The Mesoblast Ltd (ASX: MSB) share price is looking lively on Thursday following the release of the company's annual results.
Unlike the broader healthcare sector, shares in the cellular medicines developer are climbing in morning trading. At the time of writing, Mesoblast shares are finding their footing at 46.5 cents per share, increasing 2.2% from yesterday's closing price.
Let's dive deeper into the company's latest full-year figures.
Mesoblast share price gains on reduced net loss
Mesoblast remains focused on developing new treatments, with several still in the pipeline. As such, much shareholder attention is on the capital needs of the business.
Keeping this in mind, here are the highlights for the 12 months ending 30 June 2023:
- Revenue down 26.5% year on year to US$7.5 million
- Research and development expenses down 17% to US$27.2 million
- Net cash consumed by operating activities down 37% to US63.3 million
- Net loss after tax of US$81.9 million, narrowing from US$91.4 million
- Cash and cash equivalents of US$71.3 million on 30 June 2023
The above figures suggest Mesoblast maintains more than a year's worth of cash runway.
What else happened in FY23?
During the latest financial year, Mesoblast continued to focus on advancing its pipeline of 'off-the-shelf' medicines for life-threatening inflammatory conditions. This included the resubmission of Remestemcel-L for use in children with steroid-refractory acute graft versus host disease (SR-aGVHD) to the Food and Drug Administration (FDA) in February.
The company conducted two private placements during the financial period to fund these endeavours. The first was in August last year, raising US$45 million via the issuance of 86.7 million ordinary shares to one of its largest shareholders, M&G Investments.
Another capital raise was undertaken in April this year. This time, it raised US$40 million through existing major shareholders in the United States, the United Kingdom, and Australia.
However, the most dramatic move in the Mesoblast share price arrived after the FY2023 financial year. As shown above, shares in the company plunged 57% on 4 August 2023 after the FDA knocked back approval for Mesoblast's Remstemcel-L therapy.
What's next for Mesoblast?
Management is not giving up on its therapies yet. According to today's release, Mesoblast plans to provide the FDA with new clinical trial data in adults to potentially progress its therapy development.
As it stands, the company is in discussions with 'world-leading investigators' at the Blood and Marrow Clinical Trials Network to get these additional trials underway.
Furthermore, costs will be a predominant focus over the next 12 months. In addition to existing reductions, Mesoblast plans to cut costs by a further 23% (US$15 million) in FY24. Part of this will involve a 40% reduction in payroll by February 2024.
Mesoblast share price under the microscope
The past year has seen the S&P/ASX 200 Health Care Index (ASX: XHJ) decline 6.4%. However, the story for the Mesoblast share price has been far more bleak, descending 45.3% in what has been a difficult year.
As a result, Mesoblast now holds a market capitalisation of $374 million.
Interestingly, M&G Investments, formerly Mesoblast's largest shareholder, has been dumping shares over the past month. Since 27 July, M&G has discarded approximately 43 million shares, reducing its stake to 5.47%.
