Mesoblast to raise $50m from top shareholder for product launch
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The news: Biotech company Mesoblast will raise funds from its largest shareholder via convertible notes if it receives US Food and Drug Administration (FDA) approval for its drug candidate Ryoncil.
The numbers: Mesoblast will raise up to USD50 million ($72.7 million) from top shareholder Gregory George via convertible notes following the anticipated decision by the FDA, which is due by 7 January. George, who already owns nearly 16% in the company, will have the option to convert the notes to shares at USD9.06 per American depository receipt (ADR), equivalent to $1.32 a share. The notes will have a tenure of four years and a coupon rate of 5%.
ASX-listed shares of Mesoblast were up 2.2% at $1.15 in early trading.
The context: Mesoblast CEO Silviu Itescu thanked George for ensuring the company is well-capitalised for commercial product launch if it gets the regulatory nod.
In July, the US FDA accepted Mesoblast's Biologics Licence Application (BLA) resubmission for Ryoncil, which is used in the treatment of children that have a potentially deadly rash after receiving a bone marrow transplant.
The company said the proceeds from the raising would be used for hiring of senior positions in the commercial launch team, key pre-launch and post-launch activities, and a targeted sales force.
The source: ASX announcement
