If you invested $6,000 in Mesoblast shares a month ago you'd have $15,636 now!

Mesoblast shares have been on a tear this past month. But why?

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Mesoblast Ltd (ASX: MSB) shares are at it again today.

And by 'it', I mean racing higher.

Shares in the ASX biotech company closed yesterday trading for 79.5 cents. In afternoon trade on Tuesday, shares are swapping hands for 86 cents apiece, up 8.2%.

While that's a very tidy intraday gain, it pales in comparison to the 160.6% gains delivered by Mesoblast shares over the past month.

That's right.

One month ago today, you could have snapped up the stock for 33 cents a share.

Meaning a $6,000 investment last month would now be worth a whopping $15,636.

Here's what's been going right for the company.

What's sending Mesoblast shares rocketing?

The big moves higher for Mesoblast shares really commenced on 26 March.

That day saw the ASX biotech stock gain 45.5%, ending the day trading for 48 cents a share.

Shares gained 3.1% the next day and another 12.1% on Thursday 28 March, before the ASX closed for the four-day Easter holiday.

Apparently investor enthusiasm only increased over the holiday break, with Mesoblast shares soaring an eye-watering 71.2% on 2 April to finish the day at 95 cents.

Investors began sending the biotech stock soaring following promising news from the US Food and Drug Administration (FDA) about the company's remestemcel-L treatment.

Mesoblast is developing remestemcel-L to treat inflammatory diseases including steroid-refractory acute graft versus host disease and biologic-resistant inflammatory bowel disease in children and adults.

On 26 March the FDA said that after examining additional clinical data from Mesoblast's phase 3 study, there appeared to be sufficient results to support the resubmission of the company's proposed Biologics License Application (BLA) for remestemcel-L.

Mesoblast CEO Silviu Itescu said at the time, "The responses and guidance from FDA are clear and provide us with a high level of confidence to refile our BLA for remestemcel-L in children with SR-aGVHD."

Mesoblast shares look to be getting ongoing support, as the company said it plans to file the resubmission in the upcoming quarter.

Now what?

After soaring 161% in a month, can Mesoblast shares keep delivering?

According to the analysts at Bell Potter, very much so.

Bell Potter has a 'speculative buy' rating on the ASX biotech stock.

And on 5 April, the broker increased its target price to $1.40 from its previous target of 58 cents.

That's some 63% above the current Mesoblast share price.

According to Bell Potter:

Our best estimate for approval of Remestemcel is mid-August 2024. The planned adult study in GvHD has for the moment been postponed pending the outcome of the resubmitted BLA.

 Valuation is increased from $0.58 to $1.40 reflecting significant changes to revenue forecasts bought about by renewed confidence for a prospective approval for Remestemcel in Paediatric GvHD later this year.

A first approval may represent a gateway to a series of label expansions in the ensuing period as reflected in the share price movement in recent days.

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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