0 million (approx. US$85.0 million), which can be used at Mesoblast’s discretion, has been extended for two years.
  • The Company remains in advanced negotiations with a number of potential commercial partners regarding potential transactions and access to non-dilutive capital.(5)

(1)       Unaudited.
(2)       fourth quarter FY2019 compared to the fourth quarter FY2018.  Reported in constant currency.
(3)       FY2019 year compared to the FY2018 year.  Reported in constant currency.
(4)       TEMCELL HS. Inj. is a registered trademark of JCR Pharmaceuticals Co. Ltd.
(5)       Mesoblast does not make any representation or give any assurance that such a partnering transaction will be concluded.

Commentary on Appendix 4C Cash Flow Report

Milestone receipts of US$26.4 million received for FY2019 comprised:

  • US$20.0 million receipts from milestones received in relation to establishing a partnership with Tasly Pharmaceutical Group in China. 
  • US$5.4 million (€5 million) receipts from milestones received in relation to a patent license agreement with Takeda Pharmaceutical Company Limited.
  • US$1.0 million receipts from milestones received for JCR reaching cumulative net sales milestones for sales of TEMCELL® in Japan.

Royalty receipts received from sales of TEMCELL in Japan for the treatment of aGVHD were US$1.0 million for the fourth quarter FY2019 and US$4.4 million for FY2019. Royalty income recognized as revenue for the fourth quarter FY2019 and FY2019 was US$1.7 million and US$5.0 million respectively. The amounts recognized as revenue in the periods are higher than the amounts reported as cash received as royalty income recognized as revenue in the fourth quarter will not be received until July 2019.

Research and Development payments of US$8.3 million for the fourth quarter and US$48.5 million in FY2019, with costs being incurred in relation to Phase 3 programs in aGVHD, advanced chronic heart failure and chronic low back pain due to degenerative disc disease.

Manufacturing payments of US$4.3 million for the fourth quarter and US$13.4 million for FY2019 for commercial manufacturing investment to support potential launch of remestemcel-L.

Total Operating Activities net cash usage was US$19.1 million for the fourth quarter and US$57.8 million for FY2019.

About Mesoblast
Mesoblast Limited (Nasdaq: MESO; ASX: MSB) is a world leader in developing allogeneic (off-the-shelf) cellular medicines. The Company has leveraged its proprietary technology platform to establish a broad portfolio of late-stage product candidates with three product candidates in Phase 3 trials – acute graft versus host disease, chronic heart failure and chronic low back pain due to degenerative disc disease. Through a proprietary process, Mesoblast selects rare mesenchymal lineage precursor and stem cells from the bone marrow of healthy adults and creates master cell banks, which can be industrially expanded to produce thousands of doses from each donor that meet stringent release criteria, have lot to lot consistency, and can be used off-the-shelf without the need for tissue matching. Mesoblast has facilities in Melbourne, New York, Singapore and Texas and is listed on the Australian Securities Exchange (MSB) and on the Nasdaq (MESO). www.mesoblast.com

Forward-Looking Statements
This announcement includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements should not be read as a guarantee of future performance or results, and actual results may differ from the results anticipated in these forward-looking statements, and the differences may be material and adverse. Forward- looking statements include, but are not limited to, statements about: the initiation, timing, progress and results of Mesoblast’s preclinical and clinical studies, and Mesoblast’s research and development programs; Mesoblast’s ability to advance product candidates into, enroll and successfully complete, clinical studies, including multi-national clinical trials; Mesoblast’s ability to advance its manufacturing capabilities; the timing or likelihood of regulatory filings and approvals, manufacturing activities and product marketing activities, if any; the commercialization of Mesoblast’s product candidates, if approved; regulatory or public perceptions and market acceptance surrounding the use of stem-cell based therapies; the potential for Mesoblast’s product candidates, if any are approved, to be withdrawn from the market due to patient adverse events or deaths; the potential benefits of strategic collaboration agreements and Mesoblast’s ability to enter into and maintain established strategic collaborations; Mesoblast’s ability to establish and maintain intellectual property on its product candidates and Mesoblast’s ability to successfully defend these in cases of alleged infringement; the scope of protection Mesoblast is able to establish and maintain for intellectual property rights covering its product candidates and technology; estimates of Mesoblast’s expenses, future revenues, capital requirements and its needs for additional financing; Mesoblast’s financial performance; developments relating to Mesoblast’s competitors and industry; and the pricing and reimbursement of Mesoblast’s product candidates, if approved. You should read this press release together with our risk factors, in our most recently filed reports with the SEC or on our website. Uncertainties and risks that may cause Mesoblast’s actual results, performance or achievements to be materially different from those which may be expressed or implied by such statements, and accordingly, you should not place undue reliance on these forward-looking statements. We do not undertake any obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

For further information, please contact:

Julie MeldrumSchond Greenway
Corporate CommunicationsInvestor Relations
MesoblastMesoblast
T: +61 3 9639 6036T: +1 212 880 2060
Revenue from sales of TEMCELL® HS. Inj. in Japan