MedPath

Mesoblast Secures $50 Million Funding Option Contingent on Ryoncil FDA Approval

10 months ago3 min read

Key Insights

  • Mesoblast has entered into a convertible note agreement with its largest shareholder for up to $50 million, pending FDA approval of Ryoncil.

  • The funding will support the commercial launch of Ryoncil for treating children with steroid-refractory acute graft versus host disease (SR-aGvHD).

  • The convertible notes have a 5% annual coupon and a conversion price of $9.06 per American Depository Receipt (ADR).

Mesoblast Limited (Nasdaq:MESO; ASX:MSB) has secured an option to issue up to US$50 million in convertible notes through an agreement with its largest shareholder, Gregory George. This financial arrangement is contingent upon the U.S. Food and Drug Administration (FDA) approval of Mesoblast's lead product candidate, Ryoncil® (remestemcel-L), for the treatment of children with steroid-refractory acute graft versus host disease (SR-aGvHD).
The funding, available at Mesoblast’s discretion, is earmarked to facilitate the seamless implementation of its commercial strategy. The FDA decision regarding Ryoncil is anticipated on or before the Prescription Drug User Fee Act (PDUFA) goal date of January 7, 2025.

Terms of the Convertible Note Agreement

Under the terms of the agreement, Mesoblast has the option to issue up to US$50 million in convertible notes in tranches of US$10 million within a 90-day period following FDA approval of Ryoncil. The convertible notes will carry a 5% annual coupon on the face value of the issued notes. Additionally, a commitment fee comprising warrants to subscribe for ordinary shares or American Depository Receipts (ADRs) will be payable upon signing the agreement and the first issue of convertible notes.
The conversion price is set at US$9.06 per ADR, equivalent to A$1.32 per ASX-listed share, representing a 25% premium to Mesoblast’s 5-day volume-weighted average share price (VWAP) up to and including the close of trading on NASDAQ on September 27, 2024. The notes will mature four years after the first issuance, with the investor having the option to convert the notes into fully paid ordinary shares or ADRs at the conversion price.
The convertible notes will be unsecured and subordinated to the company's existing secured financing facilities. The conversion price is subject to standard adjustment mechanisms in the event of future share issues, capital reductions, or other corporate actions.

Commercialization Strategy

Mesoblast's commercial launch strategy for Ryoncil in children with SR-aGvHD includes:
  • Hiring senior personnel to build a targeted commercial team.
  • Initiating market access activities, including payer outreach and medical education.
  • Engaging with the top 15 treatment centers, which account for approximately 50% of patients.
  • Profiling high-volume centers and conducting non-promotional activities to raise disease awareness.

Management Commentary

Mesoblast Chief Executive Silviu Itescu stated, "We appreciate the ongoing support from our major shareholder in ensuring that the Company is well capitalized for commercial product launch and can hit the ground running immediately following approval of RYONCIL by FDA."

About Ryoncil and SR-aGvHD

Ryoncil (remestemcel-L) is Mesoblast's lead product candidate, a mesenchymal stem cell (MSC) therapy being developed for various inflammatory conditions. SR-aGvHD is a severe complication following allogeneic hematopoietic stem cell transplantation, where the donor immune cells attack the recipient's tissues. There is a significant unmet need for effective treatments for children with SR-aGvHD, as the condition carries a high mortality rate.
This funding agreement marks a strategic step for Mesoblast, providing financial flexibility to support the potential launch of Ryoncil, pending FDA approval. The company is focusing on a targeted commercial approach, leveraging key opinion leaders and specialized transplant centers to maximize market penetration.
Subscribe Icon

Stay Updated with Our Daily Newsletter

Get the latest pharmaceutical insights, research highlights, and industry updates delivered to your inbox every day.

Related News

MedPath

Empowering clinical research with data-driven insights and AI-powered tools.

© 2025 MedPath, Inc. All rights reserved.