Mesoblast Ltd (NASDAQ:MESO) cut its cash burn by 15% in FY16 to US$90m, and guided for a further ~25% reduction in FY17, which will give it headroom to fund the Phase III heart failure (HF) trial that Teva relinquished in June. It has ~12 months of cash runway plus a US$90m equity finance facility, which will give a further 12 months’ runway. It expects to report interim analyses of three Phase III programmes by end Q117, including the HF trial. We lower our valuation ahead of these potential catalysts to A$1.5bn from A$1.8bn (A$3.84 per share from A$4.67), due to lower forecast uptake in HF and removal of two low-priority tier two programmes.
Cutting costs to extend cash runway
Mesoblast cut its cash burn in FY16 (year end 30 June) by 15% to US$89.7m. Further cost-cutting measures are expected to reduce burn by up to US$25m in the current year, although this will be partly offset by expenditure on the Phase III HF trial that was previously funded by Teva Pharma Industries Ltd (NYSE:TEVA). Cash at 30 June was US$80.9m and the company has put in place a US$90m equity funding facility.
To read the entire report Please click on the pdf File Below