Mesoblast Ltd (ASX: MSB) shares had a tough finish to the week and ended the session 10% lower at $2.18.
Investors were hitting the sell button after the biotechnology company released its FY 2025 results.
Is this an opportunity to buy its shares at an attractive price? Let's see what one broker is saying.
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Results review
Bell Potter has been looking over the company's results and it appears that everything was largely as expected. It said:
Revenues $17.2m inclusive of $11.3m from Ryoncil, all of which was generated in 4Q25. The 14% gross to net discount was in line with guidance and is not expected to fluctuate. Loss at EBIT $62m vs $59m in FY24. The loss at EBITDA + Equity based remuneration estimated $37.4m. NPAT loss inclusive of $22m in non cash charges for liability revaluations was $102m (FY$88m).
The broker also notes that Mesoblast has been busy in the clinic and has a number of trials on the horizon. It adds:
MSB expects to recruit patients to the adult GvHD trial in the current quarter. The study design is now likely to include severely ill patients with a control arm of Jakafi (ruxolitinib) vs Ryoncil +Jakafi. Jakafi will shortly go off patent, hence will become much cheaper. Based on this design the patient pool is much larger than patients refractory to Jakafi.
Also for Ryoncil, trial design is currently under way for Irritable Bowel Disease. This should proceed to an IND and establishment of two clinical trials in CY26 – the first in Crohn's disease, the second in Ulcerative Colitis. Elsewhere recruitment of the back pain trial is approaching completion (n=300) and should be fully recruited by 3Q FY26. The follow up period is 12 months, hence no data before CY2027.
There are also preparations underway for its Biologics License Application (BLA) for heart failure in the works.
This is a big deal given the significant market opportunity that Mesoblast has for this treatment. Bell Potter explains:
In heart failure (HF), preparations continue for submission of the BLA before end CY25 including application for accelerated approval in LVAD patients ahead of a confirmatory phase 3. The company had earlier gained alignment with the FDA on crucial matters of CMC and potency assays. HF is by the largest TAM market.
Mesoblast shares could rocket
According to the note, the broker believes that Mesoblast shares are dirt cheap. Though, it concedes that they are only suitable for investors with a high tolerance for risk.
In light of this, this morning it has reaffirmed its speculative buy rating and $3.50 price target on its shares.
Based on its current share price of $2.18, this implies potential upside of 60% for investors over the next 12 months.
Commenting on its buy recommendation for Mesoblast shares, it said:
Major debt re-finance due in the coming months (gross debt ~$130m). Multiple options available at far more commercial terms relative to the current extortionate rates (from pre revenue environment). We do not expect a further equity raise. Forecast for FY26 revenues remain unchanged. Major catalysts include 1Q26 revenue announcement and lodgement of BLA for Revascor in HF. Valuation $3.50 unchanged.
