Mesoblast Ltd (ASX: MSB) - Pioneering Allogeneic Cellular Therapies.
- Noel Ong
- Jun 4
- 8 min read
An Interesting ASX Biotech Story for your Watchlists
Introduction
Mesoblast Limited (ASX: MSB) is a leading Australian biotechnology company specialising in the development of allogeneic (off-the-shelf) cellular therapies for the treatment of severe and life-threatening inflammatory diseases. Founded in 2004 by CEO Dr. Silviu Itescu, the company has established itself as a global leader in regenerative medicine, with a focus on mesenchymal lineage cells.
As of mid-2025, Mesoblast boasts a market capitalization of approximately A$1.86 billion, reflecting significant investor confidence in its innovative therapies and robust pipeline. The company's year-to-date share price growth of over 425% underscores its remarkable progress and the market's optimism about its future prospects.
Mesoblast Limited - The Art of Allogeneic Cellular Therapies
Mesoblast's core mission is to develop and commercialize allogeneic cellular medicines to treat serious inflammatory conditions with significant unmet medical needs. The company's proprietary technology platform is based on mesenchymal lineage cells, including Mesenchymal Precursor Cells (MPCs) and Mesenchymal Stem Cells (MSCs), which have immunomodulatory and anti-inflammatory properties.
Key Therapeutic Areas
Graft-versus-Host Disease (GVHD): Mesoblast's flagship product, Ryoncil® (remestemcel-L), is an MSC therapy approved by the U.S. Food and Drug Administration (FDA) for the treatment of steroid-refractory acute GVHD in children. This condition is a severe complication following allogeneic bone marrow transplantation, and Ryoncil® offers a novel treatment option for affected paediatric patients.
Chronic Low Back Pain: The company's investigational product, rexlemestrocel-L, is being evaluated in Phase 3 clinical trials for chronic low back pain associated with degenerative disc disease. Early results have shown durable pain reduction lasting at least three years from a single injection, highlighting its potential as a long-term treatment option.
Cardiovascular Diseases: Mesoblast is also developing Revascor®, an MPC therapy aimed at treating advanced chronic heart failure. The therapy has received Regenerative Medicine Advanced Therapy (RMAT) designation from the FDA, facilitating its expedited development and review.
Reasons for Strong Performance in 2025
Figure 1: The share price movement with highlights that have contributed to its growth over the last 12 months.
The impressive market appreciation for Mesoblast is one of the reason that sparked my interest to review this ASX story. We all know that the biotech ASX industry is very similar to the risk-reward ratio of the mineral exploration industry, so this may be something that retail punters may want to look at for several reasons.
To me, the current position of Mesoblast is the reason why retail investors look for small-cap "High-Risk" ASX stories because for the one that turns out to be a multi-bagger, it makes up for those that don't make it. Mesoblast is also now a good one to play the dividend game and have a "safer" option. Pharmaceutical companies are big players in the US market and if Mesoblast end up in that scale, the market capitalisation of AUD1.8B, may be start of something even bigger.
Mesoblast has had a volatile run since its listing in 2004, having come back from the heights of 2020 when the company had a market capitalisation of over AUD $2B.
Mesoblast's impressive share price growth in 2025 can be attributed to several key developments:
1.0 FDA Approval of Ryoncil®
In December 2024, the FDA approved Ryoncil® for the treatment of steroid-refractory acute GVHD in children, making it the first MSC therapy approved in the United States for any indication. This milestone significantly enhanced Mesoblast's credibility and opened up new revenue streams in the U.S. market. The approval was based on robust clinical data demonstrating the therapy's efficacy and safety in paediatric patients.
2.0 Commercial Launch and Market Access
Following FDA approval, Mesoblast successfully launched Ryoncil® in the U.S. market in early 2025. The company secured inclusion in major drug pricing compendia and entered into a National Drug Rebate Agreement with Medicare, expanding access to approximately 40% of the insured paediatric population in the U.S. These strategic moves have facilitated the therapy's adoption and reimbursement, contributing to revenue growth.
3.0 Inclusion in S&P/ASX 200 Index
In March 2025, Mesoblast was added to the S&P/ASX 200 Index, reflecting its growing market capitalization and significance in the Australian biotech sector. This inclusion has increased the company's visibility among institutional investors and index funds, further boosting its share price.
4.0 Positive Analyst Outlook
Analysts have expressed optimism about Mesoblast's future, with some projecting substantial upside potential. For instance, Bell Potter Securities has set a price target of A$4.30, indicating significant growth prospects from current levels. The company's strong pipeline and recent regulatory successes underpin this positive sentiment.
Future Outlook
Mesoblast's future appears promising, driven by its innovative therapies and strategic initiatives:
1.0 Expansion of Ryoncil® Indications
Mesoblast plans to expand Ryoncil®'s indications beyond pediatric GVHD to include adult patients and other inflammatory conditions. The company is preparing for Phase 3 trials in adults with GVHD, a market approximately five times larger than the pediatric segment.
Successful expansion into this market could significantly increase the therapy's revenue potential.
2.0 Advancement of Rexlemestrocel-L and Revascor®
The ongoing development of rexlemestrocel-L for chronic low back pain and Revascor® for heart failure represents significant growth opportunities. Both therapies have shown promising clinical results and have the potential to address large patient populations with unmet medical needs.
Regulatory approvals and successful commercialization of these therapies could further enhance Mesoblast's market position. (Simply Wall St)
3.0 Strategic Partnerships and Global Expansion
Mesoblast is actively seeking strategic partnerships to support the global commercialization of its therapies. Collaborations with established pharmaceutical companies could facilitate market access, distribution, and regulatory approvals in various regions, accelerating the company's growth trajectory.
Financial Performance and Sustainability
While Mesoblast has historically operated at a loss, the commercial launch of Ryoncil® and potential approvals of other therapies are potential revenue drives for the company toward profitability. Analysts forecast significant revenue growth in the coming years, with estimates suggesting a 233% increase in 2025 and a 336% increase in 2026 (Yahoo Finance).
Samso readers must also know that Mesoblast Ltd (ASX: MSB) experienced a significant share price decline from its 2020 highs (Figure 2) due to several key factors:
FDA Rejection of Remestemcel-L in 2020In October 2020, the U.S. Food and Drug Administration (FDA) declined to approve Mesoblast's lead therapy, remestemcel-L (Ryoncil), for treating pediatric steroid-refractory acute graft-versus-host disease (SR-aGVHD). Despite a prior advisory committee vote favoring approval, the FDA requested an additional randomized controlled trial, leading to a nearly 40% drop in Mesoblast's share price that month.
COVID-19 ARDS Trial SetbackIn December 2020, Mesoblast's Phase 3 trial of remestemcel-L for COVID-19-induced acute respiratory distress syndrome (ARDS) was halted early. The Data Safety Monitoring Board recommended cessation after interim analysis indicated the trial was unlikely to meet its primary endpoint of reducing 30-day mortality. This news led to a further 45% decline in the company's share price.
Mixed Results from Heart Failure Trial: Mesoblast's DREAM-HF Phase 3 trial for its heart failure therapy, rexlemestrocel-L (Revascor), failed to meet its primary endpoint of reducing recurrent non-fatal heart failure events. Although some secondary endpoints showed promise, the overall results were insufficient to bolster investor confidence, contributing to continued share price weakness.
Financial Challenges and Capital Raisings: The company faced financial pressures due to ongoing clinical trials and lack of product approvals, leading to significant cash burn. In January 2025, Mesoblast completed a global private placement, raising A$260 million at a discounted share price. The dilution and exclusion of retail investors from this capital raising contributed to a 9% drop in share price upon the announcement.
As they say and I am reminding the Samso faithful's, there is only two things that are considered a sure thing, paying taxes and death.
Concluding Comments from Samso
A company like Mesoblast Ltd is positioned at the forefront of regenerative medicine, offering innovative allogeneic cellular therapies for challenging inflammatory conditions. In business, the first mover advantage coupled with success in your product development is always going to make you the king of the castle.
The market capitalisation of AUD $1.86B for Mesoblast is prove that management and "luck" has been good for shareholders. A YTD growth of over 425% has got to be worthy of some prize to shareholders and all stakeholders in this company (Figure 1).
The company's recent FDA approval and commercial launch of Ryoncil® mark significant milestones, validating its technology platform and opening new revenue streams.
Mesoblast Ltd (ASX: MSB) is a prime example of biotech stories getting it right. The roller coaster ride that is synonymous with ASX biotech companies is well known. The story for Mesoblast can be more clear if we look at its journey since listing on the ASX.
Figure 2: The share price chart for Mesoblast Limited since listing on the ASX in 2004. (source: commsec)
The company is no minor having lived in high market valuation for a good part of the last 5 years but taking a big plunge due to several factors.
Time have passed and a new phase is upon the fortunes of Mesoblast. What that means for the retail investors is the question. Is this going to be a "blue chip" investment for the retail end now or is there more capital gains to be had? The share price journey seen in Figure 2 is one that would give investors something to think about on whether there is another 10 bags left in the stock.
With a robust pipeline, strategic initiatives, and positive market sentiment, Mesoblast may be well-positioned for continued growth and success in the evolving biotech landscape. If the analysts are to be taken seriously, there appear to be more blue sky to reach.
Happy Investing and remember, always DYOR.
References:
DA Approval of Ryoncil® (Remestemcel-L)
FDA Approval: On December 18, 2024, the U.S. Food and Drug Administration (FDA) approved Ryoncil® (remestemcel-L) for the treatment of steroid-refractory acute graft-versus-host disease (SR-aGVHD) in pediatric patients aged two months and older. This marked the first approval of a mesenchymal stromal cell (MSC) therapy in the United States. TradingView
Orphan Drug Exclusivity: The FDA granted Ryoncil® seven years of orphan drug exclusivity for the treatment of SR-aGVHD in children.
📈 Share Price Growth and Market Performance
Share Price Surge: Following the FDA approval of Ryoncil®, Mesoblast's stock experienced a significant surge, reflecting strong investor confidence.
Year-to-Date Growth: Mesoblast's share price experienced significant growth in 2025, driven by advancements in its cellular therapy programs targeting severe inflammatory conditions. Proactiveinvestors UK
🧬 Rexlemestrocel-L for Chronic Low Back Pain
Phase 3 Trial Results: A Phase 3 trial demonstrated that a single injection of rexlemestrocel-L resulted in at least two years of pain reduction in patients with chronic low back pain due to degenerative disc disease. Wikipedia
Durable Pain Reduction: Further follow-up showed that the pain reduction lasted for at least three years, indicating the therapy's potential for long-term relief. Wikipedia
❤️ Revascor® for Heart Failure
RMAT Designation: The FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to Revascor® (rexlemestrocel-L) for the treatment of children with hypoplastic left heart syndrome (HLHS), a severe congenital heart condition.
Clinical Trial Outcomes: In a Phase 2b trial involving patients with end-stage heart failure, Revascor® treatment resulted in a 76% reduction in major gastrointestinal bleeding events and a 65% reduction in hospitalizations.
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