One ASX healthcare share has emerged among the most dramatic movers in the S&P/ASX 200 Index (ASX: XJO).
Over the past 6 months alone, Mesoblast Ltd (ASX: MSB) shares have surged 73% to $2.74 at the time of writing, putting the biotech stock firmly back on investors' radars.
By comparison, the S&P/ASX 200 Healthcare Index (ASX: XHJ) tumbled 22% over the same period.
So, has Mesoblast already peaked or is there more upside ahead?
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Long-awaited inflammatory breakthrough
After years stuck in the wilderness, the ASX healthcare share price has roared back to life. Investors have driven the rally on renewed optimism surrounding the company's lead therapy, remestemcel-L, which targets inflammatory and immune-based diseases.
Mesoblast has spent more than a decade developing a regenerative medicine platform designed to treat severe conditions with limited treatment options. Now, the market believes the company is edging closer to its first major commercial milestone.
Momentum has accelerated as the healthcare stock advances toward a potential US Food and Drug Administration (FDA) approval. A breakthrough could unlock its first meaningful revenue stream. For a company long defined by research spending rather than sales, this would mark a fundamental shift.
FDA decision remains key catalyst
FDA approval represents the single most important hurdle in Mesoblast's investment case. The company has resubmitted clinical data to US regulators, aiming to overcome the regulatory roadblocks that have derailed it in the past.
Each positive signal from the approval process has pushed the ASX 200 healthcare share higher. Momentum traders have piled in, betting that Mesoblast may finally secure the green light it has chased for years.
Risks remain substantial
Despite the renewed enthusiasm, risk still looms large. Mesoblast has burned significant capital over its long development journey, repeatedly tapping markets to fund extended trials and regulatory work.
The company's history of FDA setbacks has also tested investor patience. Even if approval arrives, The ASX healthcare share must still commercialise its therapy, scale sales, and compete in an increasingly crowded cell-therapy landscape.
Broker sentiment turns bullish
Still, brokers appear increasingly confident. The average 12-month price target sits at $4.19, implying potential upside of 53% from current levels.
TradingView data show that all analysts who follow the $3.5 billion healthcare share have a strong buy recommendation.
The brokers are forecasting target prices as high as $5.30 per share. This implies a huge 93% potential upside at the time of writing. The most pessimistic market watcher sees a price target of $3.13, which still points to a possible plus of 14%.
