Mesoblast limited's (ASX: MSB) share price is climbing higher again today, adding another 7.4% to trade at $1.665. The share price has risen 11.4% since Wednesday, compared to a 0.8% jump for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
While that might look like a great accomplishment, Mesoblast's shares are still trading well below their recent high levels. Until a fortnight ago, the market valued the shares at $3.41, before the company's capital raising via the NASDAQ failed to impress US investors.
Indeed, the biotechnology company had hoped to raise US$12 per American depository share, or ADS, which is the equivalent to five ordinary shares traded on the ASX. Instead, it received just US$8 per ADS which, when translated into Australian currency, hinted at a valuation of just $2.24 per share. The shares fell to that level initially and have since fallen considerably further still.
One reason for the disappointing US capital raising is likely the recent political backlash to rising drug prices in the country, which has seen the share prices of numerous biotechnology and pharmaceutical groups slashed. There's a high likelihood that this has also hurt the market's sentiment towards newcomers in the sector, including Mesoblast.
Of course, Mesoblast is a risky investment prospect, even at this share price. However, it could also offer decent value for long-term investors who are confident in its ability to successfully commercialise some of its products. Indeed, it will need to do so to make the string of capital raisings initiated by the company in recent years worthwhile.