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20-F
MESOBLAST LTD filed this Form 20-F on 08/31/2018
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Commercialization revenue was $3.6 million in the year ended June 30, 2018, an increase of $2.2 million as compared with $1.4 million in the year ended June 30, 2017. This $2.2 million increase in commercialization revenue is from royalty income earned on sales of TEMCELL in Japan by our licensee JCR, with $3.6 million of royalty revenue recognized in the year ended June 30, 2018 compared with $1.4 million of royalty revenue recognized in the year ended June 30, 2017.

 

The $0.1 million decrease in interest revenue from the year ended June 30, 2018 compared with the year ended June 30, 2017 was primarily driven by us retaining higher cash reserves in the year ended June 30, 2017, when compared with the year ended June 30, 2018.

Research and development

Research and development expenses were $65.9 million for the year ended June 30, 2018, compared with $58.9 million for the year ended June 30, 2017, an increase of $7.0 million.  The $7.0 million increase in research and development expenses primarily reflects an increase in expenditures on our clinical program for MPC-150-IM.

 

 

 

 

Year ended

June 30,

 

 

 

 

 

 

 

(in U.S. dollars, in thousands)

 

2018

 

 

2017

 

 

$ Change

 

 

% Change

Research and development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third party costs

 

$

44,192

 

 

$

37,249

 

 

 

6,943

 

 

19%

Product support costs

 

 

16,861

 

 

 

17,122

 

 

 

(261

)

 

(2%)

Intellectual property support costs

 

 

3,258

 

 

 

3,208

 

 

 

50

 

 

2%

Amortization of current marketed products

 

 

1,616

 

 

 

1,335

 

 

 

281

 

 

21%

Research and development

 

$

65,927

 

 

$

58,914

 

 

 

7,013

 

 

12%

 

Third party costs, which consist of all external expenditure on our research and development programs, increased by $6.9 million in the year ended June 30, 2018 compared with the year ended June 30, 2017.

 

Within this $6.9 million increase, there was a $12.4 million increase in third party costs for the advancement of our Tier 1 products due to clinical advancement during the period for the year ended June 30, 2018 compared with the year ended June 30, 2017. In the year ended June 30, 2018 we incurred costs on our MPC-150-IM (CHF), MPC-06-ID (CLBP), MSC-100-IV (aGVHD) and MPC-300-IV (inflammatory conditions) Tier 1 products.  The increase in Tier 1 third party costs were offset by a $5.5 million decrease in third party costs for our Tier 2 and pipeline products for the year ended June 30, 2018 compared with the year ended June 30, 2017 as we prioritized our funds towards Tier 1 products.

 

Product support costs, which consist primarily of salaries and related overhead expenses for personnel in research and development functions, have decreased by $0.2 million for the year ended June 30, 2018 compared with the year ended June 30, 2017.  In the year ended June 30, 2018, operational streamlining initiatives from the June 2016 strategic review were maintained resulting in full time equivalents reducing by 4.3 (9%) from 48.4 for the year ended June 30, 2017 to 44.1 for the year ended June 30, 2018. This led to cost savings of $0.9 million across salaries and associated costs and $0.1 million in consulting expenses, for the year ended June 30, 2018 compared with the year ended June 30, 2017. The cost savings of $1.0 million in the year ended June 30, 2018 were offset by an increase of $0.8 million in share based payment expenses in the year ended June 30, 2018 compared with the year ended June 30, 2017.  

 

Also included in research and development expenses are intellectual property support costs, which consist of payments to our patent attorneys to progress patent applications and all costs of renewing our granted patents. These costs remained consistent in the year ended June 30, 2018 compared with the year ended June 30, 2017.

 

Amortization of current marketed products increased by $0.3 million from $1.3 million for the year ended June 30, 2017 to $1.6 million for the year ended June 30, 2018.

 

70

 



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