What’s Going on with the Mesoblast Share Price?

What happened to the Mesoblast share price?

If you’ve ever wondered about the potential hazards of investing in a biotech during the clinical phase, then Mesoblast [ASX:MSB] might give you pause for thought. In 2011, the share price hit an all-time high of just over $10. Now the share price is fighting to stay above $1.00.

Why did MSB Shares do this?

Mesoblast specialises in an area of molecular biology called regenerative medicine. As the company describes, the goal is to ‘target advanced stages of diseases with high, unmet medical needs.’ Things like heart disease, orthopaedic, oncology and hematology diseases.

The aim is to manage these conditions by regrowing, replacing and engineering cells and tissues back to their original condition. It goes without saying that it’s a highly specialised field. There’s a huge amount of R&D, not to mention a series of clinical trials to be passed, before any product is ready for market.

Unfortunately for Mesoblast, Teva — its partner in trials treating advanced heart disease — decided to pull out of the venture. As Teva was responsible for much of the funding, this leaves a potential hole in the funds required to get the product to market.

What now for Mesoblast?

The market will now be watching closely to see if, and how, Mesoblast can fund the rest of the trial. Whether that’s off its own back, or through a tie-up with another party. For the moment, it’s keeping its cards close to its chest.

Until there is certainty on future funding, the share price is likely to remain under pressure. Of course, any significant breakthrough on both funding, and results of the trial, could see the share price soar.

Matt Hibbard,
Money Morning

Money Morning Australia