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Shares in Melbourne-based biotech Mesoblast (ASX: MSB) hit a five-year high this morning after announcing a surge in sales for its flagship product Ryoncil to US$35 million ($52.2 million).
The sales for the December quarter are up 60 per cent from the September quarter for Ryoncil, which was the first mesenchymal stromal cell (MSC) product approved by the US Food and Drug Administration (FDA) for any indication.
That latest result builds on the momentum achieved in the September quarter which itself was up 66 per cent to US$21.9 million from the June quarter.
Mesoblast shares hit a high of $3.30 this morning – a peak not seen since December 2020. The shares were trading 31c or 10 per cent higher at $3.26 each at 10.39am (AEDT).
The sales surge for Mesoblast comes on the heels of Ryoncil becoming commercially available for purchase in the US in March last year.
The treatment, which provides an alternative to steroid therapy, is the only approved therapy for steroid-refractory acute graft versus host disease (GVHD) in paediatric patients aged from two months to adolescence.
Mesoblast says Ryoncil will be evaluated in a pivotal trial as part of a second-line regimen for adults with GVHD, a market about three times larger than the paediatric market.
The sales surge for Mesoblast’s lead product has also put the company on track to fully repay its subordinated royalty facility by mid-2026.
Mesoblast says revenue growth and a US$125 million debt facility secured last month from NovaQuest Capital Management LLC, its largest shareholder, has strengthened the company’s balance sheet.
The new facility repaid Mesoblast’s former senior secured loan from Oaktree Capital Management, Inc. and was struck at a significantly lower interest rate of 8 per cent with greater flexibility for early repayment.
“Our strong balance sheet, continued growth in quarterly sales of Ryoncil, and a new lower-cost financing facility provides greater flexibility for strategic partnerships and pursuit of label expansion for Ryoncil,” says Mesoblast CEO Dr Silviu Itescu.
The latest US$35 million quarterly sales for Ryoncil compare with Mesoblast’s total revenue of US$17.2 million in FY25, up 191 per cent from US$5.9 million a year earlier.
When announcing the FY25 results in August last year, Itescu described the previous 12 months as a “banner year” for the company thanks to achieving FDA approval.
Itescu last month added that the new debt facility secured with NovaQuest Capital Management “substantially lowers the company’s cost of capital and frees up all of our major assets to provide total flexibility for strategic partnerships and commercialisation”.
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