Mesoblast Ltd. Q2 FY2023 earnings call

• The company has a novel allogeneic cell therapy platform for treating severe inflammatory conditions. Remestemcel BLA resubmitted to FDA in January 2023. Rexlemestrocel has RMAT for chronic low back pain and heart failure, with Phase 3 trials completed. DREAM heart failure trial data published. - R&D expenditure reduced by $2.5 million to $7.7 million in Q2 2023, supporting preparations for BLA resubmission and pivotal studies. - Unmet need in steroid-refractory acute graft versus host disease (90% mortality), with remestemcel showing survival benefits. - For rexlemestrocel in chronic low back pain, RMAT received, Phase 3 trial showed pain reduction at 12, 24, 36 months. - In heart failure, DREAM trial published with improvements in ejection fraction, reduced major adverse events, and RMAT for sickest patients.

Revenues from royalties on sales of TEMCELL in Japan by the licensee were $1.9 million for the second quarter ended December 31, 2022. On a constant currency basis, sales for the quarter ended December 31, 2022, were $2.1 million compared with $2.3 million for the quarter ended December 31, 2021. Annualized revenue from royalties on sales of mesenchymal stromal cells products is approximately $7.6 million. Cash on hand was $67.6 million at December 31, 2022, with up to an additional $40 million from existing financing facilities subject to certain milestones.

• FDA review of BLA has a 6-month maximum review period from filing, no expectation of another panel review. - Plan to commence pivotal Phase 3 trial for rexlemestrocel in chronic low back pain midyear. - Meeting with FDA next quarter to discuss pathway for heart failure product under RMAT designation.

Q: When can we expect a response by the FDA on BMI [ph] recommission and would you anticipate an advisory committee?

A: FDA timelines are affected by COVID, but there's an active process. 6-month maximum review period from filing, no expectation of another panel review as there was a 9:1 vote in favor previously.

Q: Expectations and plans for rexlemestrocel in heart failure regarding partnering and pivotal trial after regulatory discussions?

A: DREAM study publication validates data for discussions with agency and partners. RMAT for sickest heart failure patients, will continue discussions with FDA on path to approval for high-risk or broader Class II/III population.

Q: On GVHD study, FDA's view on MAP biomarker and comparison of clinical grading scores?

A: MAP score is a validated biomarker more sensitive than clinical grading scores. CIBMTR grading (B, C, D) and Glucksberg (2, 3, 4) are related but MAP is objective.

Q: Patient population for rexlemestrocel chronic back pain trial with less than 5 years of back pain?

A: Patients with moderate to severe discogenic pain, radiographic evidence, at least 6 months unremitting pain not responding to conservative therapy, including opioids, within first 5 years with active inflammation.