Why has the Mesoblast share price gained 6% so far this week?

The Mesoblast Limited (ASX: MSB) share price is up 6.25% since the start of the week.

Shares of the regenerative medicine company opened at 88 cents each on Monday and are currently trading for 93.5 cents.

Gains for the company are outperforming the S&P/ASX 200 Health Care Index (ASX: XHJ), which has seen an increase of 1.23% since the start of the week.

So what could be contributing to Mesoblast’s success this week?

Mesoblast share price rises on quarterly update

The ASX healthcare share released its quarterly activities and cashflow report for the quarter ended September 30 on Monday morning.

The Mesoblast share price gained 4.52% the day the report was released, and another 1.62% the following day.

Let’s take a look at the highlights of the report.

• Net cash used in operating activities: $14.28 million
• Net cash used in investing activities: $0.20 million
• Net cash from financing activities: $40.29 million
• Cash and cash equivalents at end of period: $85.50 million
• Estimated quarters of funding available: 8.8

There’s evidence that Mesoblast could have become more efficient in cutting costs in its operations. The company used US$14.3 million for operating activities, down US$3.9 million (22%) on the same quarter last year. It was also US$8 million (47%) less than what was used two years ago.

Another financial highlight is that Mesoblast had US$85.5 million at the end of the quarter and raised US$45 million in August 2022. They can draw down an additional US$40 million from existing financing facilities if they meet certain milestones.

Product pipeline update

Mesoblast made headway in its submissions to the US Food and Drug Administration (FDA) to use remestemcel-L for the treatment of children with a condition called steroid-refractory graft versus host disease, or SR-aGVHD.

Mesoblast submitted new information on clinical and potency assay items to the Investigational New Drug (IND) file for remestemcel-L in the treatment of children with SR-aGVHD, as guided by FDA. The FDA has given it Fast Track Designation, which means the process of studying and approving the drug will be faster than usual.

It also worked with the FDA to potentially use rexlemestrocel-L for the treatment of chronic back pain caused by degenerative disc disease. This drug has been tested in a small group of people and was shown to reduce pain significantly.

Mesoblast plans to have clearance from the FDA by year-end 2022 for the pivotal trial of this drug.

The company is also continuing to investigate using rexlemestrocel-L for the treatment of chronic heart failure.

Mesoblast share price snapshot

Despite its gains this week, the Mesoblast share price is down 33% year to date. It is also down 44% since this time last year.

Meanwhile, the All Ordinaries Index (ASX: XAO) is down almost 10% in 2022 and 9% over the past 12 months.

The company’s market capitalisation is around $692.89 million.

The post Why has the Mesoblast share price gained 6% so far this week? appeared first on The Motley Fool Australia.

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Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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