Quick take: Why Mesoblast has rallied 17% in the last 5 sessions
We unpack Mesoblast’s first quarter results in under 2 minutes.
Investors continued to bid Mesoblast (MSB) higher on Monday – with the stock up 6.59% to $3.88 by noon – building on the gains the company witnessed following the release of its Q1, FY21 update last Friday.
Mesoblast share price: Understanding what drove the rally in under 2 minutes
In particular, investors look enthused by the announcement of a global license and collaboration agreement between Novartis and Mesoblast. Under this agreement, it was noted that the companies would join forces to develop, 'manufacture and commercialization of Mesoblast’s mesenchymal stromal cell (MSC) product resentence-L.'
Commenting on this partnership, Mesoblast's CEO, Dr Silviu Itescu, said 'Our collaboration with Novartis will help ensure that remestemcel-L could become available to the many patients suffering from ARDS, the principal cause of mortality in COVID-19 infection.'
Despite renewed investor confidence, MSB posted Q1 revenues of just US$1.3 million, down significantly from Q1 FY20 revenues of US$17.0 million.
Research and development and manufacturing expenses also rose during the quarter, increasing by US$6.9 million and US$9.2 million, respectively. Increased research and development costs were driven by 'increased clinical trial costs relating to the Phase 3 trial for COVID-19 ARDS, non-cash share-based payments to employees and consultants and pre-commercial activities for remestemcel-L,' the company said.
Overall, these results culminated in MSB reporting a post-tax Q1 loss of US$24.5 million.
Despite that loss, investors appear particularly pleased with the Novartis partnership; the stock, after all, was bid 16.2% higher during last Friday’s session.
Want to take a position in Mesoblast – long or short?
Create an IG trading account or log in to your existing account to get started now.
The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.
Act on share opportunities today
Go long or short on thousands of international stocks with CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
