If you'd invested $5,000 in this ASX 300 healthcare stock a year ago, you'd now have $30,000!

This stock has made millions for investors over just a few months.

| More on:
Doctor doing a telemedicine using laptop at a medical clinic

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If I told you that a $5,000 investment in an ASX 300 healthcare stock just one year ago would be worth $30,000 today, you might be a little sceptical. 

After all, that kind of return (500%), especially among the larger companies on the ASX, is an exceptionally rare feat. It certainly beats the pants off most of the popular stocks on the ASX 300, including BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA).

It's even far greater than the returns of popular growth winners like WiseTech Global Ltd (ASX: WTC), Pro Medicus Limited (ASX: PME) and Xero Ltd (ASX: XRO).

So, what is this highly lucrative ASX 300 stock? Well, it's none other than biotech company Mesoblast Ltd (ASX: MSB).

Yep, one year ago, you could have bought this ASX 300 stock for just 27 cents a pop. Today, those same shares are going for $1.63 each.

That means if one had put $5,000 into Mesoblast shares in December of 2023, they would have been able to amass 18,518 shares (not accounting for brokerage costs). Today, those 18,518 shares would have a value of $30,184.34. Not a bad return for just one year of waiting.

So, how has this ASX 300 healthcare stock delivered such an eye-watering gain in so little time?

How has this ASX 300 healthcare stock rocketed 500% in a year?

Well, Mesoblast regularly experiences the same double-edged sword that most other biotech companies do. Investors tend to flood in when the company is expected to successfully bring a product to market. But equally, investors can bail out en masse if the company experiences setbacks in these endeavours.

A year ago, Mesoblast was in the middle of one of those latter cycles. Its attempts to bring an anti-inflammation drug to market had been met with numerous setbacks, including rejections from government agencies like the US Food and Drug Administration (FDA).

However, all of that changed in late March of this year. As we covered at the time, Mesoblast revealed that the FDA had finally given the company approval to submit a Biologics License Application (BLA) for its 'Ryoncil' remestemcel-L treatment.

The company's shares promptly rocketed close to 200% over the following week or so and have continued to trend upward ever since.

It's clear that investors anticipate that this ASX 300 healthcare stock will continue to find success with Ryoncil and have adjusted the Mesoblast share price accordingly. The company itself shares that confidence, with Mesoblast already initiating a convertible note subscription with its biggest investors that will give it access to additional capital if the FDA gives Ryoncil approval.

Foolish takeaway

Before you turn green with envy though, it's worth noting that this ASX 300 healthcare stock has only been a lucrative investment for a handful of buyers. If you owned this stock for more than a few years, chances are you might still be nursing a loss.

Despite the astonishing gains that Mesoblast shares have made over the past 12 months, this ASX 300 healthcare stock is down by 15% over the past five years. In fact, any investor who bought this company back in August 2020 would still be sitting on a loss of more than 68% today.

Check that out for yourself below before you go:

Created with Highcharts 11.4.3Mesoblast PriceZoom1M3M6MYTD1Y5Y10YALL11 Dec 201911 Dec 2024Zoom ▾Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '242020202020212021202220222023202320242024www.fool.com.au

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

three excited doctors with hands in the air
Healthcare Shares

Why Macquarie forecasts a 22% upside for this ASX All Ords healthcare stock

Macquarie expects a big rebound ahead for this ASX healthcare stock. But why?

Read more »

A young man wearing a black and white striped t-shirt looks surprised.
Healthcare Shares

Guess which ASX All Ords stock is jumping 9% on $1.6b market opportunity

This small cap is having a big day. But why?

Read more »

A group of three scientists talking excitedly while working in a lab on a diabetes test developed by Proteomics International Laboratories which is an ASX share tipped to explode by Alto Capital
Healthcare Shares

75% upside: Broker tips two ASX healthcare shares

This broker sees big potential in these two Australian healthcare companies 

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

What does the Macquarie Hospital Claims Index mean for ASX 200 health insurance stocks?

Macquarie shares its view on Medibank Private and NIB Holdings.

Read more »

Two lab workers fist pump each other.
Broker Notes

What's JP Morgan's price target on CSL shares?

Are CSL shares undervalued or will they continue to underperform?

Read more »

Portrait, confidence and team of doctors in the hospital standing after a consultation or surgery. Success, healthcare and group of professional medical workers in collaboration at a medicare clinic.
Healthcare Shares

2 ASX healthcare stocks making huge moves on big news

These shares are getting investors excited today. But why?

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Healthcare Shares

Which ASX All Ords stock is up 15% on guidance upgrade?

Let's find out what is getting investors excited on Tuesday.

Read more »

A senior pharmacist talks to a customer at the counter in a shop.
Healthcare Shares

3 reasons why the Sigma Healthcare share price could be a buy

This business has a very exciting outlook.

Read more »