Mesoblast shares extend rally as Bell Potter ups valuation
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The news: Regenerative medicine company Mesoblast rallied for the second straight session, after reporting on Tuesday a 66% jump in gross revenue from its Ryoncil cell therapy in the second quarter.
The numbers: Mesoblast shares were up 10.5% to $2.95 at 11:20 AEDT, having more than doubled over the last 12 months. Its shares ended 3.1% higher on Tuesday.
Bell Potter, which retained its 'buy' recommendation on the stock, hiked its valuation from $3.50 to $4.
The context: Bell Potter analyst John Hester said he expected the December quarter to be the "breakout period" for Mesoblast, after the US Centers for Medicare & Medicaid Services announced a specific Healthcare Common Procedure Coding System J-Code for Ryoncil.
The new J-Code provides a "standardised, clear, permanent, and specific billing pathway" for Ryoncil by Medicaid, Hester said, facilitating reimbursement and broader patient access.
What they said: "The availability of the J-Code represents the removal of one further obstacle to hospital adoption in this complex billing system," Hester said in a note.
"Hospitals in the US may now order the product and be confident of reimbursement provided the use is on label, irrespective of whether the patient is medicate or private."
The source: Bell Potter research
