Shares in Mesoblast Ltd (NASDAQ:MESO, ASX:MSB) surged by nearly 38% following Friday’s successful commercial launch of its FDA-approved treatment, Ryoncil®, for steroid-refractory acute graft-versus-host disease (SR-aGvHD) in children. The Melbourne-based biotechnology company reported a strong start to the first quarter post-launch, with gross revenue of US$13.2 million for the period ending June 30, 2025.
The stock gained almost 35% over the week to reach $2.41, buoyed by the positive update. However, the momentum appears to be tapering off this week, with shares falling by 3.7% today to A$2.32.
The release of Ryoncil® marked a significant milestone for Mesoblast, as it is the first and only FDA-approved mesenchymal stromal cell (MSC) product for the treatment of SR-aGvHD in pediatric patients.
Strong financial foundation and regulatory exclusivity
Mesoblast’s solid financial standing remains a key asset, with US$162 million (A$247 million) in cash on hand at the end of the quarter, positioning the company for continued expansion. In addition to the strong initial sales of Ryoncil®, the company also received US$1.6 million in royalties from the sale of TEMCELL® HS Inj. in Japan, through its licensing agreement.
The company also received seven years of orphan-drug exclusivity from the US Food and Drug Administration (FDA) for Ryoncil® for SR-aGvHD in pediatric patients, protecting it from competition in the US market during that period. In addition, Mesoblast holds biologic exclusivity preventing competitors from referencing Ryoncil®'s biologic license application (BLA) until December 2036, effectively barring biosimilars from entering the market for more than a decade.
“We are pleased with the commercial launch activities of Ryoncil® in the first quarter post-launch and look forward to updating on the current quarter’s progress now that mandatory state CMS coverage has become effective as of July 1, and we complete onboarding of the remaining major US transplant centres,” said Mesoblast CEO Dr Silviu Itescu.
The company has onboarded more than 25 transplant centres, with plans to complete onboarding at 45 priority centres this quarter. The company also highlighted the expanding coverage for the product, now insured for more than 250 million US lives through both commercial and government payers, including federal Medicaid, which became effective from July 1.
Forward momentum for expansion
Looking ahead, Mesoblast remains focused on expanding the use of Ryoncil® in adults with SR-aGvHD. In July, the company met with the FDA to discuss a pivotal trial for Ryoncil® in this adult population, in collaboration with the National Institutes of Health-funded Bone Marrow Transplant Clinical Trials Network.
Meanwhile, the company is continuing its work with rexlemestrocel-L, its second-generation allogeneic MSC therapy, for the treatment of chronic inflammatory diseases like ischemic heart failure and chronic low back pain. Recent meetings with the FDA on the latter have aligned the company and regulators on the pathway to filing for biologics license approval (BLA), which could pave the way for accelerated approval under the existing Regenerative Medicine Advanced Therapy (RMAT) designation.
Stock movement and market reaction
Despite a promising week for Mesoblast, investor sentiment appears to have moderated as the stock price has slightly retreated from its Friday highs. As of 4:30 pm AEST on Friday, Mesoblast shares were trading at A$2.32, down 3.73%. However, the company’s long-term prospects, buoyed by Ryoncil®'s commercial launch and a robust cash position, provide strong fundamentals as the stock enters the next phase of growth.
The market will likely continue to monitor the progress of the company’s US product rollout and upcoming clinical trials for both Ryoncil® and rexlemestrocel-L, with potential catalysts on the horizon.