Mesoblast Clinches FDA Nod for Ryoncil®, Raises A$260M to Fuel Growth

• FDA approval granted for Ryoncil® to treat pediatric steroid-refractory acute graft versus host disease
• A$260 million capital raise completed to support clinical trial expansion and commercialization
• Commercial inventory and distribution network established with Cencora in the U.S.
• Ongoing Phase 3 trial for rexlemestrocel-L in chronic low back pain progressing
• RMAT designation secured for heart failure therapy REVASCOR with promising clinical data

FDA Approval Marks a Milestone for Mesoblast

Mesoblast Limited (ASX: MSB; Nasdaq: MESO) announced a landmark regulatory achievement with the U.S. Food and Drug Administration (FDA) approval of Ryoncil® (remestemcel-L) on December 18, 2024. This approval positions Ryoncil® as the first mesenchymal stromal cell (MSC) therapy authorized for any indication, specifically targeting children aged two months and older suffering from steroid-refractory acute graft versus host disease (SR-aGvHD), a condition with historically high mortality rates.

This regulatory milestone not only validates Mesoblast's pioneering cell therapy platform but also opens a critical commercial pathway in a niche yet life-threatening pediatric indication. The company has proactively manufactured commercial inventory and partnered with Cencora, a specialty pharmaceutical distributor, to establish a robust cryogenic logistics and storage network ensuring efficient delivery to treatment centers across the United States.

Capital Raise to Accelerate Clinical and Commercial Momentum

Supporting its growth ambitions, Mesoblast successfully completed a global private placement raising A$260 million (approximately US$161 million). This infusion of capital is earmarked to expand enrollment sites and accelerate patient recruitment for the ongoing Phase 3 confirmatory trial of rexlemestrocel-L in chronic low back pain (CLBP) due to inflammatory degenerative disc disease (DDD). The trial's progress is pivotal for Mesoblast’s broader strategy to diversify its therapeutic portfolio beyond pediatric indications.

Financial discipline is evident as the company reported an 18% reduction in net operating cash spend to US$10.1 million for the quarter ended December 31, 2024, compared to the prior period. With cash on hand at US$38 million at quarter-end and a pro-forma cash position of approximately US$200 million post capital raise, Mesoblast is well-positioned to fund its near-term clinical and commercial objectives.

Expanding Pipeline and Regulatory Engagements

Beyond Ryoncil®, Mesoblast is advancing rexlemestrocel-L under the FDA’s Regenerative Medicine Advanced Therapy (RMAT) designation for end-stage heart failure. The company plans to engage with the FDA to discuss accelerated approval pathways, leveraging promising data published in the European Journal of Heart Failure that demonstrated improved survival in high-risk ischemic heart failure patients treated with Revascor® (rexlemestrocel-L).

Additionally, the RMAT designation for REVASCOR following positive trial results in children with hypoplastic left heart syndrome underscores Mesoblast’s commitment to addressing severe inflammatory and cardiovascular conditions through its proprietary allogeneic cell therapy platforms.

Operational and Governance Highlights

Mesoblast continues to manage operational costs prudently, with executive and non-executive directors voluntarily reducing cash payments and salaries in favor of equity incentives. The company maintains secured loan facilities totaling US$80 million, with structured amortization schedules aligned to commercial milestones.

With a strong intellectual property portfolio comprising over 1,000 patents and applications extending protection through 2041, Mesoblast safeguards its technological innovations and commercial interests across major global markets.

Looking Ahead

Mesoblast’s recent FDA approval and capital raise mark a transformative phase, setting the stage for commercial launch and further clinical advancements. The company’s ability to execute on its regulatory and commercial strategies will be critical in translating its pioneering cell therapies into sustainable revenue streams and broader patient impact.

Bottom Line?

Mesoblast’s FDA breakthrough and fresh capital position it for a pivotal growth phase, but execution risks remain as clinical trials and commercialization ramp up.

Questions in the middle?

• How quickly will Mesoblast scale Ryoncil® sales and penetrate the pediatric SR-aGvHD market?
• What are the timelines and regulatory hurdles for accelerated approval of rexlemestrocel-L in heart failure?
• How will ongoing clinical trial results for chronic low back pain influence Mesoblast’s valuation and partnership opportunities?