MESOBLAST PROVIDES STRATEGIC UPDATE AND REPORTS ON FIRST QUARTER FINANCIAL RESULTS Materially Strengthened Cash Reserves First Royalties From TEMCELL Product Sales Expected In Q1 2016 Resources Prioritized On Tier 1 Prod

MESOBLAST PROVIDES STRATEGIC UPDATE AND REPORTS ON FIRST QUARTER FINANCIAL RESULTS

Materially Strengthened Cash Reserves

First Royalties From TEMCELL Product Sales Expected In Q1 2016

Resources Prioritized On Tier 1 Product Candidates

Cash Managed To Extend Runway And Achieve Tier 1 Value Inflexion Points

Major Focus Is FDA Filing For Our First US Product Approval In Acute Graft Versus Host Disease

Melbourne, Australia; and New York, USA; 16 December 2015: Mesoblast Limited (ASX: MSB; Nasdaq: MESO) today reported first quarter 2016 results

for the three months ended 30 September 2015 and provided a corporate update. At 30 September 2015, the Company had cash reserves of $77.8 million. This was further augmented by $63.5 million net proceeds raised in a public financing in

We are entering 2016 with a clear strategy, strong balance sheet, and focus on cost-effective delivery of our tier 1 product

candidates, said Silviu Itescu, CEO of Mesoblast.

We have materially strengthened our cash position, and at the same time implemented tight

fiscal control that will result in a reduction of approximately 20-25% of quarterly operating cash burn in comparison with the last 2 quarters (Q1 FY2016 / Q4 FY2015).

As a result, we have sufficient runway to deliver on important value inflexion points for our heart failure, back pain and rheumatoid arthritis

programs, and to file with the FDA for approval of our pediatric graft versus host disease product candidate.

Mesoblast s visibility and

liquidity will increase in the largest market for biotech companies as a result of our US listing.

In addition, we intend to conclude additional

and appropriate strategic partnerships, Itescu said.

Financial Highlights

As of 30 September 2015, the Company had cash and cash equivalents of $77.8 million. A further net $63.5 million was raised as a result of the recent US

listing and financing.

Loss after income tax was reduced by 15% ($2.3 million): $13.2 million for the three months ended 30 September 2015 compared

with $15.5 million for the three months ended 30 September 2014. This included 20% ($1.4 million) reduction in management and administration costs and 14% ($1.8 million) lower expenditure in research and development.

Upcoming Milestones During The Next 12 Months

Mesoblast expects to make significant advances in the next 12 months towards commercialization of its late stage, Tier 1 product candidates.

Financial Results for the Three Months Ended 30 September 2015

Revenues were $7.5 million for the three months ended 30 September 2015, compared with $7.0 million in the same period in 2014, an increase of $0.5

million. The Company recorded $3.5 million in milestone revenue in the three months ended 30 September 2015. In the same period in 2014, Mesoblast received milestone revenue of $2.0 million.

Commercialization revenue of $3.8 million in the three months ended 30 September 2015 was unchanged compared

with the three months ended 30 September 2014.

Interest revenue decreased $1.0 million in the three months ended 30 September 2015 when

compared to the same period in 2014 as a result of decreased cash reserves and by the Company retaining a higher proportion of cash reserves in US$ compared with A$ in the three months ended 30 September 2015, when compared with the three

months ended 30 September 2014.

Research and development expenses were $11.1 million for the three months ended 30 September 2015, compared

with $12.9 million for the three months ended 30 September 2014, a decrease of $1.8 million. This decrease in research and development expenses reflects a reduction in expenditures in our Tier 2 products and product support costs.

Manufacturing commercialization expenses, which consist of fees paid to contract manufacturing organizations and laboratory supplies used in manufacturing

commercialization of our mesenchymal lineage cell product candidates, increased by $0.3 million for the three months ended 30 September 2015 compared to the three months ended 30 September 2014. This rise was due to an increase in the

number of production runs to meet the clinical supply demands of our Tier 1 products. The manufacturing program continues to represent a significant commitment by the Company.

Management and administration expenses were $5.5 million for the three months ended 30 September 2015, compared with $6.9 million for the three months

ended 30 September 2014, a decrease of 20% or $1.4 million. The decrease was driven by management restraining such costs and benefits from exchange rate fluctuations as the US$ strengthened.

Conference Call Details

Mesoblast will host a conference

call beginning at 5:00pm Eastern Time on Wednesday 16 December/ 9:00 am Australian Eastern Daylight Time on Thursday 17 December. To access the call, dial 855-298-3404 (toll-free US), 1800-801-825 (toll-free Australia) or +1 631-514-2526 (outside of

the US). The passcode is 6205376. A live webcast will be available through http://investorsmedia.mesoblast.com/phoenix.zhtml?c=187006&p=irol-calendar. The conference call will be accompanied by a slide presentation. The archived webcast

will be available in the Events and Presentations section of the Company s website.

Mesoblast Limited (ASX: MSB; Nasdaq: MESO) is a global leader in cell-based medicines. The Company has leveraged its proprietary technology platform, which is

based on specialized cells known as mesenchymal lineage adult stem cells, to establish a broad portfolio of late-stage product candidates. Mesoblast s allogeneic, off-the-shelf cell product candidates target advanced stages of

diseases where there are highly unmet medical needs, including cardiovascular conditions, orthopedic disorders, immunologic and inflammatory disorders and oncology/hematology conditions.

Forward Looking Statements

This press release contains

forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on estimates and information available to us at the time of this press release and are not

guarantees of future performance. Statements in this release involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or

implied by such forward-looking statements. All

statements other than statements of historical fact could be deemed forward-looking statements, including, but not limited to: the initiation, timing, progress and results of our preclinical and

clinical studies, and our research and development programs; our ability to advance product candidates into, enroll and successfully complete, clinical studies, including multi-national clinical trials; our ability to advance our manufacturing

capabilities; the timing or likelihood of regulatory filings and approvals, manufacturing activities and product marketing activities, if any; the commercialization of our product candidates, if approved; regulatory or public perceptions and market

acceptance surrounding the use of stem-cell based therapies; the potential for our 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 our ability to enter into and maintain established strategic collaborations; our ability to establish and maintain intellectual property on our product candidates and our ability to successfully defend these in cases of alleged

infringement; the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology; estimates of our expenses, future revenues, capital requirements and our needs for

additional financing; our financial performance; developments relating to our competitors and our industry; and the pricing and reimbursement of our product candidates, if approved.

Additional risks and uncertainties that could affect Mesoblast s financial results are included under the captions Risk Factors and

Management s Discussion and Analysis of Financial Condition and Results of Operations, in the Mesoblast s most recent filings with the SEC, which are available on Mesoblast s website at http://www.mesoblast.com in the

Investors and Media section and on the SEC s website at www.sec.gov. Additional information will also be set forth in other filings that the Company makes with the SEC from time to time. All forward-looking statements in this press release are

based on information available to the Company as of the date hereof, and Mesoblast does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they

For further information, please contact:

Head, Investor Relations

E: michael.schuster@mesoblast.com

Global Head of Corporate Communications

E: julie.meldrum@mesoblast.com

Consolidated Income Statement

Due to recent developments in the business, including listing on the NASDAQ and changing our presentation currency from AUD to

USD a wider review was triggered on the presentation of our recently completed financial results. The Company therefore performed a benchmarking study against other seasoned filers to understand best practice in presenting financial information to

the users of the financial statements.

The impact of this analysis was to collapse Other Income with Other Expenses into one line item Other

operating income and expenses and present all fair value measurements of contingent consideration within one line item Fair value remeasurement of contingent consideration within the Consolidated Income Statement.

Consolidated Balance Sheet