Mesoblast Ltd (ASX: MSB) shares have been on an incredible run over the past 12 months.
So much so, you would be laughing all the way to the bank if you had bought the biotechnology company's shares at the start of 2024.
Let's see what a $1,000 investment in the company's shares would be worth now.
$1,000 invested into Mesoblast shares
At the start of 2024, investors were able to pick up the company's shares for 31 cents.
This means that with a $1,000 investment, you would have ended up owning 3,226 Mesoblast shares.
Today, the stem cell therapy developer's shares are worth significantly more than the start of 2024 and closed yesterday's session at $3.06.
This means that those 3,226 shares have a market value of $9,871.56.
That's a staggering return on investment of approximately $8,871 after just a touch over 12 months.
But how did we get here? Let's dig a little deeper into things.
Why did its shares rocket?
It is worth noting that at the start of 2024, things were looking very uncertain for Mesoblast.
The company had been knocked back multiple times from the US FDA when attempting to get its stem cell therapies approved.
This led to management having to raise funds countless times over the past decade to keep the lights on. But its perseverance paid off, with regulators in the US finally changing their tune and approving its Ryoncil (remestemcel-L) product as the first mesenchymal stromal cell (MSC) therapy in the US in December last year.
Ryoncil is the only MSC therapy approved in the U.S. for any indication, and the only approved therapy for steroid-refractory acute graft versus host disease (SR-aGvHD) in children two months and older. This includes adolescents and teenagers.
SR-aGvHD is a life-threatening condition with high mortality rates. Annually in the United States there are approximately 10,000 patients that undergo an allogeneic bone marrow transplant, 1,500 of whom are children.
This approval has sparked hopes that Mesoblast's other stem cell therapies could soon be approved, putting the company in a position to generate significant revenues in the coming years. Mesoblast's chief executive, Dr. Silviu Itescu, said:
With RYONCIL approval by FDA, Mesoblast has demonstrated the ability to bring the first MSC product to market. We will continue to work closely with FDA to obtain approval of our other late-stage products, including REVASCOR for cardiovascular diseases and rexlemestrocel-L for inflammatory pain indications, as well as expanding the indications for RYONCIL in both children and adults with inflammatory conditions.
Can its shares keep rising?
Bell Potter still sees scope for Mesoblast's shares to keep rising. Its analysts recently put a speculative buy rating and $3.90 price target on them. It said:
The approval of Ryoncil has been transformational for the company with an exciting pipeline of products to follow. We retain our Buy (Spec) rating with valuation increased to $3.90 (from $1.40) owing largely to the de-risking of future revenues.
