Guess which ASX All Ords company is being sued by shareholders over stock price losses

Mesoblast Ltd (ASX: MSB) shares have been on fire recently.

So much so, the ASX All Ords biotech stock has risen 40% since this time last month.

Why has this ASX All Ords biotech stock stormed higher?

This strong gain has been driven by a couple of positive developments relating to the US Food and Drug Administration (FDA).

The first was that its Revascor product, which is being trialled as a treatment for children with hypoplastic left heart syndrome, was granted an Orphan-Drug Designation following the submission of results from a randomised controlled trial.

The second news is that the US FDA will support an accelerated approval pathway for its rexlemestrocel-L (R-L) product under the existing Regenerative Medicine Advanced Therapy designation.

It is Mesoblast’s allogeneic mesenchymal precursor cell product for patients with end-stage ischemic heart failure with reduced ejection fraction and a left ventricular assist device.

This positive developments appear to have drowned out news that the ASX All Ords stock has been hit with a class action.

Class action

This month it was revealed that Omni Bridgeway Ltd (ASX: OBL) will be co-funding a shareholder class action on behalf of investors who acquired Mesoblast shares or related securities between 22 February 2018 and 17 December 2020 inclusive. It states:

Broadly, the Consolidated Class Action alleges that Mesoblast contravened its continuous disclosure obligations and engaged in misleading or deceptive conduct throughout the Claim Period in relation to both the SR-aGVHD application and COVID-19 application of R-L.

Participants in the class action may be entitled to compensation for losses arising out of Mesoblast’s alleged breaches of its continuous disclosure obligations and/or by Mesoblast engaging in misleading and deceptive conduct.

It remains unclear how much the class action is seeking in damages but the company can ill-afford to give up much cash. At the end of the first half, Mesoblast had a cash balance of US$77.6 million after burning through US$26.6 million of cash during the six months.

The post Guess which ASX All Ords company is being sued by shareholders over stock price losses appeared first on The Motley Fool Australia.

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More reading

• 4 ASX All Ords shares going gangbusters on Tuesday
• Why 4DMedical, Block, Judo, and Mesoblast shares are pushing higher today
• Why is the Mesoblast share price jumping 16% on Monday?
• Why Cettire, GQG, Mesoblast, and Nine Entertainment shares are falling today
• Mesoblast share price tumbles on US$32.5m half-year loss

Motley Fool contributor James Mickleboro 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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