Mesoblast Limited (ASX: MSB) shares were dropping again today and, with no news from the company, the question is why? By the market’s close, the Mesoblast share price was trading at $2.39, down 3.24% from yesterday’s close. This compares to the S&P/ASX 200 Index (ASX: XJO), which was up 0.5% today.
The stem cell focused biotech company is listed on both the ASX and Nasdaq and its ASX share price has fallen by 51.32% over the last 6 months.
Let’s look further into what’s been happening for Mesoblast.
Recent share price fluctuations
The Mesoblast share price had an eventful 2020, which included steep falls in December after trials for some of the company’s new products delivered disappointing results.
On 15 December, the company announced that while its phase 3 trial of REVASCOR for advanced chronic heart failure showed good results, it did not achieve the objectives of the trial. This less than pleasing news saw Mesoblast shares plummet by more than 45% in one day.
Then, only days later, Mesoblast announced its randomised controlled trial of remestemcel-L in ventilator-dependent patients with moderate to severe acute respiratory distress syndrome due to COVID-19 had also not achieved its objectives. Remestemcel-L had not proven to be as effective in preventing death as it was predicted to be.
The company stated the failed remestemcel-L trial was due to improvements in other COVID-19 treatments having been made in the time between gathering the initial pilot data and the execution of the trial. Though, this reasoning didn’t save the company’s share price which fell another 10% in the days following the news.
Compared to 2020, Mesoblast shares appeared to have been pushing through 2021 comparatively stably and even slowly gaining. That was, until the beginning of March.
On 2 March, Mesoblast exited a trading halt by announcing a US$110 million private placement led by a strategic investor group. By 9 March, the Mesoblast share price had plunged nearly 6%.
The company’s shares have since increased slightly but are still 2.85% lower than their final day of trading in February.
Mesoblast is a rare dual listed company
A company gains several benefits from being listed on two separate global exchanges. These include access to greater capital, additional liquidity and more diverse trading hours.
Because Mesoblast’s shares are dual-listed on the ASX and Nasdaq, the company can theoretically action more capital raises with fewer negative consequences, therefore having greater access to additional cash when needed.
Up and coming products
Mesoblast currently has three products at phase 3 trial stage.
They are:
- Remestemcel-L for the treatment of steroid-refractory acute graft versus host disease and for acute respiratory distress syndrome as a result of COVID-19.
- REVASCOR for advanced chronic heart failure.
- MPC-06-ID for lower back pain due to degenerative disc disease.
Mesoblast share price snapshot
Despite a number of significant hits to the Mesoblast share price, it is still trading above its 2021 opening price, currently by around 6%.
The company’s shares are also up an impressive 101% over the last 12 months. So, investors who got in before Mesoblast’s rollercoaster will still be happy with their investment.
Mesoblast has a market capitalisation of $1.6 billion, with approximately 648 million shares outstanding.
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More reading
- Piedmont Lithium (ASX:PLL) successfully completes US public offering
- What’s weighing on the Mesoblast (ASX:MSB) share price lately?
- These are the 10 most shorted shares on the ASX
- ASX 200 up 0.3%: Mesoblast raises US$110 million, tech shares rebound
- Here’s why the Mesoblast (ASX:MSB) share price is tumbling lower today
Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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