Why is the Mesoblast share price beating the market today?

The biotech company has been working to cut costs as it continues to progress with its stem cell therapy, remestemcel-L.

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The Mesoblast Ltd (ASX: MSB) share price is enjoying a welcome day in the green today.

At the time of writing on Tuesday, shares in the ASX biotech company are trading for 37 cents apiece, up 1.4%.

That's a solid achievement for the beaten-down stock, especially on a day that sees the All Ordinaries Index (ASX: XAO) down 0.58%.

Here's what ASX investors learned today.

What did the ASX biotech stock report?

The Mesoblast share price is outperforming today after the company reported independent director Jane Bell has been appointed chair of the Mesoblast board Audit and Risk Committee.

Michael Spooner is retiring from that role, a position he held for many years.

Bell, a banking and finance lawyer, joined the Mesoblast board in August 2022. Her 30 years of experience includes funds management, mergers, acquisitions, and divestments.

Commenting on her new appointment Bell said, "My major focus will be to oversee and support management's ongoing implementation of the company's cost containment and cash preservation initiatives."

The company's cost-cutting efforts became increasingly important last month. On 4 August, the company announced that it had not received the anticipated US Food and Drug Administration (FDA) approval for its stem cell therapy, remestemcel-L.

Investors reacted by sending the Mesoblast share price down 56.9% on the day.

Today, investors may be reacting positively to Bell's cost-cutting talk.

According to Bell:

As outlined by Chief Executive Silviu Itescu very recently, the company is targeting a 23% reduction (US$15 million) in annual net operating cash for FY2024 and a 40% annualised reduction in payroll by February 2024, which includes base salaries, short-term incentive payments and contractor fees.

Bell also said she will focus on supporting management "in the parallel pursuit of corporate initiatives to strengthen the balance sheet of the company, including royalty monetization and strategic partnerships".

Mesoblast share price snapshot

The Mesoblast share price has a long way to go before recouping its August drop.

With today's boost factored in, shares in the ASX biotech stock remain down 56% over the past 12 months.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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