Full Press Release Details
APPENDIX 4C QUARTERLY ACTIVITY REPORT
Mesoblast Operational and Financial Highlights for Quarter Ended June 30, 2022
Melbourne, Australia; July 29 and New York, USA; July 29, 2022: Mesoblast Limited (ASX:MSB; Nasdaq:MESO), global leader in allogeneic cellular medicines for inflammatory diseases, today provided an activity report for the fourth quarter ended June 30, 2022.
Financial highlights
Key updates on remestemcel-L
Biologics License Application (BLA) resubmission to the US Food and Drug Administration (FDA) for the treatment of children with steroid-refractory graft versus host disease (SR-aGVHD)
COVID-19 acute respiratory distress syndrome (ARDS)
Inflammatory Bowel Disease (IBD) - ulcerative colitis (UC) and Crohn's colitis
Key updates on rexlemestrocel-L:
Chronic Heart Failure
Chronic Low Back Pain
Salary payments to full-time Executive Directors were US$337,605 and fees to Non-Executive Directors were US$192,798, detailed in Item 6 of the Appendix 4C cash flow report for the quarter.10
A copy of the Appendix 4C - Quarterly Cash Flow Report for the fourth quarter FY2022 is attached.
Mesoblast is a world leader in developing allogeneic (off-the-shelf) cellular medicines for the treatment of severe and life-threatening inflammatory conditions. The Company has leveraged its proprietary mesenchymal lineage cell therapy technology platform to establish a broad portfolio of late-stage product candidates which respond to severe inflammation by releasing anti-inflammatory factors that counter and modulate multiple effector arms of the immune system, resulting in significant reduction of the damaging inflammatory process.
Mesoblast has a strong and extensive global intellectual property portfolio with protection extending through to at least 2041 in all major markets. The Company's proprietary manufacturing processes yield industrial-scale, cryopreserved, off-the-shelf, cellular medicines. These cell therapies, with defined pharmaceutical release criteria, are planned to be readily available to patients worldwide.
Mesoblast is developing product candidates for distinct indications based on its remestemcel-L and rexlemestrocel-L allogeneic stromal cell technology platforms. Remestemcel-L is being developed for inflammatory diseases in children and adults including steroid refractory acute graft versus host disease, biologic-resistant inflammatory bowel disease, and acute respiratory distress syndrome. Rexlemestrocel-L is in development for advanced chronic heart failure and chronic low back pain. Two products have been commercialized in Japan and Europe by Mesoblast's licensees, and the Company has established commercial partnerships in Europe and China for certain Phase 3 assets
Mesoblast has locations in Australia, the United States and Singapore and is listed on the Australian Securities Exchange (MSB) and on the Nasdaq (MESO). For more information, please see www.mesoblast.com, LinkedIn: Mesoblast Limited and Twitter: @Mesoblast
References / Footnotes
Forward-Looking Statements
This press release includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements should not be read as a guarantee of future performance or results, and actual results may differ from the results anticipated in these forward-looking statements, and the differences may be material and adverse. Forward-looking statements include, but are not limited to, statements about: the initiation, timing, progress and results of Mesoblast's preclinical and clinical studies, and Mesoblast's research and development programs; Mesoblast's ability to advance product candidates into, enroll and successfully complete, clinical studies, including multi-national clinical trials; Mesoblast's ability to advance its manufacturing capabilities; the timing or likelihood of regulatory filings and approvals (including BLA resubmission), manufacturing activities and product marketing activities, if any; the commercialization of Mesoblast's product candidates, if approved; regulatory or public perceptions and market acceptance surrounding the use of stem-cell based therapies; the potential for Mesoblast's product candidates, if any are approved, to be withdrawn from the market due to patient adverse events or deaths; the potential benefits of strategic collaboration agreements and Mesoblast's ability to enter into and maintain established strategic collaborations; Mesoblast's ability to establish and maintain intellectual property on its product candidates and Mesoblast's ability to successfully defend these in cases of alleged infringement; the scope of protection Mesoblast is able to establish and maintain for intellectual property rights covering its product candidates and technology; estimates of Mesoblast's expenses, future revenues, capital requirements and its needs for additional financing; Mesoblast's financial performance; developments relating to Mesoblast's competitors and industry; and the pricing and reimbursement of Mesoblast's product candidates, if approved. You should read this press release together with our risk factors, in our most recently filed reports with the SEC or on our website. Uncertainties and risks that may cause Mesoblast's actual results, performance or achievements to be materially different from those which may be expressed or implied by such statements, and accordingly, you should not place undue reliance on these forward-looking statements. We do not undertake any obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
Release authorized by the Chief Executive.
For more information, please contact:
| Corporate Communications / Investors | Media |
| Paul Hughes | Sumit Media |
| T: +61 3 9639 6036 | Grant Titmus |
| E: investors@mesoblast.com | T: +61 419 388 161 |
| E: grant@sumitmedia.com.au | |
| Rubenstein | |
| Tali Mackay | |
| E: tmackay@rubenstein.com |
Quarterly cash flow report for entities
subject to Listing Rule 4.7B
| Name of entity | ||
| Mesoblast Limited | ||
| ABN | Quarter ended ("current quarter") | |
| 68 109 431 870 | 30 June 2022 |
| Consolidated statement of cash flows | Current quarter $US'000 | Year to date (12 months) $US'000 | |
| 1. | Cash flows from operating activities | ||
| 1.1 | Receipts from customers | ||
| - royalty receipts | 2,011 | 9,980 | |
| 1.2 | Payments for | ||
| (a) research and development | (4,673) | (24,240) | |
| (b) manufacturing commercialization | (2,658) | (11,090) | |
| (c) product manufacturing and operating costs | (2,248) | (13,480) | |
| (d) advertising and marketing | (381) | (1,047) | |
| (e) leased assets | - | - | |
| (f) staff costs | (1,783) | (8,905) | |
| (g) other expenses from ordinary activities (h) other: | (3,530) | (14,203) | |
| - Intellectual property portfolio expenses | (641) | (2,804) | |
| 1.3 | Dividends received (see note 3) | - | - |
| 1.4 | Interest received | 2 | 7 |
| 1.5 | Interest and other costs of finance paid | - | - |
| 1.6 | Income taxes paid | 7 | (24) |
| 1.7 | Government grants and tax incentives | - | 24 |
| 1.8 | Other (provide details if material) | - | - |
| 1.9 | Net cash from / (used in) operating activities | (13,894) | (65,782) |
ASX Listing Rules Appendix 4C (17/07/20)Page 1
+ See chapter 19 of the ASX Listing Rules for defined terms.
Quarterly cash flow report for entities subject to Listing Rule 4.7B
| Consolidated statement of cash flows | Current quarter $US'000 | Year to date (12 months) $US'000 | |
| 2. | Cash flows from investing activities | ||
| 2.1 | Payments to acquire or for: | ||
| (i) entities | - | - | |
| (j) businesses | - | - | |
| (k) property, plant and equipment | (47) | (157) | |
| (l) investments | - | - | |
| (m) intellectual property | - | (75) | |
| (n) other non-current assets | - | - | |
| 2.2 | Proceeds from disposal of: | ||
| (o) entities | - | - | |
| (p) businesses | - | - | |
| (q) property, plant and equipment | - | - | |
| (r) investments | - | - | |
| (s) intellectual property | - | - | |
| (t) other non-current assets | - | - | |
| 2.3 | Cash flows from loans to other entities | - | - |
| 2.4 | Dividends received (see note 3) | - | - |
| 2.5 | Other | - | - |
| 2.6 | Net cash from / (used in) investing activities | (47) | (232) |
| 3. | Cash flows from financing activities | ||
| 3.1 | Proceeds from issues of equity securities (excluding convertible debt securities) | - | - |
| 3.2 | Proceeds from issue of convertible debt securities | - | - |
| 3.3 | Proceeds from exercise of options | - | 209 |
| 3.4 | Transaction costs related to issues of equity securities or convertible debt securities | (6) | (222) |
| 3.5 | Proceeds from borrowings | - | 51,919 |
| Proceeds from issue of warrants | - | 8,081 | |
| 3.6 | Repayment of borrowings | - | (55,458) |
| 3.7 | Transaction costs related to loans and borrowings | (14) | (5,527) |
| Interest and other costs of finance paid | (1,767) | (6,084) |
ASX Listing Rules Appendix 4C (17/07/20)Page 2
+ See chapter 19 of the ASX Listing Rules for defined terms.
Quarterly cash flow report for entities subject to Listing Rule 4.7B
| Consolidated statement of cash flows | Current quarter $US'000 | Year to date (12 months) $US'000 | |
| 3.8 | Dividends paid | - | - |
| 3.9 | Other (payment of lease liability) | (429) | (2,788) |
| 3.10 | Net cash from / (used in) financing activities | (2,216) | (9,870) |
| Change in Accounting Policy The Group routinely reviews the financial statements for opportunities to improve the quality of financial reporting. In November 2021, the Group refinanced its existing senior debt facility with a new US$90.0 million five-year facility provided by funds managed by Oaktree Capital Management, L.P. ("Oaktree") and as a result in the six months ended December 31, 2021, the Group received proceeds from borrowings and repaid the Hercules loan. In connection with the Group refinance, substantial balances related to payment of transaction costs from borrowings and charges on repayment of borrowings were recorded in the Statement of Cash Flows. During the subsequent preparation of the Appendix 4D for the six month period ended December 31, 2021, management revised the accounting policy relating to the classification of the Interest and other costs of finance paid, previously classified within the operating activities of the Statement of Cash Flows. The Group has changed its accounting policy to classify cash flows from interest and other costs of finance paid as a financing activity because it improves the relevance of the cash flows paid from obtaining capital resources. This change in accounting policy also diminishes the mismatch in operating cash flows from the profit and loss and improves the reliability of the operating cash flow balance. This revised accounting policy has been retrospectively applied to this Appendix 4C to classify Interest and other costs of finance paid as a financing activity for the current quarter and year to date. | |||
| 4. | Net increase / (decrease) in cash and cash equivalents for the period | ||
| 4.1 | Cash and cash equivalents at beginning of quarter (April 1, 2022)/beginning of year (July 1, 2021) | 76,760 | 136,881 |
| 4.2 | Net cash from / (used in) operating activities (item 1.9 above) | (13,894) | (65,782) |
| 4.3 | Net cash from / (used in) investing activities (item 2.6 above) | (47) | (232) |
| 4.4 | Net cash from / (used in) financing activities (item 3.10 above) | (2,216) | (9,870) |
| 4.5 | Effect of movement in exchange rates on cash held | (156) | (550) |
| 4.6 | Cash and cash equivalents at end of period | 60,447 | 60,447 |
ASX Listing Rules Appendix 4C (17/07/20)Page 3
+ See chapter 19 of the ASX Listing Rules for defined terms.
Quarterly cash flow report for entities subject to Listing Rule 4.7B
| 5. | Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts | Current quarter $US'000 | Previous quarter $US'000 |
| 5.1 | Bank balances | 60,034 | 76,311 |
| 5.2 | Call deposits | - | - |
| 5.3 | Bank overdrafts | - | - |
| 5.4 | Other (Term deposits) | 413 | 449 |
| 5.5 | Cash and cash equivalents at end of quarter (should equal item 4.6 above) | 60,447 | 76,760 |
| 6. | Payments to related parties of the entity and their associates | Current quarter $US'000 |
| 6.1 | Aggregate amount of payments to related parties and their associates included in item 1 | 530 |
| 6.2 | Aggregate amount of payments to related parties and their associates included in item 2 | - |
| Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments. |
Payments for Non-executive Director fees and Executive Director's salary (for the current quarter) = US$530,403
ASX Listing Rules Appendix 4C (17/07/20)Page 4
+ See chapter 19 of the ASX Listing Rules for defined terms.
Quarterly cash flow report for entities subject to Listing Rule 4.7B
| 7. | Financing facilities Note: the term "facility' includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. | Total facility amount at quarter end $US'000 | Amount drawn at quarter end $US'000 |
| 7.1 | Loan facilities | 130,000* | 90,000* |
| 7.2 | Credit standby arrangements | - | - |
| 7.3 | Other (please specify) | - | - |
| 7.4 | Total financing facilities | 130,000* | 90,000* |
| 7.5 | Unused financing facilities available at quarter end | 40,000* | |
| 7.6 | Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. | ||
| * Loan facility with Oaktree Capital Management, Inc. On November 19, 2021, Mesoblast refinanced its senior debt facility with a new US$90.0 million secured five-year credit facility provided by funds managed by Oaktree Capital Management, L.P. ("Oaktree"). Mesoblast drew the first tranche of US$60.0 million on closing, the remaining $30.0 million is available prior to December 31, 2022, subject to certain milestones. The loan has an initial interest only period of three years, at a fixed rate of 9.75% per annum, after which time 40% of the principal is payable over two years and a final payment due no later than November 2026. Proceeds from the Oaktree facility have been used to discharge Mesoblast's obligations under the Hercules loan. The loan interest rate is fixed and as at June 30, 2022 the interest rate was 9.75%. In the current quarter, 8% interest was paid in cash, while 1.75% interest was not paid in cash, instead it was paid in kind (PIK) and accrued onto the loan balance outstanding. *Loan facility with NovaQuest Capital Management, L.L.C. On June 29, 2018, Mesoblast entered into a Loan and Security Agreement with NovaQuest Capital Management, L.L.C. ("NovaQuest") for a non-dilutive US$40.0 million secured eight-year term loan. Mesoblast drew the first tranche of US$30.0 million of the loan on closing. An additional US$10.0 million from the loan will be drawn on marketing approval of RYONCIL by the United States Food and Drug Administration (FDA). Prior to maturity in July 2026, the loan is only repayable from net sales of RYONCIL in the treatment of pediatric patients who have failed to respond to steroid treatment for acute Graft versus Host Disease (aGvHD), in the United States and other geographies excluding Asia. Interest on the loan will accrue at a rate of 15% per annum with the interest only period lasting 4 years. Interest payments will be deferred until after the first commercial sale. The financing is subordinated to the senior creditor, Oaktree. |
ASX Listing Rules Appendix 4C (17/07/20)Page 5
+ See chapter 19 of the ASX Listing Rules for defined terms.
Quarterly cash flow report for entities subject to Listing Rule 4.7B
| 8. | Estimated cash available for future operating activities | $US'000 |
| 8.1 | Net cash from / (used in) operating activities (item 1.9) | (13,894) |
| 8.2 | Cash and cash equivalents at quarter end (item 4.6) | 60,447 |
| 8.3 | Unused finance facilities available at quarter end (item 7.5) | 40,000* |
| 8.4 | Total available funding (item 8.2 + item 8.3) | 100,447 |
| 8.5 | Estimated quarters of funding available (item 8.4 divided by item 8.1) | 7.2 |
| Note: if the entity has reported positive net operating cash flows in item 1.9, answer item 8.5 as "N/A". Otherwise, a figure for the estimated quarters of funding available must be included in item 8.5. * Under the Oaktree senior debt facility $30.0 million is available prior to December 31, 2022, subject to certain milestones. Under the NovaQuest loan facility, an additional US$10.0 million from the loan will be drawn on marketing approval of RYONCIL by the United States Food and Drug Administration (FDA). | ||
| 8.6 | If item 8.5 is less than 2 quarters, please provide answers to the following questions: | |
| 8.6.1Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? | ||
| Answer: Not applicable | ||
| 8.6.2Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? | ||
| Answer: Not applicable | ||
| 8.6.3Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? | ||
| Answer: Not applicable | ||
| Note: where item 8.5 is less than 2 quarters, all of questions 8.6.1, 8.6.2 and 8.6.3 above must be answered. |
Compliance statement
Date:.......29 July 2022.............................................................................
Authorised by: ......Chief Executive.............................................................................
(Name of body or officer authorising release - see note 4)
ASX Listing Rules Appendix 4C (17/07/20)Page 6
+ See chapter 19 of the ASX Listing Rules for defined terms.
Quarterly cash flow report for entities subject to Listing Rule 4.7B
ASX Listing Rules Appendix 4C (17/07/20)Page 7
+ See chapter 19 of the ASX Listing Rules for defined terms.