On Thursday, Mesoblast Limited (NASDAQ: NASDAQ:MESO) saw its price target increased to $15.00 from $11.00 by Piper Sandler, while the firm kept its Overweight rating on the stock.
The adjustment comes in response to the recent FDA approval of Ryoncil (remestemcel-L) for pediatric steroid-refractory acute Graft vs. Host Disease (aGvHD). This approval was granted three weeks before the anticipated Prescription Drug User Fee Act (PDUFA) date of January 7.
Ryoncil's authorization marks a significant milestone as it is the first FDA-approved mesenchymal stromal cell (MSC) therapy. The treatment is expected to address a critical need, as approximately 1,500 American children undergo allogeneic stem cell transplant (ASCT) annually, with about half of these patients not responding to steroids when they develop aGvHD.
Piper Sandler projects that Ryoncil will generate revenues of $12 million in 2025, with expectations of growth to $35 million in 2026 and a substantial increase to $150 million by 2032. The pricing strategy for Ryoncil is aligned with its status as a therapy for an ultra-orphan disease, which typically commands a premium due to the rarity and specialized nature of the treatment.
Following the FDA's approval, Mesoblast is planning to initiate a single-arm Phase III confirmatory trial of Ryoncil in third-line adult aGVHD. Financially, Mesoblast concluded the fiscal year 2024 with a cash balance of $63 million and a debt obligation of approximately $114 million. The recent regulatory nod also makes Mesoblast eligible to borrow up to $50 million in convertible debt to further its business objectives.
The increased price target from Piper Sandler reflects the anticipated value Ryoncil will bring to Mesoblast's portfolio and the potential for revenue growth due to its pioneering status in the MSC therapy space.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.