Mesoblast shares tumble on royalty receipt decline
Make us a preferred source
Make us a preferred source on Google
The news: Mesoblast shares dived in morning trade on the ASX after the regenerative medicine company posted lower cash flow from royalty receipts and a reduced cash balance compared to a year earlier.
The numbers: Mesoblast shares were trading 4.5% lower at $0.96 by midday AEST.
The biotech recorded royalty receipts of USD1.1 million ($1.7 million) for the June quarter, down 38.9% compared to the prior corresponding period.
At the end of the period, Mesoblast had a cash balance of USD63 million, compared to USD71.3 million a year earlier.
However, the company noted that it has an additional USD10 million available from an existing facility on US Food and Drug Administration (FDA) approval of its Ryoncil product.
The context: Mesoblast shares soared last week after the FDA accepted its Biologics Licence Application (BLA) resubmission for Ryoncil in the treatment of children that have a potentially deadly rash after receiving a bone marrow transplant.
The ASX- and NYSE-listed company said it will take a "measured approach" to preparing for the commercial launch of Ryoncil and ensure "prudent cash management".
It noted that the successful implementation of its cost containment plan from August 2023, and the re-prioritisation of projects, has enabled the company to reduce cash expenditure whilst making "significant strides forward" on key programs.
What they said: Mesoblast CEO Silviu Itescu said: "We are very pleased with the strong relationship we have built with the FDA across our product pipeline and the positive outcomes over the past six months".
"We are executing on our go-to-market plan to bring Ryoncil to the many children suffering with the devastating disease of acute GVHD [graft vs host disease]," he said.
The source: ASX announcement
