Mesoblast (NASDAQ:MESO) executives highlighted strong early commercial momentum for its cell therapy Ryoncil and outlined multiple regulatory and clinical milestones ahead during the company’s financial results call for the half year ended Dec. 31, 2025.
Ryoncil launch drives first-half revenue
Chief Executive Officer Silviu Itescu said fiscal 2026 to date has been marked by a “very successful product launch” following U.S. Food and Drug Administration approval of Ryoncil in December 2024. Ryoncil, which management described as the “first and only FDA-approved allogeneic mesenchymal stromal cell product,” launched in April 2025 and has shown quarter-on-quarter revenue growth.
Expenses, operating loss, and cash position
On operating expenses, O’Brien said research and development expense was $46.1 million, compared with $5.1 million in the prior-year period. He noted the prior-year figure was “skewed” by a $23 million reversal of an inventory provision tied to Ryoncil’s approval; without that adjustment, he said prior-year R&D expense would have been about $18.1 million. Spending in the current period was attributed to adult graft-versus-host disease (GVHD) trials, the chronic low back pain program, the left ventricular assist device (LVAD) program, preparation for a biologics license application (BLA), and manufacturing work.
Sales and general administrative expense rose to $28.5 million from $18 million a year earlier, which O’Brien attributed to sales and marketing efforts supporting the launch.
Mesoblast posted an operating loss of $40.2 million for the half, compared with $48 million in the prior-year period, which was also impacted by the prior-year inventory provision reversal.
O’Brien said operating cash flow usage was $30.3 million for the first half, and management expects cash usage to decline in the second half of fiscal 2026 based on projected revenue receipts and “disciplined cost control measures and efficiencies.”
The company ended December with $130 million in cash, O’Brien said.
New credit facility and FY2026 revenue outlook
O’Brien also detailed a financing transaction completed late in the period. On Dec. 30, 2025, Mesoblast entered into a $125 million “non-dilutive credit line facility.” The first $75 million tranche was drawn at closing and used to repay the prior senior secured loan in full, while the company also partially repaid a subordinated royalty facility that management expects will be fully repaid by mid-2026 from ongoing revenue.
The remaining $50 million tranche is available at Mesoblast’s option through June 2026. O’Brien characterized the facility as a lower cost of capital that can be repaid at any time without early prepayment or make-whole fees and without exit fees. He also said the facility does not cover Mesoblast’s assets and has no restrictions on additional unsecured debt or licensing activities.
Looking ahead, O’Brien said Mesoblast anticipates full-year fiscal 2026 Ryoncil net revenue of $110 million to $120 million. Management reiterated the guidance during the Q&A after an analyst asked for it to be repeated.
Commercial update: centers onboarded, coverage gains
Chief Commercial Officer Marcelo Santoro said the company is “extremely pleased” with launch performance and that Mesoblast has treated “numerous patients” since launch. He said the company is on track to achieve 20% market share by the end of year one in the market.
Santoro reported operational metrics around rollout and access:
- 49 treatment centers onboarded to date
- Ryoncil listed on formulary at 30 of those centers
- 30 hospitals have opted to use Optum Frontier, the company’s specialty pharmacy partner
- Coverage in place across insurance plans representing over 280 million lives, across commercial and government payers
- Medicaid coverage in all states
- A specific reimbursement code, J3402, went into effect on Oct. 1 to support billing and reimbursement, along with published CMS rates
He said major payers including Aetna, Cigna, UnitedHealthcare, Anthem, Humana, and Prime Therapeutics (covering Blue Cross plans) have issued favorable coverage policies and that these policies do not require step therapy.
In response to an analyst question on the 20% share target, management said the goal is to reach 20% by the fourth quarter of the fiscal year, and Itescu said internal assumptions include a patient range of roughly 300 to 375 and a 40% peak share assumption over time, while noting the company believes the product “should be used by everyone.”
Executives also said they are seeing both new centers adopt and “repeated use” at existing centers, alongside efforts focused on physician education and caregiver awareness.
Pipeline and regulatory milestones: adult GVHD, back pain, and Revascor
Beyond the pediatric indication, Itescu outlined plans to expand Ryoncil into adults. A pivotal study in adults with severe steroid-refractory GVHD is underway with partners at the NIH-funded Blood and Marrow Transplant Clinical Trials Network. Itescu said the protocol has been “locked down” after a recent FDA meeting, and the company expects site initiation and patient enrollment to begin after central IRB approval anticipated in March.
Mesoblast also discussed its “second-generation platform,” rexlemestrocel-L, in chronic discogenic low back pain and chronic ischemic heart failure. Itescu said the company received positive FDA feedback on potential BLA filing for low back pain based on a clinically meaningful reduction in pain intensity at 12 months in a completed Phase III trial. He added that FDA confirmed 12-month pain reduction is an approvable endpoint, including under the current FDA administration, and noted the program has RMAT designation as a potential opioid-sparing therapy. A confirmatory Phase III trial is recruiting 300 patients across 40 U.S. sites, with enrollment expected to complete in March or April, and data readout and BLA filing expected in calendar 2027.
For Revascor in end-stage heart failure patients supported by LVADs, Itescu reviewed results from two randomized controlled studies, including a 159-patient trial (LVAD study 2) and a supportive 30-patient trial (LVAD study 1). He said both trials showed Revascor reduced cumulative incidence of major bleeding events and related hospitalizations through six months. He also presented what he described as new data indicating reductions in major bleeding events and hospitalizations over 12 months, as well as effects on right heart failure hospitalizations and mortality risk.
With orphan drug designation and ongoing work on chemistry, manufacturing, and controls, Itescu said Mesoblast is moving from an accelerated approval strategy to pursuing full approval for the LVAD indication and expects to file the BLA in the next quarter. In Q&A, management said it intends to seek a label for the overall LVAD patient population while providing FDA with data showing ischemic patients are at higher risk and may see greater benefit.
About Mesoblast (NASDAQ:MESO)
Mesoblast Limited is a global leader in allogeneic cellular medicines, focused on developing treatments for inflammatory and immunologic diseases. Founded in 2004 by Dr. Silviu Itescu, the company builds on proprietary mesenchymal lineage cell technology to create off-the-shelf, donor-derived therapies. These therapies are designed to modulate immune responses and promote tissue repair in conditions where existing medical options are limited or ineffective.
The company’s most advanced product, Alofisel® (darvadstrocel), has been approved in Europe for the treatment of complex perianal fistulas in adults with Crohn’s disease.
