Mesoblast (ASX:MSB) share price rebounds 15%, what's been happening?

Shares in this biotech are bouncing back today…

Mitchell Lawler

Mitchell stumbled upon the concept of investing when in high school, devotedly urging his parents to put some money into a handful of technology companies with increasingly popular products among his demographic – many of which have gone on to great success. It wouldn’t be until 2017, some five years later, that Mitchell became an investor of his own money. Having studied and worked as a mechanical engineer in the building services industry, Mitchell takes a methodical and analytical approach to evaluating businesses. Rather than relying purely on numbers, Mitchell drills beyond a company’s metaphorical mantle to unearth obscure patterns or competitive advantages that would go otherwise unnoticed. His expertise resides within areas such as software, consumer goods, and building services equipment. However, his quest to find quality companies that set the industry standard and flex some degree of an impenetrable position has no limits – small cap to mega cap, cosmetics to healthcare – if it’s an exceptional business it’s on his radar.

Published March 9, 2022 3:13 pm AEDT

The Mesoblast Limited (ASX: MSB) share price has been regaining some of its recent losses today.

In afternoon trade, shares in the regenerative medicines company are fetching $1.20, up 16.5%. Despite the gain, shareholders are still a distant 52% below Mesoblast's 52-week high of $2.52.

Three scientists wearing white coats and blue gloves dance together in a lab. — Image source: Getty Images

Could the shorts be covering?

While the market is throwing support behind the Mesoblast share price today, the shifting sentiment is not a result of a positive announcement.

In fact, the ASX-listed drug developer hasn't released any news since 25 February. Aside from that release, the only other news to arise is the company's removal from the S&P/ASX 200 Index (ASX: XJO) — which was revealed on Friday.

However, thanks to my Foolish colleague, James, we know that Mesoblast made the top 10 most shorted ASX shares last week. From the ASIC data, the recent weakness in the Mesoblast share price coincided with a 9.8% short interest last week.

This might suggest shorters might be taking some of their profits off the table today after a prolonged downward run in Mesoblast shares.

Between 11 December 2020 and today, the unprofitable biotech has suffered a 74% fall in its share price. Given this, the far majority of short-sellers were likely in profit leading up to today.

How does the Mesoblast share price compare to its peers?

Looking at the company on a year-to-date (YTD) basis, the performance of the Mesoblast share price is roughly in line, if not better in some cases, than its ASX-listed pharmaceutical peers.

Since the year kicked off, Mesoblast shares have fallen 15.2%. For comparison, let's look at the performance of other similar companies.

CSL Limited (ASX: CSL) down 13% YTD
Telix Pharmaceuticals Ltd (ASX: TLX) down 40.8% YTD
Mayne Pharma Group Ltd (ASX: MYX) down 32.3% YTD

Finally, based on the current Mesoblast share price, the company holds a market capitalisation of $772 million.

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