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The earnings call conveyed strong commercial momentum following the successful Ryoncil launch (USD 49M H1 revenue, 93% gross margin), meaningful market access achievements (coverage for >280M lives, J-code, centers onboarded), robust cash and financing flexibility (USD 130M cash and new USD 125M facility), and compelling randomized data for Revascor and progress on rexlemestrocel-L. Offsetting these positives are sharp increases in R&D and SG&A as the company scales commercialization and advances clinical programs, continued operating losses and notable dependency on a single launched product while other programs mature. Overall, the call emphasized execution progress, regulatory engagement, and a clear path for near-term milestones, with manageable financial and execution risks.
Mesoblast guided full‑year FY2026 Ryoncil net revenues of $110–$120 million (H1 Ryoncil net revenue $49M; total H1 revenue $51.3M) and said operating cash‑flow usage should decline in H2 versus H1 (H1 operating cash use ≈ $30.3M), supported by $130M cash on hand at Dec‑31 and a $125M credit facility (first $75M drawn; $50M tranche available through June 2026) with the subordinated royalty facility to be fully repaid by mid‑2026. H1 results included a 93% gross margin (gross profit excluding amortization ≈ $44.2M), R&D $46.2M, SG&A $28.5M, direct selling costs $7.7M and a net loss of $40.2M (prior year $48M). Commercial traction metrics cited 49 onboarded treatment centers (30 with formulary listings), 64 centers covering 94% of the pediatric BMT population, 13 hospitals on Optum Frontier, payer coverage for >280M lives (Medicaid in all states) and J‑code J3402 effective Oct 1. Clinical and regulatory timelines: chronic low back pain Phase III (300 pts) enrollment expected to finish Mar/Apr 2026 with data and potential BLA in 2027, and a Revascor BLA for LVAD patients is targeted next quarter.
Ryoncil launched April 2025 and drove the period: net product revenues of USD 49.0M in H1 FY26, representing ~95.5% of total revenues (USD 51.3M). Management reports quarter-on-quarter revenue growth since launch.
Reported gross margin of 93% for the period. Management noted gross profit excluding amortization of approximately USD 44.2M.
49 treatment centers onboarded to date; Ryoncil listed on the formulary at 30 centers. Coverage established across payers representing over 280 million lives, Medicaid coverage in all states, and a specific J-code (J3402) effective Oct 1 to streamline billing. 13 hospitals use the Optum Frontier specialty pharmacy to reduce site financial burden.
Company is on track to achieve 20% pediatric market penetration by the end of year 1 post-launch and assumes a 40% peak share in its models for the pediatric population.
USD 130M cash on hand as of Dec 31, 2025, plus a new USD 125M nondilutive credit facility (USD 75M drawn at closing; USD 50M available to draw through June 2026). Facility is lower cost, non-asset-cross-collateralized, and repayable without prepayment penalties.
Net loss of USD 40.2M in H1 FY26, improved from a USD 48.0M loss in the prior year period (approximate 16.3% improvement), with prior-year comparatives impacted by a one-time USD 23M inventory provision reversal.
LVAD II (159 patients, 2:1) and supportive LVAD I showed statistically significant reductions in major bleeding events and related hospitalizations through 6 and 12 months. Company reported ~fivefold reduction in major bleeding events/hospitalizations over 12 months versus control and evidence the treatment mitigates right-heart-failure-related mortality (control HR >7 for death if right-heart hospitalization occurred; treated group showed near abolition of early mortality risk).
Based on randomized controlled data and orphan designation, Mesoblast is moving from seeking accelerated approval to filing for full BLA approval for the LVAD/right heart failure indication; BLA filing expected next quarter.
First Phase III (404 patients) completed with FDA feedback that a 12-month pain reduction endpoint is approvable. A confirmatory Phase III is enrolling 300 patients across ~40 U.S. sites with enrollment expected complete in March/April 2026; data readout and potential BLA filing expected in calendar 2027.
Management emphasized building manufacturing capacity/diversification, cost efficiencies, and commercial manufacturing readiness for both Ryoncil and rexlemestrocel-L to support commercialization and filings (CMC/potency activities underway).
Company projects full-year FY26 Ryoncil net revenues of USD 110M–120M (fiscal year ending June 2026).
Hello, and welcome to the Mesoblast financial results for the half year ended December 31, 2025. An announcement and presentation have been lodged with the ASX and are also available on the Home and Investor pages at www.mesoblast.com. [Operator Instructions] As a reminder, this conference call is being recorded. Before we begin, let me remind you that during today's conference call, the company will be making forward-looking statements that represent the company's intentions, expectations or beliefs concerning future events. These forward-looking statements are qualified by important factors set forth in today's announcement and the company's filings with the SEC, which could cause actual results to differ materially from those in such forward-looking statements. In addition, any forward-looking statements represent the company's views only at the date of this webcast and should not be relied upon as representing the company's views of any subsequent date. The company specifically disclaims any obligations to update such statements. With that, I would like to turn the call over to Paul Hughes.
Thank you. Welcome, everyone, to the Mesoblast financial results call for the period ending 31 December 2025. My name is Paul Hughes. I'm Head of Corporate Finance and Investor Relations. In the room with me today is our CEO, Silviu Itescu; our CFO, Jim O'Brien; and our CCO, Marcelo Santoro. We have a presentation to run through highlighting the financial results and the operations for the period, and then we'll have some time for questions at the end. So now I'll hand over to Silviu...