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The Pilbara Minerals Ltd (ASX: PLS) share price is plummeting today.

The lithium explorer’s shares have fallen 17.3% at the time of writing. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 0.98% so far.

Let’s take a look at what could be impacting the Pilbara Minerals share price.

Lithium price outlook

Pilbara Minerals shares are falling, but they are not the only lithium share to plunge. The Core Lithium Ltd (ASX: CXO) share price is down nearly 12% today, Liontown Resources Ltd (ASX: LTR) is 16% lower, and Allkem Ltd (ASX: AKE) is sliding 12%.

Investors could be selling down lithium shares after Goldman Sachs put out a note warning of a “sharp correction” in lithium prices in the next two years.

Goldman has predicted the lithium price could fall from US$60,350 per tonne to around US$54,000 per tonne in 2022. But, by 2023, Goldman estimates lithium could fall to US$16,372 per tonne.

In a recent note cited by Bloomberg, Goldman analysts Nicholas Snowdon and Aditi Rai predicted the “battery metals bull market” is over“. The analysts said:

Investors are fully aware that battery metals will play a crucial role in the 21st century global economy.

Yet despite this exponential demand profile, we see the battery metals bull market as over for now.

Goldman is also predicting the price of nickel and cobalt to fall in 2022 and 2023.

Meanwhile, following the Goldman report, Credit Suisse has downgraded Pilbara Minerals from “outperform” to “neutral”, The Australian reported. The broker has placed a price target of $3 on the company’s share price.

Pilbara is developing the Pilgangoora Lithium Tantalum Project in Western Australia.

In overseas markets, the Lithium Americas Corp (NYSE: LAC) share price tanked nearly 13% on the New York Stock Exchange on Tuesday. However, in after-hours trading in the US, it is recovering slightly, up 1.83%.

Share price snapshot

The Pilbara Minerals share price has soared 104% in the past year but has dropped 21% year to date.

For perspective, the S&P/ASX 200 Materials Index has climbed nearly 4% over the past 12 months and more than 6% so far this year.

Pilbara Minerals has a market capitalisation of about $7.5 billion.

The post Why is the Pilbara Minerals share price cratering 17% today? appeared first on The Motley Fool Australia.

More reading

• Why are ASX lithium shares tanking on Wednesday?
• ASX 200 midday update: NAB completes acquisition, lithium miners sink, Origin tumbles
• These were the best performing ASX 200 shares in May
• Why has May been such a great month for the Allkem share price?
• Here are the 3 most traded ASX 200 shares on Tuesday

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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The Boss Energy Ltd (ASX: BOE) share price is having a woeful day on the ASX despite the company’s latest positive announcement.

At the time of writing, the uranium producer’s shares are swapping hands at $2.30, down 5.35%.

Boss Energy share price falls on Honeymoon decision

The Boss Energy share price is falling today despite the board’s final investment decision (FID) regarding the Honeymoon Uranium Project.

This comes as the broader sector containing Boss and its peers is treading lower in Wednesday’s trade.

Shares in fellow miners Paladin Energy Ltd (ASX: PDN) and Deep Yellow Limited (ASX: DYL) are down 9.12% and 4.64%, respectively.

According to the Boss Energy release, its board of directors approved the FID to develop Honeymoon this year.

The company will now accelerate construction, ensuring Honeymoon remains on track for first production in the quarter ending December 2023.

This will ramp up to a steady-state rate of 2.45Mlb of triuranium octoxide (U3O8), a compound of uranium, per year.

Boss Energy completed the pivotal front-end engineering design (FEED) study during the previous quarter.

It showed that Honeymoon will be an economically robust project with an internal rate of return (IRR) of 47% at a US$60/lb of U308.

The all-in sustaining cost (AISC) is forecast to be around US$25.60/lb over the life of the mine.

In March, Boss Energy secured $125 million through a capital raise to fund the development of its Honeymoon project. This includes $113 million of estimated capital development costs for re-starting Honeymoon.

What did management say?

Boss Energy managing director Duncan Craib commented on the company’s progress:

This final investment decision puts Boss firmly on track to be Australia’s next uranium producer.

We are fully-funded with no debt, fully-permitted and extensive infrastructure in place. Our front-end engineering studies are completed and we are ready to order key equipment and start construction immediately.

This puts us in an extremely strong negotiating position with utilities and ensures we can capitalise on the looming uranium supply deficit.

In parallel with the above achievements, the uranium price has continued to hold steady. As a result, the value of Boss Energy’s 1.25 million pound stockpile of U308 is $59.38 million.

The combination of the company’s successful raising and uranium stockpile means it’s fully funded through to production and cash flow at Honeymoon.

The Boss Energy share price is up around 2% for the first six months of this year.

The post Boss Energy share price slides 5% despite project milestone appeared first on The Motley Fool Australia.

More reading

• Why is the Liontown share price crashing 16%?
• Why are ASX lithium shares tanking on Wednesday?
• Why the Tesla share price stalled on Tuesday
• Investing in ASX hydrogen shares? Here’s what you should know
• ASX 200 midday update: NAB completes acquisition, lithium miners sink, Origin tumbles

Motley Fool contributor Aaron Teboneras has positions in Paladin Energy Ltd. 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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The Liontown Resources Limited (ASX: LTR) share price has started the month deep in the red.

In afternoon trade, the lithium developer’s shares are down 16% to $1.19.

Why is the Liontown share price crashing lower?

Investors have been selling down the Liontown share price on Wednesday amid broad weakness in the lithium industry.

This appears to have been driven largely by a bearish note out of Goldman Sachs in relation to lithium prices.

That note reveals that its analysts believe that lithium prices have peaked and will be falling materially in the coming years.

However, it is worth noting that this isn’t exactly a new view from Goldman. As we covered here around a month ago, its commodities team have been warning that lithium prices will peak this year and then start to retreat.

It is also worth noting that not all analysts agree with this view. Some believe that demand will continue to outstrip supply and keep prices elevated for longer.

The recent BMX auction from Pilbara Mineral Ltd (ASX: PLS) appears to back up this bullish view. Once again, the lithium giant announced a record bidding price for its spodumene concentrate at last month’s auction.

Are the bulls or the bears correct?

The fact of the matter is that nobody knows what lithium prices will do next. There is an abundance of lithium out there in the world, which is why BHP Group Ltd (ASX: BHP) won’t touch the stuff, but how soon it can get to market is impossible to predict.

That’s what makes lithium shares such a high risk option for investors and is likely to mean the Liontown share price remains quite volatile for the foreseeable future.

The post Why is the Liontown share price crashing 16%? appeared first on The Motley Fool Australia.

More reading

• Why ASX lithium shares have ‘absolutely more room to run’ in 2022: expert
• Liontown Resources share price leaps 4% amid Tesla offtake extension
• 3 ASX lithium shares set to roar back: experts
• ASX 200 midday update: Appen crashes, lithum shares jump
• Brokers name 3 ASX 200 lithium shares primed to take off

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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ASX lithium shares had been handily outperforming the benchmark since Anthony Albanese and the Labor party swept into Canberra last week.

With Labor spruiking tougher commitments to emissions reductions, investors were rewarding producers of the critical battery metal.

Until today.

In late morning trade some of the biggest ASX lithium shares are deep in the red.

How deep?

The Allkem Ltd (ASX: AKE) share price is down 12%; shares in IGO Ltd (ASX: IGO) have lost 13%; and the Pilbara Minerals Ltd (ASX: PLS) mineral share price has tanked 16%.

Ouch.

So, what’s going on?

Argentina and Goldman Sachs

It looks like Argentina, a nation with some of the largest known lithium reserves on Earth, gets some of the blame.

According to The Australian, Argentina has set a reference price for lithium carbonate exports of US$53 per kilogram. This comes after irregularities were detected in shipments over the past two years.

Bloomberg noted, “The reference price strengthens customs’ capacity to oversee exports and avoid under-invoicing.” This reportedly helps “avoid manoeuvring that impacts tax revenues and dollar sales”.

Separately, Goldman Sachs came out with a bearish medium-term outlook for lithium prices that looks to be weighing on ASX lithium shares today.

According to Goldman (courtesy of The Australian):

With climate change top of mind, investors are fully aware that battery metals will play a crucial role in the 21st century global economy, just as bulk and base metals did before them. Yet despite this exponential demand profile, we see the battery metals bull market as over for now.

Crucially, with no prior large-scale demand or supply cycle behind them, these ‘new economy’ commodities have avoided copper and aluminium’s ‘Revenge of the Old Economy’ investment trap.

Indeed, the reverse has occurred, with a surge in investor capital into supply investment tied to the long-term EV demand story, essentially trading a spot driven commodity as a forward-looking equity.

That fundamental mispricing has in turn generated an outsized supply response well ahead of the demand trend in focus. In this context, we see prices on a downward trajectory over the course of the next two years, with a sharp correction in lithium, and to a lesser extent cobalt.

Not everyone is bearish on ASX lithium shares

Despite today’s sharp pullback, longer-term investors in leading ASX lithium shares will have little to complain about.

Over the past 12 months, the IGO share price is up 46%; the Allkem share price is up 85%; and the Pilbara share price is up 100%.

And investors with long term horizons may wish to look ahead to 2030.

According to Barrenjoey, “Electric Vehicles are set to transform the lithium and nickel commodity markets. We forecast global EV sales growing to 30 million in 2030 or around 30 per cent of new car sales.”

The post Why are ASX lithium shares tanking on Wednesday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: NAB completes acquisition, lithium miners sink, Origin tumbles
• These were the best performing ASX 200 shares in May
• Why has May been such a great month for the Allkem share price?
• Here are the 3 most traded ASX 200 shares on Tuesday
• Why ASX lithium shares have ‘absolutely more room to run’ in 2022: expert

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric-car maker Tesla (NASDAQ: TSLA) stalled out of the gate on Tuesday, after Barron’s commented that analyst estimates for the company’s Q2 production levels “look a little high.” As of 10:10 a.m. ET, Tesla stock is down 2.5%. 

So what

If you recall, it’s been a week since Tesla announced plans to resume full-speed production of electric vehicles (EVs) at its Shanghai gigafactory in China — 2,600 cars per day, 949,000 cars per year, and a big boost toward the company’s goal of building 1.5 million EVs this year. One week later, though, Bloomberg reports that the company is still only up to 70% of production capacity, or about 1,800 cars per day. 

However, it’s important to factor in the loss of perhaps 100,000 cars worth of production already in Q1 and Q2 from COVID restrictions in China that impeded production, as well as slower-than-planned production ramps at Tesla’s gigactories in Texas and Germany. When these factors are taken into account, Barron’s calculates that Tesla might produce only 300,000 — or even 260,000 — electric vehicles this quarter. And that suggests that Tesla will fall far short of its 1.5 million-unit goal this year. 

Now what

This explains why some investors might feel inclined to sell Tesla today, before it gets a chance to confirm the “production miss.” I think that’s an overreaction and probably a mistake.

Consider this: Tesla probably won’t produce 1.5 million cars this year (but it still might — with Elon Musk, you never know). But you can hardly blame Tesla for missing a goal if it only misses because of COVID restrictions imposed by a sovereign government. Even if Tesla fails to produce 1.5 million cars this year, the fact that it’s already ramping back up to full capacity in China means that it might produce 1.5 million EVs (or more) next year.

In short, investors shouldn’t focus on the sales goal for any one year because of the quirks of health regulation in one single country — but rather, on the trend of increasing, accelerating production levels at Tesla factories being built all around the world.

Long term, the trend for this stock’s growth is still up. Don’t get too frightened over one down day. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why the Tesla share price stalled on Tuesday appeared first on The Motley Fool Australia.

More reading

• If you’d bought $5,000 of Tesla shares 5 years ago, woohoo! Here’s how much you’d have now
• Why Tesla stock keeps going up
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• Why Tesla stock turned south today
• Why Tesla stock finally bounced today

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The election of the Labor government has many investors wondering what the future holds for ASX hydrogen shares. The newly-formed cabinet is dedicated to a green economy, which includes hydrogen as an important part of that equation.

Hydrogen, specifically green hydrogen, is seen as a key contributor to the goal of electrifying everything, and it’s expected to play an important role in industrial applications. However, that isn’t to say the sector isn’t without its risks.

If you’re thinking about investing in ASX hydrogen shares, here’s what you should know.

What’s the plan for hydrogen?

Energy has become a hot topic as the world faces its greatest energy crisis since the 1970s. A global fossil fuels shortage was already being felt last year, now exacerbated by the conflict between Russia and Ukraine.

This has prompted the International Energy Agency (IEA) to describe the current situation as a “much bigger” crisis than that of the 70s. Portraying the significance of the situation, IEA executive director Fatih Birol said:

Back then it was just about oil. Now we have an oil crisis, a gas crisis, and an electricity crisis simultaneously.

Australia’s fresh faces in Parliament will be looking to reduce the country’s reliance on dinosaur bones. As laid out in its policies, Labor is targeting a commitment to net zero emissions by 2050 with the interim aim of reducing emissions by 43% by 2030.

In turn, ASX hydrogen shares such as Fortescue Metals Group Limited (ASX: FMG), Pure Hydrogen Corporation (ASX: PH2), and Province Resources Ltd (ASX: PRL) could be set to benefit.

However, two industry experts are cautioning investors about the volatility that comes with hydrogen investments. Firstly, KPMG partner and head of climate change and sustainability Adrain King warned:

If we’re going to achieve our ultimate goals, then hydrogen is probably required. But it is still in the innovation stage; it’s very small and still pilot-based compared to what it would need to be.

Similarly, Saxo Markets strategist Jessica Amir said:

The (hydrogen) market is very volatile at the moment. There are a lot of hydrogen companies on the ASX and the smaller ones, in particular, are probably worth staying away from just because of the volatility.

How have ASX hydrogen shares performed?

The performance of ASX hydrogen shares this year is split between small-caps and large-caps. Those with a market capitalisation below $200 million have lost the support of investors, resulting in heavy losses.

Whereas the likes of established companies, such as Fortescue Metals and AGL Energy Limited (ASX: AGL), although not pure-play hydrogen shares, have managed a positive performance.

The post Investing in ASX hydrogen shares? Here’s what you should know appeared first on The Motley Fool Australia.

More reading

• Iron ore price to fall 27% by end of 2022: CBA
• Why did the Fortescue share price lag the ASX 200 in May?
• The richest Aussies revealed (and the ASX shares they own)
• What’s the outlook for ASX 200 dividend shares in the second half of 2022?
• Why is the Fortescue share price tumbling 4% today?

Motley Fool contributor Mitchell Lawler 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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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the month with a small gain. The benchmark index is currently up 0.2% to 7,225.9 points.

Here’s what is happening on the ASX 200 today:

NAB completes Citi acquisition

The National Australia Bank Ltd (ASX: NAB) share price is rising on Wednesday after the bank announced the completion of its $1.2 billion acquisition of Citigroup’s Australian consumer business. This acquisition includes a home lending portfolio, unsecured lending business (operating under the Citigroup brand as well as white label partner brands), retail deposits business, and private wealth management business.

Lithium miners tumble

The lithium sector is a sea of red on Wednesday. This follows bearish notes out of Credit Suisse and Goldman Sachs and news that Argentina has set a lithium reference price of US$53 per kilo. In respect to the former, as we covered here last month, Goldman has reiterated its view that lithium prices will fall heavily in the coming years. The likes of Allkem Ltd (ASX: AKE) and Pilbara Minerals Ltd (ASX: PLS) are falling particularly heavily today.

Origin withdraws guidance

The Origin Energy Ltd (ASX: ORG) share price is sinking today after the energy giant withdrew its earnings guidance. Due largely to coal supply challenges, Origin now expects its energy markets’ underlying EBITDA to be between $310 million and $460 million. Previously, it was expecting $450 million to $600 million of earnings. And with management unsure how long these tough trading conditions will last, it has withdrawn its FY 2023 guidance.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Nufarm Ltd (ASX: NUF) share price with a 2.5% gain. This appears to have been driven by bargain hunters buying shares after a recent decline. The worst performer has been the Pilbara Minerals share price with a 15% decline. This follows the bearish broker notes and Argentina news.

The post ASX 200 midday update: NAB completes acquisition, lithium miners sink, Origin tumbles appeared first on The Motley Fool Australia.

More reading

• Why is the Origin share price tumbling 15% today?
• NAB share price higher after completing $1.2bn Citi consumer business acquisition
• These were the worst performing ASX 200 shares in May
• These were the best performing ASX 200 shares in May
• What went wrong for the Wesfarmers share price in May?

Motley Fool contributor James Mickleboro has positions in Allkem Limited. 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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ASX agricultural shares could be facing a “huge opportunity” in coming years with some reportedly tipped to surge more than others.

Aitken Mount Capital Partners‘ Angus Aitken told clients “the last five years has been a real money-making opportunity” for ASX agriculture shares, as reported in The Australian.

But some stocks are tipped to do better than others. Here are three ASX agricultural shares the broker believes are “standout buys”.

Are these ASX agricultural shares set to take off?

Cobram Estate Olives Ltd (ASX: CBO)

Embattled ASX olive oil producer Cobram Estate has reportedly been flagged as a potential winning agriculture share.

The company floated in August 2021. Its share price has dipped nearly 5% since then to trade at $1.85 at the time of writing. But the broker reportedly believes it has the potential to go much higher.

“We think Cobram is a $5 to $6 stock over time,” Aitken told clients, as quoted by The Australian.

“Remember it takes five to eight years for an olive tree to mature and given 40% of their trees are yet to mature, you get 40% volume growth down here alone without spending another [cent].”

The broker also reportedly noted the company could break into the United States market.

Kiland Ltd (ASX: KIL)

Market watchers might be more familiar with Kiland by its former name, Kangaroo Island Plantation.

The company worked to harvest timber before bushfires damaged 95% of its tree crop in 2020. Fortunately, the ASX share still boasts thousands of hectares of agricultural land.

“Out of bad things, very good things happen and this business is now investing to clean up that land and turn (it) into premium farmland,” Aitken was quoted as telling clients.

“We think over four to five years this 18,000 hectares can be worth $300 million or more … We also see large carbon-related opportunities in this business over time that people won’t have looked at.”

The Kiland share price has fallen 9% since the start of 2022. It’s currently trading at $1.22.

Lark Distilling Co Ltd (ASX: LRK)

The final ASX agriculture share the broker thinks is worth looking at is Lark Distilling.

The company faced a major scandal this year when its CEO resigned amid apparent evidence of drug use.

“We are new to Lark as we think the valuation is dirt cheap,” Aitken wrote, courtesy of The Australian.

“[The former CEO’s] behaviour didn’t change the value of the brand or the maturing whisky.”

“Lark should easily make $25 million to $30 million (in earnings) down the track … you are buying this stock on single-digit multiples when the average [earnings before interest, tax, depreciation, and amortisation (EBITDA)] takeover in the premium spirits space is 30 to 40 times.”

Right now, shares in Lark are swapping hands for $3.08, 41% less than they were at the start of 2022.

The post 3 ASX agricultural shares with ‘real money-making opportunity’: broker appeared first on The Motley Fool Australia.

More reading

• The ASX share trading on ‘dirt cheap’ valuation right now: broker

Motley Fool contributor Brooke Cooper 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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The Origin Energy Ltd (ASX: ORG) share price is plunging on Wednesday after the company updated its guidance for this financial year and next.

The company’s expected earnings for financial year 2022 from its energy markets business have dropped significantly – offset by higher expected earnings from its integrated gas segment. Origin also binned its energy markets’ financial year 2023 guidance.

At the time of writing, the Origin share price is $6.12, 10.66% lower than its previous close. That’s a recovery from its low of $5.81 earlier today, a 15% plunge.

Let’s take a closer look at what’s weighing on the S&P/ASX 200 Index (ASX: XJO) energy producer and retailer’s stock today.

Origin scraps financial year 2023 guidance

Extreme volatility in energy markets forced Origin to update its guidance to the detriment of its share price today.

The volatility has been driven by global energy supply and security concerns, made worse by Russia’s invasion of Ukraine.

Internationally, the company has faced unprecedented increases in energy commodity prices while domestic coal plant outages and high coal and gas prices have bolstered wholesale electricity prices.

In the face of such challenges, the company believes its financial year 2022 underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) will be around the mid-point of its original guidance range of $1,950 to $2,250 million.

That figure has been weighed down by the company’s energy markets business.

It’s struggled as coal supply challenges have impacted its Eraring Power Station. Such challenges have worsened in recent weeks and are expected to continue in financial year 2023.

As a result, Origin now expects its energy markets’ underlying EBITDA to be between $310 million and $460 million. Previously, it was tipped to bring in between $450 million and $600 million of earnings.

Meanwhile, the company’s integrated gas and corporate’s underlying EBITDA guidance has been raised by up to $200 million. It’s now expected to bring in between $1,700 million and $1,800 million.

Australia Pacific LNG‘s cash distribution to Origin, including an oil hedging loss, is expected to be around $300 million higher than previously predicted due to higher oil and gas prices. The distribution is tipped to reach $1.4 billion this financial year.

Finally, Origin has scrapped its energy markets’ financial year 2023 guidance.

However, it plans to continue with its $250 million on-market buy-back over the coming months. So far, it has snapped up $185 million worth of its own shares.

Origin share price snapshot

Today’s tumble hasn’t been enough to tip the Origin share price into the long-term red.

Currently, the stock is 9% higher than it was at the start of 2022. It has also gained 46% since this time last year.

The post Why is the Origin share price tumbling 15% today? appeared first on The Motley Fool Australia.

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• Australia’s renewable energy output could triple by 2030 under Labor. Will that impact these ASX 200 shares?
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• If the ‘election outcome is deeply consequential for clean energy investment’, which ASX shares might benefit?
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Motley Fool contributor Brooke Cooper 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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Shares of Mesoblast Limited (ASX: MSB) spiked 1.52% shortly after the opening bell today. It came amid the release of the company’s financial results and operational highlights for the three months ended 31 March 2022.

Mesoblast shares have since retreated and now sit flat at 98.5 cents.

In broad market moves, the S&P/ASX 200 Index (ASX: XJO) has started the day up and is now 22 basis points higher at 7,226 on last check.

Mesoblast grows revenue, reduces net loss

Key financial highlights for the period include:

• Total revenue increased by 5% from the comparative quarter last year to US$2 million
• Cash on hand at the end of the quarter US$76.8 million, with up to an additional US$40 million available to be drawn down subject to milestones
• Net cash usage for operating activities in the quarter reduced by 40% to US$15.5 million
• Research and development expenses reduced by US$4.2 million or 34%, down to US$8.2 million
• Finance costs for borrowing arrangements with Oaktree and NovaQuest were US$3.9 million for the third quarter FY2022, compared to US$3.2 million same time last year
• Loss after tax for the third quarter FY2022 was US$21.3 million compared to US$26.5 million for Q3 FY21

What else happened last quarter for Mesoblast?

The company made two board and executive appointments last quarter to key positions in the company.

Philip Krause MD, former deputy director Office of Vaccines Research and Review at the United States Food and Drug Administration’s (FDA) Center for Biologics Evaluation and Research (CBER), joined the board in March.

Meanwhile, the company appointed Eric Rose MD as its Chief Medical Officer (CMO). Rose had been a non-executive director of Mesoblast since 2013, the company says.

Mesoblast also completed the resubmission of its Biologics License Application (BLA) for remestemcel-L to the FDA last quarter.

“Mesoblast will provide these new data to FDA and address all chemistry, manufacturing and controls (CMC) outstanding items as required for the planned BLA resubmission in the coming quarter,” the company said.

“If the resubmission is accepted, CBER will consider the adequacy of the clinical data in the context of the related CMC issues.”

Adding to that, it also progressed through its Phase 2/3 study of remestemcel-L. The aim is to treat acute respiratory distress syndrome in COVID-19.

What’s next for Mesoblast?

The company is now working through additional studies for its rexlemestrocel-L compound indicated to manage chronic low back pain from degenerative disc disease.

It is planning an upcoming United States trial set to include at least 20% of subjects from the European Union. This is “to support admissions to both the FDA and the European Medicines Agency (EMA)”.

Mesoblast also notes that it is investigating rexlemestrocel-L in patients with chronic heart failure with reduced ejection fraction.

“Mesoblast expects to receive guidance from FDA on a potential approval pathway following detailed review of the outcomes identified in high-risk HFrEF patients with diabetes and/or myocardial ischemia.”

The company made no mention of financial guidance in its release today.

Mesoblast share price snapshot

In the last 12 months, the Mesoblast share price has slipped around 48% into the red. Mesoblast shares are down another 29% this year to date.

The post Mesoblast share price spikes amid ‘substantial reduction in operational spend’ appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow 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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