Mesoblast Stock Jumps 17% on Nasdaq as Ryoncil Sales Climb 44% and Cash Burn Collapses in Quarterly Update

Mesoblast shares jumped more than 17% on the Nasdaq in early trading Thursday. U.S. investors joined a rally in Australia after the cell therapy company reported strong growth in sales of its flagship drug Ryoncil and a sharp drop in cash spending.

The Nasdaq-listed shares rose $2.29, or 17.1%, to $15.68, lifting Mesoblast's market value to about $2 billion.

Earlier Thursday, the company's shares surged 23.4% to A$2.32 on the Australian Securities Exchange, making it the best performer on the Australian market.

Ryoncil gains momentum

Mesoblast said net revenue from Ryoncil rose 44% to $28 million in the quarter ended Sept. 30.

Ryoncil is approved in the United States to treat steroid-refractory acute graft-versus-host disease in children. The condition is a potentially life-threatening complication of bone marrow transplants.

According to the company, September brought the highest number of new patients starting Ryoncil in any month so far. That followed a seasonal slowdown in July and August, when fewer patients typically begin treatment.

Cash burn falls sharply

Investors also focused on the company's improving finances.

Net operational cash spending fell 86% to $2.1 million for the quarter, down from $14.9 million a year earlier. Mesoblast ended September with about $99 million in cash.

The much smaller outflow suggests Ryoncil revenue now covers most of the company's operating costs, a major change for a business that spent years developing its stem cell platform before getting a commercial product approved.

Key quarterly figures:

Ryoncil net revenue: $28 million, up 44% Net operational cash spend: $2.1 million, down 86% Cash on hand: about $99 million New patient starts: record month in September Adult trial sites: up to 40 planned across the U.S.

Expanding to adults

Mesoblast has started a registration trial to expand Ryoncil's use to adults with the same condition.

The company expects to activate up to 40 trial sites across the United States this year. Those sites would cover about 60% of the estimated 8,500 adults in the U.S. who receive donor bone marrow transplants each year.

Approval for adults would greatly expand Ryoncil's market beyond the relatively small pediatric population.

Pipeline progress

Mesoblast also reported progress on rexlemestrocel-L, its second major product candidate.

The company said it had completed treatment of all 350 patients in a Phase 3 trial of the therapy for chronic low back pain caused by degenerative disc disease.

It also reported a positive meeting with the U.S. Food and Drug Administration about its filing approach for rexlemestrocel-L in patients with end-stage heart failure who have a left ventricular assist device implanted. According to a Reuters-linked market summary, the FDA confirmed that a biologics license application for the therapy may proceed.

Analysts bullish

Analysts remain upbeat on the company. According to TradingView data cited by The Motley Fool Australia, all seven analysts covering the ASX-listed shares rate the stock a strong buy, with an average price target of A$4.33. That is nearly double Thursday's closing price in Sydney.

Not all forecasts were met. Some pre-result estimates had expected higher Ryoncil sales, and at least one broker has trimmed its fiscal 2027 revenue forecast while keeping a buy rating.

Investors on both sides of the Pacific appeared to focus instead on the trend in new patient starts and the sharp improvement in cash flow.

Long road for investors

Despite Thursday's surge, Mesoblast's Nasdaq-listed shares are still down about 18.5% over the past 52 weeks. Before Thursday's gain they were trading near the bottom of their 52-week range of $11.89 to $21.50.

The company has faced a long and difficult path to approval. Ryoncil won FDA approval only after earlier rejections, which weighed heavily on investor confidence.

What's next

Investors will watch whether Ryoncil's patient growth continues in the December quarter, how quickly adult trial sites open and when Mesoblast files with the FDA for rexlemestrocel-L in heart failure.

Market reports indicate the company has scheduled a shareholder meeting for Nov. 10.

_This article is for information only and does not constitute financial advice._