The Mesoblast Limited (ASX: MSB) share price has enjoyed a bumper week, rising an incredible 18%.
Today alone, the allogeneic cellular medicines company’s shares finished up 6.4% at $2.16.
With no news out of Mesoblast since earlier this month, we take a look into some recent announcements.
How has Mesoblast been performing?
Investors have been snapping up Mesoblast shares since they hit a 52-week low of $1.70 last week.
The price drop came after the company released its third quarter update, in which it revealed a fall in revenue to US$1.9 million. This was down 84% on the prior corresponding period, although that was mainly due to significant one-off milestone revenue a year earlier.
One area in its quarterly scorecard that may concern investors came from its increasing expenses, particularly management and administration costs. Staff expenses came in at $8.1 million compared with $5.7 million during the same period last year.
Mesoblast reported a loss after tax of US$26.5 million for the quarter, compared with a loss of $15.3 million during Q3 FY20.
To absorb growing costs and significant losses, the company successfully completed a private placement, raising US$110 million. Management noted the proceeds will be used to provide financial strength for operational and regulatory initiatives across multiple products.
Despite the poor result, a possible catalyst for the strong gains made by Mesoblast shares in the last 5 trading days is a recent bullish broker note.
Australian investment firm Bell Potter issued a price target of $4.70 for Mesoblast following its Q3 FY21 report. While it may have cut its outlook by 7.8% from its original note, this represents an upside of an astonishing 118% on today’s share price.
Mesoblast share price summary
In the past 12 months, Mesoblast shares have disappointed investors. The company’s share price is down by more than 40% since this time last year, and by 4% year-to-date.
It’s worth noting that, despite this week’s strong gain, Mesoblast shares are some way off their 52-week high of $5.70.
On valuation grounds, Mesoblast has a market capitalisation of around $1.4 billion, with approximately 648 million shares outstanding.