Shares in cellular medicines developer Mesoblast limited (ASX: MSB) were 4% up to $1.53 on Thursday, after the company released its financial results for the nine months to March 31.
Revenue increased to US$16 million from US$2 million in the previous corresponding period, thanks to earnings from two licensees marketing Mesoblast products in Japan and Europe. This helped reduce net cash outflows from operating activities to US$55 million, and slashed losses by 71% to US$14 million.
To finance operations, the company established a four-year credit facility with Hercules Capital for up to US$75 million.
In fact, while clinical trials of product candidates continue – Mesoblast’s treatment for Graft Versus Host Disease may soon enter an accelerated review pathway for commercialization in the USA – the company spent US$17 million in R&D in just the first three months of 2018, with administration expenses of US$6 million.
Negative cash flows are not a novelty for Mesoblast, and contribute to explaining why the stock has fallen 30% in the past year.
Today, the company appointed Josh Muntner as its new chief financial officer. Mr Muntner’s 20 years’ experience in healthcare corporate finance will serve Mesoblast in sourcing funds for its ongoing activities.
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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.