Mesoblast Shares Drop 6% as Stem Cell Developer Slides in Risk-Off Trade Despite 44% Jump in Ryoncil Revenue
The cell therapy company's stock declined during a broader market sell-off, even as quarterly revenue rose and cash spending fell sharply.
SYDNEY — Shares of Mesoblast Ltd. fell more than 6% on Friday as investors sold growth stocks during a broad market pullback, despite strong recent sales growth for the company's approved cell therapy.
Mesoblast shares lost 14 cents to close at A$2.03, after trading between A$2.02 and A$2.07. About 2.5 million shares changed hands, leaving the company valued at roughly A$2.6 billion.
The ASX 200 closed 0.5% lower as a global selloff in technology stocks weighed on Asian markets.
The company released no market-sensitive news on Friday.
Growing sales
Mesoblast's latest results showed continued momentum. Net revenue from Ryoncil sales rose 44% to US$28 million in the quarter ended Sept. 30, compared with US$19 million a year earlier.
Cash burn fell sharply. Mesoblast had US$99 million in cash at Sept. 30 and operating cash spend of US$2.1 million for the quarter, an 86% improvement from US$14.9 million a year earlier.
Chief Executive Silviu Itescu struck an upbeat tone. "Our first-quarter results show continued momentum for Ryoncil® (remestemcel-L-rknd) sales," he said.
The September quarter was softer than the previous one, however. Ryoncil net revenue was US$36 million in the June quarter, and US$115 million for the first full year after FDA approval.
The company pointed to seasonal factors. September saw the highest number of new patient starts per month, following expected seasonality from summer recess-related treatment scheduling each July and August.
First-of-its-kind therapy
Ryoncil, for steroid-refractory acute graft-versus-host disease in children 2 months and older, is the first FDA-approved mesenchymal stromal cell therapy.
The company is pursuing a much larger market. A registration trial for adult use has commenced and is enrolling patients at up to 40 U.S. sites. The adult population is about three times the size of the pediatric population.
Board changes
Mesoblast announced this week that director William Burns will retire at the 2026 annual general meeting after 12 years, and reiterated plans to add board members with global commercial biopharmaceutical experience.
The stock is down about 11% over the past year.
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