Mesoblast Reports 2019 Full Year Results
Mesoblast Chief Executive Dr
Continued Growth in Revenues from Japan Royalties
The Company is pleased to report continued growth in revenues from royalties on sales of TEMCELL® HS. Inj.1 in
Cash on hand was
In addition, Mesoblast may have access to additional sources of capital, as follows:
- Under its agreements with
Hercules Capital, Inc.and NovaQuest Capital Management, LLC., the Company has up to US$35.0 millionavailable subject to achievement of certain milestones.
- Mesoblast has entered into a Subscription Commitment Letter with its largest institutional shareholder,
M&G Investment Management, for US$15.0 millionin Mesoblast ordinary shares, exercisable by the Company on or before 31 December 2019, subject to customary diligence and with pricing to be agreed at the time Mesoblast gives notice.
- The Company will receive further milestone and royalty payments from its existing strategic partners JCR,
Takeda Pharmaceuticals Company Ltd.and Tasly Pharmaceutical Group.
- Mesoblast remains in advanced negotiations with a number of additional potential commercial partners regarding transactions and access to non-dilutive capital2.
- Mesoblast has extended its fully discretionary equity facility with
Kentgrove Capitalof up to A$120.0 million(approximately US$82.0 million) for the next 24 months.
Graft Versus Host Disease
There are more than 30,000 allogeneic bone marrow transplants performed annually worldwide3, primarily in patients being treated for blood cancers. The most severe forms of the disease, Grades C/D or III/IV, are frequently refractory to steroid therapy and associated with mortality rates as high as 90%4,5.
There are no approved therapies for aGVHD in
In Mesoblast’s Phase 3 trial of 55 children with aGVHD - 89% of whom had Grade C/D disease - treatment with remestemcel-L resulted in a six-month survival of 69%. In addition, achievement of an Overall Response at Day 28, which occurred in 69% of patients, predicted highest survival at Day 100 and Day 180, which was 85% and 79%, respectively. The trial successfully met its primary endpoint of increased Day 28 Overall Response compared with a protocol-defined historical control rate of 45% (p=0.0003). These data are consistent with prior results from an Expanded Access Program in 241 children where remestemcel-L was used as salvage therapy after failure of steroids and other agents.
Remestemcel-L is administered to patients in a series of intravenous infusions. Remestemcel-L has demonstrated immunomodulatory properties to counteract the inflammatory processes that are implicated in aGVHD by down-regulating the production of pro-inflammatory cytokines, increasing production of anti-inflammatory cytokines, and enabling recruitment of naturally occurring anti-inflammatory cells to involved tissues.
Potential United States Market for Remestemcel-L
The product adoption and reimbursement seen in the Japan GVHD market for TEMCELL informs Mesoblast’s
Mesoblast is preparing for potential product launch in
The rolling Biologics License Application (BLA) submission to the
Commercial Activities for Potential Launch in
In line with our expected timelines for potential
Life Cycle Strategy for Remestemcel-L
Mesoblast intends to expand its clinical program into the adult aGVHD segment. In addition, an investigator-initiated study evaluating remestemcel-L in children is planned in
Mesoblast has the right to use all safety and efficacy data generated by JCR in
Chronic Heart Failure
Advanced Heart Failure
In a post-hoc analysis of an earlier Phase 2 trial published in
In Mesoblast’s randomized, placebo-controlled Phase 3 trial, enrollment of 566 patients has been completed across 55 centers in
Revascor was successful in
Currently, approximately 90% of events in this Phase 3 trial have been accrued and validated. Mesoblast expects the trial to accrue all the requisite primary events by the end of CY2019 with readouts planned during the first half of CY2020.
End-stage Heart Failure
In patients implanted with an LVAD, endothelial dysfunction and reduced blood flow caused by severe inflammation result in a compensatory abnormal network of blood vessels in the gastrointestinal tract, with potentially life-threatening bleeding in up to 40% of patients17,18. Mesoblast believes that Revascor may address the severe inflammation that leads to these major bleeding complications.
Key outcomes were:
FDAreiterated that a reduction in major gastrointestinal bleeding events and/or epistaxis, collectively termed major mucosal bleeding events, is an important clinical outcome in patients implanted with an LVAD.
FDAconfirmed that data from the recently completed 159-patient placebo-controlled trial showing that Revascor reduced major mucosal bleeding events can support product marketing authorization through a BLA, with confirmatory clinical trial data.
FDAagreed on a confirmatory Phase 3 trial of Revascor in LVAD patients, with a primary endpoint of reduction in major mucosal bleeding events, and key secondary endpoints demonstrating improvement in various parameters of cardiovascular function.
Revascor is being developed for these patients under existing FDA Regenerative Medicine Advanced Therapy (RMAT) and Orphan Drug designations.
The confirmatory trial is planned to be conducted with the
Chronic Low Back Pain
Approximately 3.2 million patients in
In post-hoc results from an earlier randomized, placebo-controlled Phase 2 trial in 100 patients, data showed that a single intra-discal injection of MPC-06-ID resulted in over a three-fold increase relative to saline controls in successfully achieving a composite endpoint consisting of 50% improvement in low back pain and 15 point improvement in function at both 12 and 24 months with no treatment or surgical interventions at the treated level through 24 months. In this study, 37% of patients treated with MPC-06-ID compared with 10% in the control group achieved this composite endpoint over two years.
This composite endpoint is the primary endpoint in the Phase 3 clinical trial for chronic low back pain which completed enrollment in
Board and Senior Executive Appointments in Line with Commercialization Plans
As Mesoblast transitions to a commercial stage company, there have been two key additions to its Board of Directors and the appointment of a new Chief Medical Officer.
Joseph R. Swedish has been appointed as Mesoblast’s non-executive Chairman and
Mr Swedish most recently served as Chairman, President and CEO of
Mesoblast’s new Chief Medical Officer, Dr
Mesoblast is developing patent-protected product candidates for a range of inflammatory and immune-mediated conditions using a scalable, allogeneic (off-the-shelf) cellular medicine platform technology.
The Company’s manufacturing activities meet stringent criteria set by international regulatory agencies, including the
Mesoblast has proprietary technology that facilitates the increase in yields necessary for the long-term commercial supply of our product candidates, and next generation manufacturing processes using three-dimensional bioreactors to reduce labour and drive down cost of goods.
Mesoblast continues to protect and expand its extensive estate of patent rights and intellectual property with approximately 995 patents and patent applications across 68 patent families. These patents relate principally to compositions of matter, methods of manufacture, and uses/indications of mesenchymal lineage cells.
More specifically, the Company’s patent estate includes issued patent and patent applications in major markets, including, but not limited to,
Among the indication-specific issued or pending patents covering product candidates derived from the Company’s mesenchymal lineage cells are those which are directed to its lead product candidates for aGVHD, advanced heart failure, chronic low back pain, as well as chronic auto-immune conditions such as rheumatoid arthritis. Mesoblast also has issued and pending patents covering other pipeline indications, including diabetic kidney disease, inflammatory bowel disease (e.g. Crohn’s disease), neurologic diseases, eye diseases and additional orthopedic diseases. In addition, the Company has in-licensed patents covering complementary technologies, such as other types of mesenchymal lineage cells, cell surface modification technologies, pay-loading technology and protein and gene technologies, as part of its strategy to expand its targeted disease applications and manage the life cycle of its current lead programs.
Licensing agreements with JCR, Tasly and Takeda highlight the strength of Mesoblast's extensive intellectual property portfolio covering mesenchymal lineage cells. Mesoblast will continue to use its patents to prosecute its commercial rights as they relate to its core strategic product portfolio. When consistent with the Company’s strategic objectives, it may consider providing third parties with commercial access to its patent portfolio.
Detailed Financial Results for the Year Ended
- Revenues were
US$16.7 millionfor FY2019, compared to US$17.3 millionfor FY2018. Revenues comprised:
US$10.0 millionrevenue recognized in FY2019 in relation to establishing a partnership with Tasly in China, compared with US$11.8 millionrevenue recognized in FY2018 in relation to the patent license agreement with Takeda Pharmaceutical Company Limited.
• US$6.0 million royalties and milestone revenues recognized in FY2019 from sales of TEMCELL by JCR compared with
US$5.1 millionin FY2018, an increase of US$0.9 million. Royalty revenue on sales of TEMCELL increased by 37% for FY2019 compared to FY2018.
- Research and Development expenses were
US$59.8 millionfor FY2019, compared to US$65.9 millionfor FY2018. This US$6.1 milliondecrease was due to a reduction in third party costs in our Phase 3 clinical trials.
- Manufacturing expenses were
US$15.4 millionfor FY2019, compared to US$5.5 millionfor FY2018, an increase of US$9.9 millionfor commercial manufacturing investment primarily to support the potential launch of remestemcel-L.
- Management and Administration expenses were
US$21.6 millionfor FY2019, compared to US$21.9 millionfor FY2018, a decrease of US$0.3 million.
- Finance Costs of
US$11.3 millionin interest expenses were recognized for FY2019, of which US$4.6 millionwas paid in cash, compared with US$1.8 millionfor FY2018, in relation to financial agreements with Hercules and NovaQuest.
Additional components of loss after income tax also include movements in other items which did not impact current cash reserves, such as income tax benefits, fair value remeasurement of contingent consideration, remeasurement of borrowing arrangements and foreign exchange movements within other operating income and expenses.
In FY2019, the net loss attributable to ordinary shareholders was
Conference Call Details
There will be a webcast today on the financial results beginning at
To access the call only, dial 1800 558 698 (toll-free
The archived webcast will be available on the Investor page of the Company’s website: www.mesoblast.com
1. TEMCELL® HS Inj. is a registered trademark of
2. Mesoblast does not make any representation or give any assurance that such a partnering transaction will be concluded.
3. Niederwieser D, Baldomero H, Szer J. (2016) Hematopoietic stem cell transplantation activity worldwide in 2012 and a SWOT analysis of the
4. Westin, J., Saliba, RM.,
5. Axt L, Naumann A, Toennies J (2019) Retrospective single center analysis of outcome, risk factors and therapy in steroid refractory graft-versus-host disease after allogeneic hematopoietic cell transplantation. Bone Marrow Transplantation.
7. Westin, J., Saliba, RM.,
8. CIBMTR Current Uses and Outcomes of Hematopoietic Cell Transplantation 2017 Summary. Passweg JR, Baldomero, H (2016) Hematopoietic stem cell transplantation in
9. Risk factors for acute GVHD and survival after hematopoietic cell transplantation - Blood 2012 119:296-307; Madan Jagasia et al.
10. AHA’s 2017 Heart Disease and Stroke Statistics.
11.Phase 3 DREAM-HF Trial of Mesenchymal Precursor Cells in Chronic Heart Failure; A Review of Biological Plausibility and Implementation of Flexible Clinical Trial Design;
12. A Phase II Dose-Escalation Study of Allogeneic Mesenchymal Precursor Cells in Patients with Ischemic or Non-ischemic Heart Failure;
13. Gustafsson F, Rogers JG. Left ventricular assist device therapy in advanced heart failure: patient selection and outcomes.
16. Data on file.
17. Chatterjee A, Feldmann C, Hanke JS (2018);The momentum of HeartMate 3: a novel active magnetically levitated centrifugal left ventricular assist device (LVAD). J Thorac Dis 10 (Suppl 15): S1790-S1793.
18. Mehra, MR Salerno C, Cleveland JC (2018) Health care resources use and cost implications in the MOMENTUM 3 long-term outcome study: a randomized controlled trial of a magnetically levitated cardiac pump in advanced heart failure.
19. Decision Resources: Chronic Pain
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, and ability to access, 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
|For further information, please contact:|
|Julie Meldrum||Schond Greenway|
|Corporate Communications||Investor Relations|
|T: +61 3 9639 6036
E: [email protected]
|T: +1 212 880 2060
E: [email protected]
Consolidated Income Statement
|Three Months Ended
|Year Ended June 30,|
|(in U.S. dollars, in thousands, except per share amount)||2019||2018||2019||2018|
|Research & development||(11,435||)||(17,539||)||(59,815||)||(65,927||)|
|Management and administration||(5,627||)||(5,219||)||(21,625||)||(21,907||)|
|Fair value remeasurement of contingent consideration||(2,912||)||2,661||(6,264||)||10,541|
|Other operating income and expenses||(26||)||69||(1,086||)||1,312|
|Loss before income tax||(23,903||)||(21,855||)||(98,754||)||(65,977||)|
|Income tax benefit||3,177||1,021||8,955||30,687|
|Loss attributable to the owners of Mesoblast Limited||(20,726||)||(20,834||)||(89,799||)||(35,290||)|
|Losses per share from continuing operations attributable to the ordinary equity holders of the Group:||Cents||Cents||Cents||Cents|
|Basic - losses per share||(4.15||)||(4.39||)||(18.16||)||(7.58||)|
|Diluted - losses per share||(4.15||)||(4.39||)||(18.16||)||(7.58||)|
Consolidated Statement of Comprehensive Income
|Three Months Ended
|Year Ended June 30,|
|(in U.S. dollars, in thousands)||2019||2018||2019||2018|
|Loss for the period||(20,726||)||(20,834||)||(89,799||)||(35,290||)|
|Other comprehensive (loss)/income|
|Items that may be reclassified to profit and loss|
|Changes in the fair value of financial assets||(284||)||183||(4||)||324|
|Exchange differences on translation of foreign operations||(33||)||(334||)||(137||)||(903||)|
|Other comprehensive (loss)/income for the period, net of tax||(317||)||(151||)||(141||)||(579||)|
|Total comprehensive losses attributable to the owners of Mesoblast Limited||(21,043||)||(20,985||)||(89,940||)||(35,869||)|
Consolidated Balance Sheet
As of June 30,
|(in U.S. dollars, in thousands)||2019||2018|
|Cash & cash equivalents||50,426||37,763|
|Trade & other receivables||4,060||50,366|
|Total Current Assets||62,522||101,071|
|Property, plant and equipment||826||1,084|
|Financial assets at fair value through other comprehensive income||2,317||2,321|
|Other non-current assets||3,324||3,361|
|Total Non-Current Assets||589,593||591,372|
|Trade and other payables||13,060||18,921|
|Total Current Liabilities||44,331||24,003|
|Deferred tax liability||11,124||20,079|
|Total Non-Current Liabilities||126,732||122,432|
|(Accumulated losses)/retained earnings||(469,991||)||(380,192||)|
Consolidated Statement of Cash Flows
|(in U.S. dollars, in thousands)||2019||2018|
|Cash flows from operating activities|
|Commercialization revenue received||4,359||3,019|
|Milestone payment received||26,409||7,125|
|Research and development tax incentive received||1,654||—|
|Payments to suppliers and employees (inclusive of goods and services tax)||(86,294||)||(84,682||)|
|Interest and other costs of finance paid||(4,641||)||(816||)|
|Income taxes (paid)||(3||)||(25||)|
|Net cash (outflows) in operating activities||(57,790||)||(75,012||)|
|Cash flows from investing activities|
|Investment in fixed assets||(279||)||(201||)|
|Payments for contingent consideration||(721||)||(952||)|
|Rental deposits received||—||—|
|Net cash inflows/(outflows) in investing activities||(1,000||)||(1,153||)|
|Cash flows from financing activities|
|Proceeds from borrowings||43,572||31,704|
|Payments of transaction costs from borrowings||(1,614||)||(392||)|
|Proceeds from issue of shares||30,258||40,566|
|Payments for share issue costs||(608||)||(3,265||)|
|Net cash inflows by financing activities||71,608||68,613|
|Net increase/(decrease) in cash and cash equivalents||12,818||(7,552||)|
|Cash and cash equivalents at beginning of period||37,763||45,761|
|FX gain/(losses) on the translation of foreign bank accounts||(155||)||(446||)|
|Cash and cash equivalents at end of period||50,426||37,763|
Source: Mesoblast Limited