Full Press Release Details
FINANCIAL RESULTS AND OPERATIONAL HIGHLIGHTS FOR THE
THIRD QUARTER ENDED MARCH 31, 2018
Melbourne, Australia; May 31, 2018; and New York, USA, May 30, 2018: Mesoblast Limited (ASX: MSB; Nasdaq: MESO) today announced strong financial results for the nine months ended March 31, 2018 and provided operational highlights for the third quarter ended March 31, 2018.
Key financial results for the nine months ended March 31, 2018
Recent operational highlights and anticipated upcoming milestones
MSC-100-IV for acute Graft Versus Host Disease (aGVHD):
MPC-150-IM for Advanced and End-Stage Heart Failure:
MPC-06-ID for Chronic Low Back Pain:
Continue to access non-dilutive capital for commercialization of MSC-100-IV (remestemcel-L).
Establish U.S., global and regional commercial partnerships for high volume products.
Financial Results for the Three Months Ended March 31, 2018 (third quarter) (in U.S. Dollars)
Revenues were US$1.1 million in the third quarter of FY2018 compared with US$0.9 million in the third quarter of FY2017, an increase of US$0.2 million (19%).
There was an increase of US$11.4 million (116%) in the loss after income tax for the third quarter of FY2018, compared with the third quarter of FY2017.
The main items which impacted the loss after income tax movement were:
The overall increase in loss after income tax also includes movements in other items which did not impact current cash reserves, such as: fair value remeasurement of contingent consideration, and foreign exchange movements within other operating income and expenses.
A non-cash income tax benefit of US$3.4 million was recognized in the third quarter of FY2018 in relation to the net change in deferred tax assets and liabilities recognized on the balance sheet during the period, compared to
US$3.1 million in the third quarter of FY2017.
The net loss attributable to ordinary shareholders was US$21.1 million, or 4.47 cents loss per share, for the third quarter of FY2018, compared with US$9.8 million, or 2.43 cents loss per share, for the third quarter of FY2017.
At March 31, 2018, the Company had cash reserves of US$59.5 million.
In March 2018, Mesoblast established a non-dilutive, four-year credit facility with Hercules Capital for up to US$75 million with US$35.0 million drawn at closing. An additional US$15.0 million may be drawn on or before Q4 CY2018, and a further US$25.0 million may be drawn on or before Q3 CY2019, in each case as certain milestones are met.
Mesoblast retains an equity facility for up to A$120 million/US$90 million, to be used at its discretion over the next 15 months to provide additional funds as required.
Financial Results for the Nine Months Ended March 31, 2018 (the nine months) (in U.S. Dollars)
Revenues were US$15.6 million in the nine months of FY2018 compared with US$1.8 million in the nine months of FY2017, an increase of US$13.8 million.
There was a decrease of US$35.2 million (71%) in the loss after income tax for the nine months of FY2018, compared with the nine months of FY2017.
The main items which impacted the loss after income tax movement were:
The overall decrease in loss after income tax also includes movements in other items which did not impact current cash reserves, such as: fair value remeasurement of contingent consideration, and foreign exchange movements within other operating income and expenses.
A non-cash income tax benefit of US$29.7 million was recognized in the nine months of FY2018 in relation to the net change in deferred tax assets and liabilities recognized on the balance sheet during the period, primarily due to a revaluation of our deferred tax assets and liabilities recognized as a result of changes in tax rates. On December 22, 2017, the United States signed into law the Tax Cuts and Jobs Act (the Tax Act), which changed many aspects of United States corporate income taxation, including a reduction in the corporate income tax rate from 35% to 21%.
A non-cash income tax benefit of US$9.3 million was recognized in the nine months of FY2017 in relation to the net change in deferred tax assets and liabilities recognized on the balance sheet during the period.
The net loss attributable to ordinary shareholders was US$14.5 million, or 3.12 cents loss per share, for the nine months of FY2018, compared with US$49.6 million, or 12.75 cents loss per share, for the nine months of FY2017.
Conference Call Details
There will be a webcast today on the financial results beginning at 6:30 pm ET on Wednesday, May 30, 2018; 8:30 am Thursday, May 31, 2018 AEST.
The live webcast can be accessed via http://webcasting.brrmedia.com/broadcast/5b0b3e055f522f0d08dbbb1c
To access the call only, dial 1 855 881 1339 (U.S.), 1 800 558 698 (toll-free Australia) or +61 2 9007 3187 (outside of the U.S. and Australia). The conference identification code is 461736.
The archived webcast will be available on the Investor page of the Company's website - www.mesoblast.com
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, 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.
For further information, please contact:
| Julie Meldrum | Schond Greenway |
| Corporate Communications | Investor Relations |
| Mesoblast | Mesoblast |
| T: +61 3 9639 6036 | T: +1 212 880 2060 |
| E: julie.meldrum@mesoblast.com | E: schond.greenway@mesoblast.com |
Consolidated Income Statement
| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| (in U.S. dollars, in thousands, except per share amount) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Revenue | 1,070 | 901 | 15,641 | 1,846 | ||||||||||||
| Research & development | (16,798 | ) | (13,928 | ) | (48,388 | ) | (42,975 | ) | ||||||||
| Manufacturing commercialization | (1,709 | ) | (3,830 | ) | (3,387 | ) | (10,915 | ) | ||||||||
| Management and administration | (6,033 | ) | (5,521 | ) | (16,688 | ) | (15,859 | ) | ||||||||
| Fair value remeasurement of contingent consideration | (822 | ) | 9,117 | 7,880 | 7,778 | |||||||||||
| Other operating income and expenses | 152 | 384 | 1,243 | 1,168 | ||||||||||||
| Finance costs | (423 | ) | - | (423 | ) | - | ||||||||||
| Loss before income tax | (24,563 | ) | (12,877 | ) | (44,122 | ) | (58,957 | ) | ||||||||
| Income tax benefit/(expense) | 3,426 | 3,093 | 29,666 | 9,324 | ||||||||||||
| Loss attributable to the owners of Mesoblast Limited | (21,137 | ) | (9,784 | ) | (14,456 | ) | (49,633 | ) | ||||||||
| Losses per share from continuing operations attributable to the ordinary equity holders of the Group: | Cents | Cents | Cents | Cents | ||||||||||||
| Basic - losses per share | (4.47 | ) | (2.43 | ) | (3.12 | ) | (12.75 | ) | ||||||||
| Diluted - losses per share | (4.47 | ) | (2.43 | ) | (3.12 | ) | (12.75 | ) |
Consolidated Statement of Comprehensive Income
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||
| (in U.S. dollars, in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Loss for the year | (21,137 | ) | (9,784 | ) | (14,456 | ) | (49,633 | ) | |||||||||
| Other comprehensive (loss)/income | |||||||||||||||||
| Items that may be reclassified to profit and loss | |||||||||||||||||
| Changes in the fair value of available-for-sale financial assets | 74 | (86 | ) | 141 | (55 | ) | |||||||||||
| Exchange differences on translation of foreign operations | (69 | ) | 942 | (569 | ) | 368 | |||||||||||
| Other comprehensive (loss)/income for the period, net of tax | 5 | 856 | (428 | ) | 313 | ||||||||||||
| Total comprehensive losses attributable to the owners of Mesoblast Limited | (21,132 | ) | (8,928 | ) | (14,884 | ) | (49,320 | ) |
Consolidated Statement of Balance Sheet
| (in U.S. dollars, in thousands) | As of March 31, 2018 | As of June 30, 2017 | ||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash & cash equivalents | 59,539 | 45,761 | ||||||
| Trade & other receivables | 12,074 | 3,743 | ||||||
| Prepayments | 14,456 | 14,105 | ||||||
| Total Current Assets | 86,069 | 63,609 | ||||||
| Non-Current Assets | ||||||||
| Property, plant and equipment | 1,263 | 1,814 | ||||||
| Available-for-sale financial assets | 2,138 | 1,997 | ||||||
| Other non-current assets | 3,386 | 1,916 | ||||||
| Intangible assets | 585,003 | 586,350 | ||||||
| Total Non-Current Assets | 591,790 | 592,077 | ||||||
| Total Assets | 677,859 | 655,686 | ||||||
| Liabilities | ||||||||
| Current Liabilities | ||||||||
| Trade and other payables | 20,475 | 21,805 | ||||||
| Provisions | 4,386 | 14,865 | ||||||
| Total Current Liabilities | 24,861 | 36,670 | ||||||
| Non-Current Liabilities | ||||||||
| Deferred tax liability | 21,100 | 49,293 | ||||||
| Provisions | 44,341 | 52,957 | ||||||
| Borrowings | 31,422 | - | ||||||
| Total Non-Current Liabilities | 96,863 | 102,250 | ||||||
| Total Liabilities | 121,724 | 138,920 | ||||||
| Net Assets | 556,135 | 516,766 | ||||||
| Equity | ||||||||
| Issued Capital | 879,482 | 830,425 | ||||||
| Reserves | 36,011 | 31,243 | ||||||
| (Accumulated losses)/retained earnings | (359,358 | ) | (344,902 | ) | ||||
| Total Equity | 556,135 | 516,766 |
Consolidated Statement of Cash Flows
| Nine months ended March 31, | ||||||||
| (in U.S. dollars, in thousands) | 2018 | 2017 | ||||||
| Cash flows from operating activities | ||||||||
| Commercialization revenue received | 2,529 | 1,012 | ||||||
| Milestone payment received | 6,125 | - | ||||||
| Payments to suppliers and employees (inclusive of goods and services tax) | (63,719 | ) | (73,443 | ) | ||||
| Interest received | 266 | 395 | ||||||
| Income taxes (paid)/refunded | (25 | ) | - | |||||
| Net cash (outflows) in operating activities | (54,824 | ) | (72,036 | ) | ||||
| Cash flows from investing activities | ||||||||
| Payments for contingent consideration | (543 | ) | - | |||||
| Investment in fixed assets | (174 | ) | (315 | ) | ||||
| Rental deposits received | - | 453 | ||||||
| Net cash (outflows)/inflows in investing activities | (717 | ) | 138 | |||||
| Cash flows from financing activities | ||||||||
| Net proceeds from borrowings | 31,704 | - | ||||||
| Payments of transaction costs from borrowings | (40 | ) | - | |||||
| Proceeds from issue of shares | 40,566 | 61,784 | ||||||
| Payments for share issue costs | (2,604 | ) | (1,884 | ) | ||||
| Net cash inflows by financing activities | 69,626 | 59,900 | ||||||
| Net increase/(decrease) in cash and cash equivalents | 14,085 | (11,998 | ) | |||||
| Cash and cash equivalents at beginning of period | 45,761 | 80,937 | ||||||
| FX (losses)/gains on the translation of foreign bank accounts | (307 | ) | 183 | |||||
| Cash and cash equivalents at end of period | 59,539 | 69,122 |