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Mesoblast share price edges higher on quarterly update

The Mesoblast Limited (ASX: MSB) share price closed 0.6% higher on the ASX yesterday after the company reported its June 2019 quarterly update.

What were the highlights from Mesoblast’s update?

Mesoblast reported its operational highlights and quarterly cash flow for Q4 2019, headlined by revenues up 54% for the quarter and 37% for the year due to strong TEMCELL HS sales.

Other operational highlights included:

  • Mesoblast initiated a rolling Biologics License Application (BLA) with the United States Food and Drug Administration (FDA) for remestemcel-L in the treatment of paediatric acute graft versus host disease (aGVHD).
  • The FDA has granted Orphan Drug Designation for the use of Revascor for the prevention of post-implantation mucosal bleeding in heart failure patients implanted with a left ventricular assist device (LVAD).
  • In late July, Mesoblast said it had a positive meeting with the FDA to further define the registration pathway for the use of Revascor in the treatment of heart failure in patients with an LVAD, with formal minutes expected in coming weeks.
  • Cash on hand at 30 June was US$50.4 million (A$71.9  million) with additional capital of US$35 million available under existing arrangements with Hercules Capital and NovaQuest Capital Management.
  • The company’s Kentgrove Capital equity facility for up to A$120.0 million  (approx. US$85.0 million), which can be used at Mesoblast’s discretion, has been extended for two years.
  • Mesoblast remains in advanced negotiations with a number of potential commercial partners regarding potential transactions and access to non-dilutive capital.

What about the company’s quarterly numbers?

In its unaudited quarterly cash flow statement, Mesoblast reported milestone receipts of US$26.4 million for FY19 which largely comprised US$20 million from milestones received from establishing its partnership with Tasly Pharmaceutical Group in China.

Net cash used in operating activities came in at US$19.08 million, while 12-month operating cash flow also remained negative at US$57.8 million used during the year.

Overall, I think investors were buoyed by the solid operational rollout from the Aussie regenerative medicine group as the company’s share price edged higher throughout the day.

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Motley Fool contributor Kenneth Hall 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.

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