The Mesoblast limited (ASX: MSB) share price is under pressure on Thursday following the release of its third quarter update.
In early trade, the allogeneic cellular medicines company's shares are down 2.5% to $1.87.
How did Mesoblast perform in the third quarter?
For the three months ended 31 March, Mesoblast reported revenue of US$1.9 million. This was down 84% on the prior corresponding period due to significant one-off milestone revenue a year earlier. This means that year to date revenue now stands at US$5.46 million, down almost 83% on the same period last year.
This ultimately led to Mesoblast reporting a loss after tax of US$26.5 million for the quarter, which brought its financial year to date loss to US$76.75 million.
Fortunately, Mesoblast was able to raise US$110 million via a private placement in March. As a result, it was able to absorb these losses and finished the period with a cash balance of US$158.3 million. Management believes this is sufficient to meet its short-term goals, commitments, and ongoing operations during the next twelve months.
What else happened during the quarter?
Mesoblast was very busy during the quarter with its remestemcel-L therapy. It is seeking to use remestemcel-L to treat steroid-refractory acute graft versus host disease (SR-aGVHD) in children, and COVID-19 ARDS in adults. It is also seeking to gain approval to treat chronic low back pain with rexlemestrocel-L.
In respect to SR-aGVHD in children, Mesoblast continues to be in discussion with the United States Food & Drug Administration (FDA) through a well-established regulatory process. This may include a resubmission with a six-month review with the aim of achieving approval.
As for COVID-19 ARDS in adults, results from the randomised controlled trial of remestemcel-L in ventilator-dependent COVID19 patients with moderate/severe acute respiratory distress syndrome (ARDS) indicated that in the pre-specified population under 65 years old (n=123), those who received remestemcel-L had a significantly reduced mortality through to 60 days.
However, the trial was halted after the third interim analysis and 222 enrolled patients since the 30-day primary endpoint would not be attained. Management notes that in patients under 65 years, the benefit was further increased when remestemcel-L was used with dexamethasone as part of standard of care.
The trial also indicated that the mortality reduction by remestemcel-L in those under 65 years was accompanied by increased days alive off mechanical ventilation and reduced days in hospital
Finally, its rexlemestrocel-L trial in the treatment of chronic low back pain indicated that a single injection of rexlemestrocel-L plus a hyaluronic acid carrier may provide at least two years of pain reduction, with opioid sparing activity in patients using opioids at baseline.
Mesoblast's Chief Executive, Silviu Itescu, commented: "We are pleased with the recent clinical outcomes regarding our lead product candidate remestemcel-L and continue to progress our regulatory discussions with the aim of achieving approval. Our focus and top priority remains on successfully bringing remestemcel-L to children with the devastating complication of steroid-refractory acute graft versus host disease and adults fighting COVID-19 acute respiratory distress syndrome."
