Appendix 4C Quarterly Activity Report

NEW YORK, Oct. 28, 2021 (GLOBE NEWSWIRE) — Mesoblast Limited (Nasdaq:MESO; ASX:MSB), global leader in allogeneic cellular medicines for inflammatory diseases, today provided an activity report for the first quarter ended September 30, 2021, and an update on its pipeline of late-stage product candidates.

Key highlights for the quarter:

• Revenues from TEMCELL^® HS Inj.¹ royalties in Japan were US$2.4 million, an increase of 22% on the previous quarter, and of 90% on the comparative quarter last year
• Total Operating Activities resulted in net cash usage of US$19.6 million in the quarter, approximately 50% of which was to support the regulatory pathway to approval, manufacturing scale-up, and lifecycle management of the remestemcel-L platform
• Cash on hand at the end of the quarter was US$116.0 million
• Mesoblast is in active discussions to complete a refinancing of its existing senior secured debt facility by calendar year end  
• Results published in the latest issue of the peer-reviewed journal Bone Marrow Transplantation² showed that children with steroid-refractory acute graft versus host disease (SR-aGVHD) and biomarkers predictive for highest mortality had 64% survival when treated with remestemcel-L compared with only 10% survival when treated with other available therapies, including ruxolitinib or other biologics
• These data provide further support for the proposed anti-inflammatory mechanism of action of remestemcel-L and its immunomodulatory activity in patients with SR-aGVHD, resulting in improved survival outcomes
• At its upcoming scheduled meeting with United States Food & Drug Administration’s (FDA) Office of Tissue and Advanced Therapies (OTAT), Mesoblast will address the appropriateness of potency assays related to remestemcel-L’s proposed anti-inflammatory mechanism of action as well as the outstanding chemistry, manufacturing and controls (CMC) items which could support a resubmission of the current Biologics License Application (BLA) for remestemcel-L in the treatment of SR-aGVHD in children
• The FDA advised Mesoblast that if an additional clinical study in acute respiratory distress syndrome (ARDS) due to COVID-19 showed statistically positive outcomes, it could provide a dataset in conjunction with the recently completed 222 patient clinical study that might be sufficient to support an emergency use authorization (EUA)
• Mesoblast has entered into a license and collaboration agreement with Novartis for the development, manufacture, and commercialization of remestemcel-L, with an initial focus on the treatment of ARDS, including that associated with COVID-19. The agreement remains subject to certain closing conditions, including time to analyze the results from the COVID-19 ARDS trial
• Results from the randomized, controlled Phase 3 trial of rexlemestrocel-L in 565 patients with New York Heart Association (NYHA) class II and class III chronic heart failure (CHF) with low ejection fraction (HFrEF) have been selected through peer review as a late breaking presentation at the American Heart Association (AHA) annual meeting occurring November 13^th– 15^th. The featured session is titled ‘Building on the Foundations of Treatment: Advances in Heart Failure Therapy’
• The trial’s co-principal investigator Dr Emerson Perin, Medical Director of Texas Heart Institute, and Clinical Professor, Baylor College of Medicine, will give the presentation titled ‘Randomized Trial of Targeted Transendocardial Delivery of Mesenchymal Precursor Cells in High-Risk Chronic Heart Failure Patients with Reduced Ejection Fraction’
• Mesoblast expects to receive feedback from the FDA in the current quarter on the potential pathways to US regulatory approval for its rexlemestrocel-L technology platform following the recently completed Phase 3 trials in patients with chronic heart failure and chronic low back pain (CLBP) due to degenerative disc disease

Cash Flow Report for the First Quarter FY2022

Cash on hand at the end of the quarter was US$116.0 million.

Revenues from TEMCELL® HS Inj. royalties in Japan for the quarter ended September 30, 2021 were US$2.4 million. This represents a 22% increase compared to the previous quarter ended June 30, 2021, and a 90% increase compared to US$1.2 million in the comparative quarter ended September 30, 2020. Total royalty receipts for the quarter were US$2.0 million, reflecting revenues recognized in the prior quarter.

Total Operating Activities resulted in net cash usage of US$19.6 million in the quarter ended September 30, 2021.

Approximately 50% of the operating net cash usage, US$9.7 million was an investment in the remestemcel-L platform to support the regulatory pathway to approval, manufacturing scale-up, and lifecycle management. Mesoblast has an upcoming scheduled meeting with FDA’s OTAT, to address outstanding CMC items which could support a resubmission of the current BLA in the treatment of SR-aGVHD in children.

Research and Development payments were US$7.0 million for the current quarter. This comprises payments for the recently completed trials in COVID-19 ARDS, CHF and CLBP, as well as potency assay work in support of these programs.

Product manufacturing & operating costs and manufacturing commercialization payments were US$7.1 million for the current quarter, the majority being for commercial manufacturing and inventory build in anticipation for product launch of remestemcel-L.

Payments to Related Parties, detailed in Item 6 of the Appendix 4C cash flow report for the quarter, comprise approximately US$425,000 in Non-Executive Director fees and Executive Director’s salary.

A copy of the Appendix 4C – Quarterly Cash Flow Report for the first quarter FY2022 is available on the investor page of the company’s website www.mesoblast.com.

About Mesoblast
Mesoblast is a world leader in developing allogeneic (off-the-shelf) cellular medicines for the treatment of severe and life-threatening inflammatory conditions. The Company has leveraged its proprietary mesenchymal lineage cell therapy technology platform to establish a broad portfolio of late-stage product candidates which respond to severe inflammation by releasing anti-inflammatory factors that counter and modulate multiple effector arms of the immune system, resulting in significant reduction of the damaging inflammatory process.

Mesoblast has a strong and extensive global intellectual property portfolio with protection extending through to at least 2041 in all major markets. The Company’s proprietary manufacturing processes yield industrial-scale, cryopreserved, off-the-shelf, cellular medicines. These cell therapies, with defined pharmaceutical release criteria, are planned to be readily available to patients worldwide.

Mesoblast has completed Phase 3 trials of rexlemestrocel-L for advanced chronic heart failure and chronic low back pain. Remestemcel-L is being developed for inflammatory diseases in children and adults including steroid refractory acute graft versus host disease and moderate to severe acute respiratory distress syndrome. Two products have been commercialized in Japan and Europe by Mesoblast’s licensees, and the Company has established commercial partnerships in Europe and China for certain Phase 3 assets.

Mesoblast has locations in Australia, the United States and Singapore and is listed on the Australian Securities Exchange (MSB) and on the Nasdaq (MESO). For more information, please see www.mesoblast.com, LinkedIn: Mesoblast Limited and Twitter: @Mesoblast

References / Footnotes

1. TEMCELL^® HS Inj. is a registered trademark of JCR Pharmaceuticals Co. Ltd.
2. Kasikis S., et al. Mesenchymal stromal cell therapy induces high responses and survival in children with steroid refractory GVHD and poor risk. Bone Marrow Transplantation 2021; https://doi.org/10.1038/s41409-021-01442-3

Forward-Looking Statements
This announcement includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements should not be read as a guarantee of future performance or results, and actual results may differ from the results anticipated in these forward-looking statements, and the differences may be material and adverse. Forward-looking statements include, but are not limited to, statements about the initiation, timing, progress and results of Mesoblast’s preclinical and clinical studies, and Mesoblast’s research and development programs; Mesoblast’s ability to advance product candidates into, enroll and successfully complete, clinical studies, including multi-national clinical trials; Mesoblast’s ability to advance its manufacturing capabilities; the timing or likelihood of regulatory filings and approvals, manufacturing activities and product marketing activities, if any; the commercialization of Mesoblast’s product candidates, if approved; regulatory or public perceptions and market acceptance surrounding the use of stem-cell based therapies; the potential for Mesoblast’s product candidates, if any are approved, to be withdrawn from the market due to patient adverse events or deaths; the potential benefits of strategic collaboration agreements and Mesoblast’s ability to enter into and maintain established strategic collaborations; Mesoblast’s ability to establish and maintain intellectual property on its product candidates and Mesoblast’s ability to successfully defend these in cases of alleged infringement; the scope of protection Mesoblast is able to establish and maintain for intellectual property rights covering its product candidates and technology; estimates of Mesoblast’s expenses, future revenues, capital requirements and its needs for additional financing; Mesoblast’s financial performance; developments relating to Mesoblast’s competitors and industry; and the pricing and reimbursement of Mesoblast’s product candidates, if approved. You should read this press release together with our risk factors, in our most recently filed reports with the SEC or on our website. Uncertainties and risks that may cause Mesoblast’s actual results, performance or achievements to be materially different from those which may be expressed or implied by such statements, and accordingly, you should not place undue reliance on these forward-looking statements. We do not undertake any obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

Release authorized by the Chief Executive.

For more information, please contact: