This S&P/ASX 200 Index (ASX: XJO) stock has seen sharp volatility over the past year, with the share price swinging between $1.52 and $3.35.
Despite this, Mesoblast Ltd (ASX: MSB) shares are up 15% over the past 6 months, but down 9.9% over the past month. At the time of writing, the ASX 200 healthcare share is trading hands for 2.54% apiece, starting the week with a 3.8% loss.
That has pushed the stock to a two-month low, despite signs of progress with the US Food and Drug Administration (FDA).
So, has Mesoblast already peaked, or is there more upside ahead?
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One step closer to breakthrough
After years in the doldrums, the ASX 200 healthcare stock surged back into favour in 2025. Investors powered the rally on renewed confidence in Mesoblast's lead therapy, remestemcel-L, which targets inflammatory and immune-mediated diseases.
Mesoblast has spent more than a decade building a regenerative medicine platform aimed at severe conditions with few effective treatments. Now, the big bet on Mesoblast is if the ASX 200 stock is closing in on its first major commercial breakthrough.
Reduced opioid use
Mesoblast said on Monday that the US Food and Drug Administration has acknowledged positive results for its lead therapy. According to the release, the FDA indicated that the treatment reduced pain in patients suffering from chronic lower back pain caused by degenerative disc disease.
Regulators also noted that significant reductions in opioid use seen in at least one major trial could potentially feature on the product label. Mesoblast said many patients cut back or stopped opioid use for extended periods after treatment.
History of FDA setbacks
Despite the positive update, the ASX 200 stock fell. The shares have retreated to a two-month low, suggesting technical pressure and profit-taking after a strong rally late last year. Sentiment may also have been dented by the recent sale of about 640,000 shares by Executive Director Dr Eric Rose.
Despite Mesoblast's positive FDA update, risks remain elevated. Mesoblast has consumed significant capital over its lengthy development path, repeatedly returning to markets to fund prolonged trials and regulatory work.
Its history of FDA setbacks has also tested investor patience. Even with approval, the company must still commercialise its therapy, scale sales, and compete in an increasingly crowded cell-therapy market.
Broker sentiment still bullish
Brokers, however, remain upbeat. The average 12-month price target for the ASX 200 stock stands at $4.14, suggesting 63% upside from current levels.
TradingView data shows that all covering analysts rate the stock a strong buy. Their targets range from $5.24, a potential gain of 106%, to $3.09, a possible gain of 21%.
