Mesoblast Reports Financial Results and Operational Highlights for the First Half Ended December 31, 2018
Chief Executive Dr
Corporate Highlights for the Six Months Ended
- After demonstrating strong survival benefits through Day 180, Mesoblast held two successful end-of-phase meetings with the
FDAcovering clinical and manufacturing aspects of the upcoming Biologics License Application (BLA) for remestemcel-L in the US for use in children with steroid-refractory aGVHD.
- The Company now has a meeting scheduled with the
FDAin April 2019and is on track to subsequently initiate a BLA filing for marketing authorization.
- Mesoblast’s Phase 3 trial in chronic heart failure completed patient enrollment, with 566 patients randomized to receive Revascor or placebo. The study, conducted across 55 centers in
North America, will complete when sufficient primary endpoint events have accrued, which is likely to be within 12 months.
- Mesoblast completed its transaction with
Tasly Pharmaceutical Group(Tasly) to establish a strategic cardiovascular partnership in China, and received US$40 millionon closing.
- Mesoblast and Tasly held their first Joint Steering Committee meeting, with a shared objective to initiate a clinical study in
Chinausing similar clinical endpoints and targeting a similar patient population as in Mesoblast’s North American Phase 3 trial. Tasly and Mesoblast will leverage each other’s clinical trial results to support their respective regulatory submissions.
The National Institutes of Health(NIH) sponsored 159-patient trial of Revascor in end-stage heart failure patients with a left ventricular assist device (LVAD) achieved a 76% reduction in major gastrointestinal (GI) bleeding events and a 65% reduction in associated hospitalizations. Under the Regenerative Medicine Advanced Therapy (RMAT) designation for this indication, Mesoblast has received guidance from the FDAthat reduction in GI bleeding and related hospitalizations is a clinically meaningful outcome that could support product registration.
- Mesoblast has expanded its partnership with Japan’s
JCR Pharmaceuticals Co. Ltd.(JCR) for the treatment of wound healing in epidermolysis bullosa (EB). Having been granted Orphan Regenerative Medical Product designation for EB in October, JCR now intends to seek a label extension for TEMCELL®1 HS. Inj. in Japanfor EB beyond its existing approval for the treatment of aGVHD.
- Management has been expanded to build a commercial team to support the Company’s launch plans for remestemcel-L and operational leadership to drive product life cycle management, commercial manufacturing and regulatory interactions.
- The Board of Directors is undergoing a structured succession plan and has brought on two new US-based Directors with proven expertise in product commercial launches, reimbursement and health system economics.
Upcoming Milestones in Second Half FY2019:
- Mesoblast intends to initiate BLA filing for marketing authorization of remestemcel-L following its
FDAmeeting scheduled for April 2019.
- Mesoblast’s partner Tasly is planning to meet with the
National Medical Products Administration of Chinato discuss the regulatory approval pathway for Revascor in China.
- Mesoblast intends to meet with the
FDAto discuss the pathway for approval of Revascor for the reduction in GI bleeding in patients with LVADs.
- All patients in Mesoblast’s Phase 3 trial in MPC-06-ID for chronic lower back pain will complete their 12-month assessment for safety and efficacy.
Key Financial Highlights for First Half FY2019:
- Pro forma cash of
US$92.0 millionat December 31, 2018.
- This includes
US$15.0 millionreceived in January 2019from Hercules Capital, Inc.(Hercules) after having successfully achieved the clinical milestone of reduction in major GI bleeding events and related hospitalizations in the NIH trial of Revascor in end stage heart failure patients with LVADs;
- Additional non-dilutive capital of
US$35.0 millionmay be available under existing arrangements with Hercules and NovaQuest Capital Management, L.L.C.(NovaQuest), subject to certain milestones.
- This includes
- 43% increase in royalty income on sales of TEMCELL for aGVHD in
- Stable revenue of
US$13.5 million, compared with US$14.6 millionin the first half of FY2018.
- Increased investment in commercial manufacturing of
US$8.0 millionin preparation for potential aGVHD approval.
- 50% reduction in net operating cash outflows in the first half of FY2019 to
Detailed Financial Results for the Six Months Ended
- Revenues were
US$13.5 millionfor the first half FY2019, compared with US$14.6 millionfor the first half FY2018, a decrease of US$1.1 millionprimarily due to:
US$10.0 millionmilestone revenue recognized in the first half FY2019 in relation to establishing a partnership with Tasly in China, compared with US$11.8 millionmilestone revenue recognized in the first half FY2018 in relation to the patent license agreement with Takeda Pharmaceutical Company Limited.
US$3.2 millionroyalties and milestones revenue recognized in the first half FY2019 from sales of TEMCELL by our licensee in Japan, JCR, compared with US$2.6 millionin the first half FY2018, an increase of US$0.6 million. Royalty income from TEMCELL increased by 43% for the first half FY2019.
- Research and Development expenses were
US$34.0 millionfor the first half FY2019, compared with US$31.6 millionfor the first half FY2018, an increase of US$2.4 million(8%) as the Company invested in its lead clinical programs.
- Manufacturing expenses were
US$9.7 millionfor the first half FY2019, compared with US$1.7 millionfor the first half FY2018, an increase of US$8.0 milliondue to an increase in commercial manufacturing in preparation for GVHD approval.
- Management and Administration expenses were
US$10.7 millionfor the first half FY2019, compared with US$10.6 millionfor the first half FY2018, an increase of only US$0.1 million(1%).
- Finance Costs of
US$5.1 millionrelated to loan and security agreements entered into with Hercules in March 2018and NovaQuest in June 2018. No interest expense was recognized in the first half FY2018.
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 the first half FY2019 the Company reported a
1TEMCELL® HS Inj. is a registered trademark of
Conference Call Details
There will be a webcast today on the financial results beginning at
The live webcast can be accessed via https://webcasting.boardroom.media/broadcast/5c6107137e5a7b7d6e8941e4
To access the call only, dial 1 855 881 1339 (U.S.), 1 800 558 698 (toll-free
The archived webcast will be available on the Investor page of the Company’s website: www.mesoblast.com
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 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||T: +1 212 880 2060|
|E: [email protected]||E: [email protected]|
Consolidated Income Statement
|Three Months Ended||Six Months Ended|
|December 31,||December 31,|
|(in U.S. dollars, in thousands, except per share amount)||2018||2017||2018||2017|
|Research & development||(15,488||)||(16,222||)||(33,975||)||(31,590||)|
|Management and administration||(5,126||)||(5,643||)||(10,742||)||(10,655||)|
|Fair value remeasurement of contingent consideration||(11||)||(793||)||(634||)||8,702|
|Other operating income and expenses||(827||)||423||(978||)||1,091|
|Loss before income tax||(27,469||)||(9,639||)||(47,678||)||(19,559||)|
|Income tax benefit||2,865||23,342||3,575||26,240|
|(Loss)/profit attributable to the owners of Mesoblast Limited||(24,604||)||13,703||(44,103||)||6,681|
|(Losses)/earnings per share from continuing operations attributable to the ordinary equity holders of the Group:||Cents||Cents||Cents||Cents|
|Basic - (losses)/earnings per share||(5.00||)||2.91||(9.08||)||1.46|
|Diluted - (losses)/earnings per share||(5.00||)||2.91||(9.08||)||1.46|
Consolidated Statement of Comprehensive Income
|Three Months Ended||Six Months Ended|
|December 31,||December 31,|
|(in U.S. dollars, in thousands)||2018||2017||2018||2017|
|(Loss)/profit for the period||(24,604||)||13,703||(44,103||)||6,681|
|Other comprehensive (loss)/income|
|Items that may be reclassified to profit and loss|
|Changes in the fair value of financial assets||108||47||195||67|
|Exchange differences on translation of foreign operations||(160||)||(385||)||(183||)||(500||)|
|Other comprehensive (loss)/income for the period, net of tax||(52||)||(338||)||12||(433||)|
|Total comprehensive (losses)/income attributable to the owners of Mesoblast Limited||(24,656||)||13,365||(44,091||)||6,248|
Consolidated Statement of Balance Sheet
|As of||As of|
|December 31,||June 30,|
|(in U.S. dollars, in thousands)||2018||2018|
|Cash & cash equivalents||77,022||37,763|
|Trade & other receivables||3,934||50,366|
|Total Current Assets||97,801||101,071|
|Property, plant and equipment||871||1,084|
|Financial assets at fair value through other comprehensive income||2,516||2,321|
|Other non-current assets||3,330||3,361|
|Total Non-Current Assets||590,532||591,372|
|Trade and other payables||25,120||18,921|
|Total Current Liabilities||33,809||24,003|
|Deferred tax liability||16,504||20,079|
|Total Non-Current Liabilities||129,967||122,432|
|(Accumulated losses)/retained earnings||(424,295||)||(380,192||)|
Consolidated Statement of Cash Flows
|Six months ended|
|(in U.S. dollars, in thousands)||2018||2017|
|Cash flows from operating activities|
|Commercialization revenue received||2,101||1,080|
|Milestone payment received||26,409||6,125|
|Research and development tax incentive received||1,654||—|
|Payments to suppliers and employees (inclusive of goods and services tax)||(46,186||)||(42,593||)|
|Income taxes (paid)/refunded||(3||)||(25||)|
|Net cash (outflows) in operating activities||(17,515||)||(35,221||)|
|Cash flows from investing activities|
|Investment in fixed assets||(112||)||(137||)|
|Payments for contingent consideration||—||(543||)|
|Net cash (outflows) in investing activities||(112||)||(680||)|
|Cash flows from financing activities|
|Proceeds from borrowings||28,950||—|
|Payments of transaction costs from borrowings||(1,546||)||—|
|Proceeds from issue of shares||30,258||40,532|
|Payments for share issue costs||(607||)||(2,603||)|
|Net cash inflows by financing activities||57,055||37,929|
|Net increase in cash and cash equivalents||39,428||2,028|
|Cash and cash equivalents at beginning of period||37,763||45,761|
|FX (losses) on the translation of foreign bank accounts||(169||)||(403||)|
|Cash and cash equivalents at end of period||77,022||47,386|
Source: Mesoblast Limited