Meso-blasting through

Hey Superheroes,

You might be in the mood to wind down as 2024 comes to a close, but it looks like the markets just won’t let that happen! 

It’s been a rollercoaster week in the markets. On Wednesday, the Fed revealed that the U.S. is likely to see just two rate cuts next year instead of four, triggering a sharp selloff. The Nasdaq and S&P 500 both dropped over 3%, the ASX 200 slid nearly 2% and the AUD/USD exchange rate plunged to a 13-month low.

But it’s not all red – let’s look at the one ASX stock that had a massive week.

Mesoblast jumps 54% after FDA approval

If there’s an event that could add A$1 billion to a company’s market cap, Mesoblast’s example shows that all it takes is good news from the U.S. Food and Drug Administration (FDA).

Interestingly, the FDA approves new drugs nearly every week… what made Mesoblast’s case so special?

4️⃣ years in the making

For the Aussie biotech company, it was a long and arduous journey.

Mesoblast first sent Ryoncil – the drug in question – to the FDA for review in mid-2020. While the FDA’s advisory committee voted 9 to 1 in favour of recommending Ryoncil for its indication, the FDA later sent through its rejection letter while flagging the lack of a clinical trial. 

Unsurprisingly, Mesoblast didn’t give up. It took three years, but the biotech later resubmitted Ryoncil for review with new long-term trial data. 

But nope it was rejected once again, with the FDA asking for even more data.

3️⃣ times’ the charm

But yesterday, it finally happened. 

The FDA signed off on Ryoncil, allowing Mesoblast to finally be used in the treatment of Graft-versus-host disease (GVHD) for children and teenagers. 

Ryoncil is composed of cells taken from a donor’s bone marrow and delivered to the patient intravenously. According to Mesoblast’s research, Ryoncil has helped counteract some of the inflammation in GVHD.

It’s the first of its kind (i.e. “first mesenchymal stromal cell (MSC) therapy”) to be approved in the U.S. and will soon be available in U.S. transplant centres and hospitals.

😮‍💨 A close call

For the unfamiliar, Mesoblast is a dual-listed Nasdaq and ASX company with a really long history in medical research. 

Despite being founded 20 years ago, Mesoblast has yet to achieve profitability and relied on consistent equity raises to stay afloat.

Last year, its auditors raised a “going concern doubt” – in other words, they thought Mesoblast was at risk of going under.

Mesoblast is now on expanding the indications of Ryoncil to include adults, and is also working to gain approval for its other late-stage products, which include medication for cardiovascular diseases. 

🔦  Some other things we’re shining the Spotlight on:

OFF THE CHAIN: Blockchain company Digital X (ASX:DCC) has completed a $15.4m capital raise this week, in addition to the appointment of an expert advisor. This saw the share price surge 39% this week.

HELLO THERE: Next week will see three new companies join the NASDAQ 100 Index – Axon Enterprises, Palantir Technologies and MicroStrategy. 

TURKISH DELIGHT: Boeing had some good news this week thanks to a large order from low-cost Turkish airline – Pegasus Airlines of 100 new planes with a further option to buy 100 more. 

Keep up to date on the markets by following us on Instagram, @superheroau! 

This will be our last Spotlight of 2024 and we look forward to seeing you next year. Happy Holiday to all our Superheroes!