The ASX 200 stock in this article could be dirt cheap at current levels.
That's the view of analysts at Bell Potter, who are tipping this stock as a buy to investors with a high tolerance for risk.
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Which ASX 200 stock?
The stock that Bell Potter believes could rocket higher is Mesoblast Ltd (ASX: MSB).
It is a biotechnology company whose lead product is Ryoncil for the treatment of paediatric steroid refractory acute graft versus host disease (SR-aGvHD), which was approved by the FDA in December 2024.
Additional products in development include Revascor, for the treatment of late stage heart failure, and remestemcel-L for chronic lower back pain.
What is the broker saying?
Bell Potter notes that the ASX 200 stock updated the market on its plans for the Revascor product when releasing its half-year results. It said:
MSB updated the market on plans for submission of the biological license application (BLA) for Revascor. The initial BLA will include treatment of Right Side Heart Failure associated with ischemic LVAD patients. The company has pivoted to a full application for this orphan indication rather than an accelerated approval. We view this as a cunning plan to a) capitalise on the earnings potential of Ryoncil and b) entice a partner for Revascor. A single approval will massively de-risk this asset for a partner, who could then pursue a label expansion in the much larger class II/III heart failure indication with a single Phase 3 confirmatory study.
It was also pleased with its guidance for FY 2026 and its expectation for its cash burn to reduce. The broker explains:
Guidance is for FY26 net revenue from Ryoncil sales of $110m-$120m implying 2H26 revenues of $61m – $71m. We expect the 2H26 run rate on opex (excluding non-cash items) will remain at ~$70m – $75m. Accordingly, it is reasonable to expect 2H26 EBITDA at close to breakeven.
The major driver for the 2H26 revenue guidance is the now mature reimbursement coverage for Ryoncil. MSB expects to achieve 20% market penetration in paediatric SR aGvHD by 4Q26 with a longer term goal of 40%. In the absence of any other effective treatment we believe this is a low bar. 1H26 cash burn $30.3m with closing cash $130m. Cash burn is expected to reduce by virtue of the expanding revenue base.
Shares tipped to double
According to the note, the broker has retained its speculative buy rating and $4.45 price target on Mesoblast's shares.
Based on its current share price, this implies potential upside of approximately 100% over the next 12 months.
Commenting on its buy recommendation, Bell Potter concludes:
The launch of Ryoncil has been a stunning success. Next major catalysts include 3Q26 revenues (mid March), completion of enrolment for the chronic lower back pain trial by April and submission of the BLA for Revascor in the June quarter. FY26 NPAT amended to -$62m from -$24m. Valuation is unchanged at $4.45. Retain Buy (Speculative).
