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Mesoblast (MESO)
:MESO
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Mesoblast
(NASDAQ:MESO)
Rating:42Neutral
Price Target:
$10.50
▼(-3.85%Downside)
Positive Factors
Funding and Financial Support
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
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.
Negative Factors
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.
Pricing Strategy
The announced WAC pricing of $1.55M for Ryoncil is based on health economic analyses suggesting a total health economic benefit in the range of $3.2M-$4.1M, with the opportunity in pediatric SR-aGvHD estimated at ~$600M in the US.
Mesoblast (MESO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.38B
Dividend YieldN/A
Average Volume (3M)210.46K
Price to Earnings (P/E)―
Beta (1Y)1.71
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees73
SectorHealthcare
Sector Strength42
IndustryBiotechnology
Share Statistics
EPS (TTM)N/A
Shares Outstanding127,778,220
10 Day Avg. Volume188,229
30 Day Avg. Volume210,455
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)0.61
Price to Sales (P/S)0.00
P/FCF Ratio-4.59
Enterprise Value/Market Cap4.79
Enterprise Value/Revenue273.24
Enterprise Value/Gross Profit-292.32
Enterprise Value/Ebitda-30.44
Forecast
1Y Price Target
$30.00Price Target Upside174.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
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 through the development and commercialization of its proprietary cellular therapies. The company's revenue model primarily involves the licensing of its technology to pharmaceutical partners, which allows them to develop and distribute Mesoblast's products. Additionally, Mesoblast generates revenue from milestone payments and royalties from these partnerships. The company also aims to bring its products directly to market, which could provide direct sales revenue. Strategic partnerships and collaborations with other pharmaceutical companies significantly contribute to its earnings by enabling the development and distribution of its therapies on a global scale.
Mesoblast Earnings Call Summary
Earnings Call Date:May 28, 2025
(Q2-2025)
| % Change Since: -0.46%|
Next Earnings Date:Aug 27, 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.Q2-2025 Updates
Positive Updates
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.
Negative Updates
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.Mesoblast Financial Statement Overview
Summary
Mesoblast is experiencing significant financial challenges, including declining revenues, negative profit margins, and liquidity issues, which pose substantial risks to financial stability.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 |
| EBITDA | -49.42M | -56.08M | -58.55M | -76.57M | -107.60M | -75.41M |
| Net Income | -103.35M | -87.96M | -81.89M | -91.35M | -98.81M | -77.94M |
Balance Sheet | ||||||
| Total Assets | 653.32M | 669.15M | 669.41M | 662.14M | 744.72M | 733.60M |
| Cash, Cash Equivalents and Short-Term Investments | 38.03M | 62.56M | 70.92M | 60.03M | 136.88M | 129.33M |
| Total Debt | 126.11M | 118.92M | 116.50M | 106.91M | 105.50M | 99.31M |
| Total Liabilities | 192.06M | 188.80M | 167.58M | 165.10M | 163.32M | 184.28M |
| Stockholders Equity | 461.26M | 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
10.92
Price Trends
11.28
Negative
12.89
Negative
12.42
Negative
Market Momentum
-0.19
Positive
46.63
Neutral
34.09
Neutral
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 10.92 is below the 20-day moving average (MA) of 11.29, below the 50-day MA of 11.28, and below the 200-day MA of 12.42, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 46.63 is Neutral, neither overbought nor oversold. The STOCH value of 34.09 is Neutral, 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 (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
60 Neutral | $2.87B | ― | -32.17% | ― | -25.85% | -23.89% | |
51 Neutral | $7.41B | 0.36 | -61.88% | 2.33% | 17.09% | 1.64% | |
51 Neutral | $1.31B | ― | -422.66% | ― | 49.29% | 44.52% | |
50 Neutral | $1.56B | ― | -5.78% | ― | 25.50% | 64.63% | |
43 Neutral | $1.89B | ― | -23.34% | ― | ― | -14.19% | |
42 Neutral | $1.38B | ― | -21.26% | ― | ― | ― | |
39 Underperform | $1.44B | ― | -39.49% | ― | ― | -20.03% |
* Healthcare Sector Average
Performance Comparison
MESO
Mesoblast
10.92
4.14
61.06%
TVTX
Travere Therapeutics
14.77
6.49
78.38%
IRON
Disc Medicine
54.50
8.03
17.28%
KYMR
Kymera Therapeutics
44.12
13.17
42.55%
IMCR
Immunocore Holdings
31.12
-5.31
-14.58%
VERA
Vera Therapeutics
22.65
-13.64
-37.59%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.