NEW YORK, April 29, 2024 (GLOBE NEWSWIRE) -- Mesoblast Limited (Nasdaq:MESO; ASX:MSB), global leader in allogeneic cellular medicines for inflammatory diseases, today provided an activity report for the third quarter ended March 31, 2024.

Mesoblast Chief Executive Silviu Itescu said: “We are very pleased with the positive interactions we had last quarter with the FDA, having received clarity on the path to licensure for our product candidates in pediatric acute graft versus host disease and in ischemic patients with chronic heart failure.”

“Based on the clear responses and guidance from FDA we intend this quarter to resubmit our Biologics License Application (BLA) for approval of remestemcel-L in children with SR-aGVHD,” said Mesoblast CEO Dr. Silviu Itescu. “In addition, FDA informed us that the results from our pivotal study of rexlemestrocel-L in end-stage heart failure patients may support an accelerated approval, and we intend to have a pre-BLA meeting to discuss the data that will be provided and the timing for an accelerated approval filing.”

ACTIVITY REPORT

Graft versus Host Disease – Pediatric and Adult Indications

• United States Food and Drug Administration (FDA) informed Mesoblast after its Type C meeting during the quarter that following additional consideration the available clinical data from its Phase 3 study MSB-GVHD001 appears sufficient to support submission of the proposed Biologics License Application (BLA) for remestemcel-L for treatment of pediatric patients with steroid-refractory acute graft versus host disease (SR-aGVHD).
• Mesoblast intends to file the resubmission this quarter, potentially resulting in an approval for Ryoncil^® (remestemcel-L) in the second half of CY2024.
• Mesoblast will now focus on its original strategy to first gain pediatric approval for RYONCIL, followed by label extension in the larger adult population.

Cardiovascular – Chronic Heart Failure with Reduced Ejection Fraction (HFrEF) in Adults

• FDA informed the Company in formal minutes following the Type B meeting held in February under Mesoblast’s existing Regenerative Medicine Advanced Therapy (RMAT) designation, that it supports an accelerated approval pathway for Revascor^® (rexlemestrocel-L), Mesoblast’s allogeneic mesenchymal precursor cell (MPC) product, in patients with end-stage ischemic heart failure with reduced ejection fraction (HFrEF) and a left ventricular assist device (LVAD).
• In these patients, a single administration of REVASCOR reduced inflammation, strengthened left ventricular function, reduced right ventricular failure, reduced hospitalizations and reduced mortality.
• REVASCOR has also shown the potential to reduce major adverse cardiac events (MACE) such as cardiovascular death, heart attacks and strokes in ischemic HFrEF patients with NYHA class II /III disease and inflammation.
• Mesoblast intends to request a pre-BLA meeting with FDA to discuss data presentation, timing and FDA expectations for an accelerated approval filing in ischemic HFrEF patients with end-stage heart failure.

Cardiovascular - Pediatric Congenital Heart Disease

• During the quarter FDA granted Mesoblast a Rare Pediatric Disease (RPD) Designation for Revascor^® (rexlemestrocel-L) following submission of results from the randomized controlled trial in children with hypoplastic left heart syndrome (HLHS), a potentially life-threatening congenital heart condition.
• On FDA approval of a BLA for REVASCOR for the treatment of HLHS, Mesoblast may be eligible to receive a Priority Review Voucher (PRV) that can be redeemed for any subsequent marketing application or may be sold or transferred to a third party.

Chronic Low Back Pain – Phase 3 Program

• Second Phase 3 trial underway for rexlemestrocel-L in the treatment of chronic low back pain (CLBP) due to inflammatory disc degeneration– a condition affecting at least seven million people in both the US and Europe alone.

FINANCIAL REPORT

Strengthened Balance Sheet

Completed the pro-rata accelerated non-renounceable entitlement offer that was launched on 4 December, 2023 (Entitlement Offer). Together the entitlement offer and institutional placement raised gross proceeds of A$97 million, including A$36.7 million during the quarter on the same terms as the Entitlement Offer. As part of its active approach to efficient balance sheet management, during the quarter Mesoblast reduced debt under its five-year facility, and its minimum cash balance requirement under that facility, by US$10 million. Cash balance at the end of the quarter was A$117.0 million (US$76.4 million).¹

Cost containment strategy on-track

Cost containment strategies and payroll reductions have been enacted by management and the Board enabling continuation of Phase 3 programs for SR-aGVHD and CLBP in the quarter whilst still achieving reductions in net operating cash spend:

• Net operating cash spend of US$11.7 million for the quarter.
• 28% reduction in net operating cash spend from the comparative quarter in FY2023.
• On target to achieve a 23% ($15m) reduction in net operating spend in FY2024 compared to FY2023 which will be partially offset by investment in our commercial and clinical activities for SR-aGVHD and CLBP, respectively.

We will maintain our focus on cutting costs and preserving cash in the remainder of the year whilst we continue to work on corporate and strategic initiatives to access commercial distribution channels, supplement costs of development, and strengthen our balance sheet.

Other

Fees to Non-Executive Directors were nil, consulting payments to Non-Executive Directors were US$77,217 and salary payments to full-time Executive Directors were US$228,769, detailed in Item 6 of the Appendix 4C cash flow report for the quarter.² From 1 August 2023, Non-Executive directors have voluntarily deferred 50% cash payment of their director fees and agreed to receive the remaining 50% of their fees in equity-based incentives and Executive Directors (our Chief Executive and Chief Medical Officers) have voluntarily reduced their base salaries for FY24 by 30% in lieu of accepting equity-based incentives.

A copy of the Appendix 4C – Quarterly Cash Flow Report for the third quarter FY2024 is available on the investor page of the company’s website www.mesoblast.com.

About Mesoblast

Mesoblast is a world leader in developing allogeneic (off-the-shelf) cellular medicines for the treatment of severe and life-threatening inflammatory conditions. The Company has leveraged its proprietary mesenchymal lineage cell therapy technology platform to establish a broad portfolio of late-stage product candidates which respond to severe inflammation by releasing anti-inflammatory factors that counter and modulate multiple effector arms of the immune system, resulting in significant reduction of the damaging inflammatory process.

Mesoblast has a strong and extensive global intellectual property portfolio with protection extending through to at least 2041 in all major markets. The Company’s proprietary manufacturing processes yield industrial-scale, cryopreserved, off-the-shelf, cellular medicines. These cell therapies, with defined pharmaceutical release criteria, are planned to be readily available to patients worldwide.

Mesoblast is developing product candidates for distinct indications based on its remestemcel-L and rexlemestrocel-L allogeneic stromal cell technology platforms. Remestemcel-L is being developed for inflammatory diseases in children and adults including steroid refractory acute graft versus host disease, and biologic-resistant inflammatory bowel disease. Rexlemestrocel-L is being developed for advanced chronic heart failure and chronic low back pain. Two products have been commercialized in Japan and Europe by Mesoblast’s licensees, and the Company has established commercial partnerships in Europe and China for certain Phase 3 assets.

Mesoblast has locations in Australia, the United States and Singapore and is listed on the Australian Securities Exchange (MSB) and on the Nasdaq (MESO). For more information, please see www.mesoblast.com, LinkedIn: Mesoblast Limited and Twitter: @Mesoblast

References / Footnotes

1. Using Reserve Bank of Australia (RBA) published exchange rate from March 31, 2024 of 1A$:0.6532US$.
2. As required by ASX listing rule 4.7 and reported in Item 6 of the Appendix 4C, reported are the aggregated total payments to related parties being Executive Directors and Non-Executive Directors.

Forward-Looking Statements

This press release 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.

Release authorized by the Chief Executive.

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