The Mesoblast Ltd (ASX: MSB) share price is trading lower on Thursday following the company's FY24 earnings report.
At the time of writing, Mesoblast is fetching 94.5 cents per share, down less than 1% on the day as investors digest the annual update.
Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is also down less than 1% at the time of writing.
Let's see what the company posted in its annual results.
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Mesoblast share price slips on mixed full-year results
Mesoblast's FY24 results reveal some concerning trends. Here are the key highlights:
- Revenue fell 17% year over year to US$5.9 million
- Cash used for operations reduced by 23%, totalling US$48.5 million
- Research and development (R&D) expenses dropped 7% to US$25.4 million
- Manufacturing costs slashed by 43% to US$15.7 million
- Net loss after tax of $88.1 million compared to the $81.8 million loss in FY23
What else happened in FY24?
Mesoblast had an interesting year in FY24. On the business side, revenues decreased by 17%, due to a reduction from royalties on Temcell HS sales in Japan.
Management burned through $48.5 million in cash for the year, a 23% improvement. This was attributed to the "successful execution of [its] payroll reduction strategy".
It was also a year of clinical milestones for Mesoblast. The company resubmitted its Biologics License Application (BLA) for its Ryoncil label to the US Federal Drug Administration (FDA).
The compound is aimed at treating children with steroid-refractory acute graft versus host disease (SR-aGVHD). The FDA is expected to make its decision by January 2025.
Mesoblast says that because the FDA "accepted the BLA resubmission within two weeks", it considers this "a complete response".
The FDA has also conducted mandatory inspections of Ryoncil's manufacturing process, with no adverse findings mentioned.
As a result of the year, the company reported a deeper net loss of $81.8 million. This could impact the Mesoblast share price.
What did management say?
Mesoblast CEO Silviu Itescu commented on the company's progress:
During the past year we have built significant momentum in our interactions with the United States Food and Drug Administration (FDA) across each of our Phase 3 products. I am very pleased that our Biologics License Application (BLA) resubmission for approval of Ryoncil (remestemcel-L) in the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD) was accepted by the FDA.
We are in active discussions with the agency and anticipate a decision prior to or on the Prescription Drug User Fee Act (PDUFA) goal date of January 7, 2025. Concurrently we are implementing a go-to-market plan to bring RYONCIL to the many children suffering with this devastating disease, picking up the substantial amount of work completed last year.
What's next?
Looking forward, Mesoblast is preparing for the potential commercial launch of Ryoncil, pending FDA approval.
The company is also advancing a confirmatory Phase 3 trial with its Revascor label, studying its use in chronic low back pain and other therapeutic areas, including paediatric congenital heart disease.
CEO Itescu said the company is in talks with the FDA on these moves:
We have commenced enrolling patients across multiple U.S. sites in our confirmatory Phase 3 trial for inflammatory back pain which is in alignment with FDA, we have received a Rare Pediatric Disease Designation from FDA for Revascor (rexlemestrocel-L) in children with a congenital heart disease, and have additionally been notified that FDA supports a potential accelerated approval pathway for Revascor in end-stage heart failure patients.
Mesoblast share price snapshot
The Mesoblast share price is under pressure today as investors react to the company's FY24 results. In the last 12 months, the stock is up more than 117%.
