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Mesoblast Ltd (MESO)
NASDAQ:MESO
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Mesoblast
(NASDAQ:MESO)
42Neutral
Positive Factors
Financial Stability
Mesoblast is funded well into 2026, potentially extending further depending on the launch trajectory of Ryoncil in pediatric steroid refractory acute graft vs. host disease.
Market Opportunity
The potential pricing for Ryoncil in excess of $1.5M for a full course supports a significant market opportunity, validating the view that the GvHD opportunity alone could support Mesoblast's current valuation.
Regulatory Approval
Ryoncil gains approval in the US for pediatric steroid refractory acute graft vs host disease, marking a significant milestone for Mesoblast and validating FDA's supportive stance on cell therapy.
Negative Factors
Market Competition
Ryoncil's approval as the only drug for patients under 12 could provide a competitive advantage, especially in the 12-18 year-old segment where it overlaps with Jakafi.
Regulatory Risk
If Ryoncil is approved, it should help ameliorate much of the regulatory risk for cell therapy, unlocking further value from pipeline programs such as HF and CLBP.
Revenue Risk
FDA approval of Ryoncil represents a watershed moment for Mesoblast, leading to a reduction in revenue risk adjustment and an increase in the 12-month price target.
Mesoblast (MESO) vs. S&P 500 (SPY)
Market Cap
$1.54B
Dividend YieldN/A
Average Volume (3M)335.19K
Price to Earnings (P/E)―
Beta (1Y)1.99
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees73
SectorHealthcare
Sector Strength78
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.93
Shares Outstanding127,052,720
10 Day Avg. Volume257,106
30 Day Avg. Volume335,194
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)269.68
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$27.00Price Target Upside132.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Mesoblast Business Overview & Revenue Model
Company DescriptionMesoblast Limited, a biopharmaceutical company, develops and commercializes allogeneic cellular medicines in the United States, Australia, Singapore, the United Kingdom, and Switzerland. The company offers products in the areas of cardiovascular, spine orthopedic disorder, oncology, hematology, and immune-mediated and inflammatory diseases. Its proprietary regenerative medicine technology platform is based on specialized cells known as mesenchymal lineage cells. The company's products under the Phase III clinical trials include remestemcel-L for the treatment of steroid refractory acute graft versus host disease, as well as acute respiratory distress syndrome due to COVID-19 infection; Rexlemestrocel-L to treat advanced chronic heart failure; and MPC-06-ID for chronic low back pain due to degenerative disc disease. It is also developing MPC-300-IV for the treatment of biologic refractory rheumatoid arthritis diabetic nephropathy. The company has strategic partnerships with Tasly Pharmaceutical Group to offer MPC-150-IM for heart failure and MPC-25-IC for heart attacks in China; JCR Pharmaceuticals Co. Ltd. for the treatment of wound healing in patients with epidermolysis bullosa; and Grünenthal to develops and commercializes cell therapy for the treatment of chronic low back pain. Mesoblast Limited was incorporated in 2004 and is headquartered in Melbourne, Australia.
How the Company Makes MoneyMesoblast makes money primarily through the development and commercialization of its cell-based therapies. Revenue is generated through partnerships and licensing agreements with pharmaceutical companies, which can include upfront payments, milestone payments, and royalties on product sales. The company also aims to earn revenue from the direct sale of its proprietary therapies once they gain regulatory approval. Additionally, Mesoblast may receive government grants or funding for its research and development efforts, contributing to its revenue streams. Strategic collaborations and partnerships are significant factors that enhance Mesoblast's ability to commercialize its products and achieve market penetration.
Mesoblast Financial Statement Overview
Summary
Mesoblast faces substantial financial challenges, including consistent losses and negative cash flows. While the company maintains a reasonable equity ratio, the ongoing losses and liquidity issues pose significant risks to financial stability. Strategic improvements are necessary to enhance profitability and cash flow generation.Income Statement
Mesoblast has faced declining revenues over the past years, with a revenue drop in TTM compared to previous periods. The gross profit margin and net profit margin are negative, indicating high costs relative to revenue and significant net losses. EBIT and EBITDA margins are also negative, showing ongoing operational challenges.30
Negative
Balance Sheet
The company's debt-to-equity ratio indicates moderate leverage, which is typical for the biotechnology sector. However, the return on equity is negative due to consistent net losses. The equity ratio suggests a good proportion of the company's assets are funded by equity, providing some financial stability.45
Neutral
Cash Flow
Cash flow analysis reveals negative operating cash flow and free cash flow, highlighting liquidity challenges. The company's free cash flow to net income ratio is not favorable, as both metrics are negative, indicating a need for improved cash management.35
Negative
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.67M | 5.90M | 7.50M | 10.21M | 7.46M | 32.16M | Gross Profit |
| -22.57M | -35.17M | -47.42M | -53.36M | -78.28M | -49.34M | EBIT |
| -85.25M | -84.15M | -69.29M | -80.57M | -109.10M | -74.87M | EBITDA |
| -49.42M | -56.08M | -58.55M | -76.57M | -107.60M | -75.41M | Net Income Common Stockholders |
| -103.35M | -87.96M | -81.89M | -91.35M | -98.81M | -77.94M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 178.23M | 62.56M | 70.92M | 60.03M | 136.88M | 129.33M | Total Assets |
| 680.41M | 669.15M | 669.41M | 662.14M | 744.72M | 733.60M | Total Debt |
| 0.00 | 118.92M | 116.50M | 106.91M | 105.50M | 99.31M | Net Debt |
| -178.23M | 56.36M | 45.58M | 46.87M | -31.39M | -30.01M | Total Liabilities |
| 226.89M | 188.80M | 167.58M | 165.10M | 163.32M | 184.28M | Stockholders Equity |
| 453.52M | 480.36M | 501.84M | 497.04M | 581.40M | 549.33M |
| Cash Flow | Free Cash Flow | ||||
| -21.07M | -48.79M | -63.58M | -66.01M | -108.33M | -58.61M | Operating Cash Flow |
| -20.66M | -48.46M | -63.27M | -65.78M | -106.68M | -56.37M | Investing Cash Flow |
| 327.50K | -97.00K | -194.00K | -232.00K | -1.65M | -3.27M | Financing Cash Flow |
| 4.58M | 40.25M | 74.50M | -9.87M | 114.47M | 137.04M |
Mesoblast Technical Analysis
Negative
11.60
Price Trends
15.85
Negative
14.84
Negative
11.16
Positive
Market Momentum
-0.89
Positive
31.48
Neutral
10.97
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MESO, the sentiment is Negative. The current price of 11.6 is below the 20-day moving average (MA) of 13.16, below the 50-day MA of 15.85, and above the 200-day MA of 11.16, indicating a neutral trend. The MACD of -0.89 indicates Positive momentum. The RSI at 31.48 is Neutral, neither overbought nor oversold. The STOCH value of 10.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MESO.
Mesoblast Risk Analysis
Mesoblast disclosed 81 risk factors in its most recent earnings report. Mesoblast reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Mesoblast Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $10.59B | 24.57 | 12.68% | ― | 11.05% | ― | |
52 Neutral | $93.66M | ― | -80.11% | ― | -7.43% | 69.03% | |
52 Neutral | $271.51M | ― | -25.76% | ― | -2.09% | -13.01% | |
48 Neutral | $6.86B | 1.11 | -50.22% | 2.47% | 16.71% | 1.53% | |
42 Neutral | $86.76M | ― | -54.21% | ― | -78.55% | -0.92% | |
42 Neutral | $1.54B | ― | -21.26% | ― | ― | ― | |
36 Underperform | $51.40M | ― | -295.35% | ― | 184.12% | 31.92% |
* Healthcare Sector Average
Performance Comparison
MESO
Mesoblast
11.60
5.80
100.00%
VERU
Veru
0.58
-0.34
-36.96%
BLUE
Bluebird Bio
4.89
-19.71
-80.12%
FATE
Fate Therapeutics
0.68
-6.24
-90.17%
CYRX
CryoPort
5.44
-12.77
-70.13%
CART
Maplebear
40.02
0.90
2.30%
Mesoblast Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -26.21% | Next Earnings Date: May 28, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook with significant advancements including the FDA approval of RYONCIL, successful fundraising, and promising clinical trial results. However, the company faces some challenges such as non-cash balance sheet impacts and ongoing trial enrollments.Highlights
FDA Approval and Launch of RYONCIL
RYONCIL, a mesenchymal stromal cell therapy, has been FDA approved as the first off-the-shelf therapy for children aged two months and older with steroid-refractory acute GVHD. The product is set to be made available in March.
Successful Private Placement
The company successfully completed a global private placement, raising USD 161 million, increasing the pro forma cash balance to approximately USD 200 million.
Reduction in Operating Cash Spend
Net operating cash spend was USD 20.7 million for the first half of FY 2025, a 22% reduction from the first half of FY 2024.
High Response Rates in Clinical Trials
In Phase 3 trials, RYONCIL delivered high overall response rates of 70% at day 28 for children with severe disease, significantly higher than other therapies.
Potential for Label Expansion
Strategies are in place to expand RYONCIL’s use to include inflammatory bowel disease and adult GVHD, with ongoing trials showing promise.
Lowlights
Non-Cash Adjustments Leading to Loss
Non-cash balance sheet adjustments drove a loss after tax of USD 47.9 million for the half year.
Challenges in Enrollment for Phase III Trials
The company is actively working to increase enrollment rates for the Phase III trial for chronic low back pain, indicating current challenges in participant recruitment.
Dependency on FDA Guidance
The approval pathway for Revascor in ischemic heart failure depends on further FDA meetings to clarify study designs and confirmatory trial requirements.
Company Guidance
In the recent call, Mesoblast provided comprehensive guidance on multiple financial and operational metrics. For the fiscal period ended December 31, 2024, the company reported a cash balance of USD 38 million, with a pro forma cash of approximately USD 200 million following a successful USD 161 million global private placement. Net operating cash spend was USD 20.7 million, marking a 22% reduction from the previous year. The FDA's approval of RYONCIL resulted in a USD 23 million provision reversal, now recognized as inventory on the balance sheet. The company's loss after tax stood at USD 47.9 million, influenced by non-cash balance sheet adjustments post-FDA approval. RYONCIL's wholesale acquisition cost is USD 194,000 per infusion, with a potential addressable market in the U.S. of 375 new pediatric patients annually for steroid-refractory acute GVHD. The launch strategy includes targeting high-volume transplant centers, with a sales force of nine key account managers. For the chronic low back pain trial, the company plans to expand site numbers from 15 to 40, anticipating ramped-up enrollment and a potential U.S. partnership for distribution.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.