One-glance verdict
Not enough data
Fair value unavailable
Not enough cash-flow history to value this one with our method.
Fundamentals snapshot
Mesoblast Limited
MESO · NMS · Healthcare · Biotechnology
Current price
$15.12
52-week range
$13.05 - $21.50
Market cap
$1.96B
Balance sheet
Distressed
-2.58x Concerning
Net debt $24.42M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
2 Risks
1 rewards · 2 risks
- Reward Revenue grew 599.2% last year.
- Risk Net debt grew 75.4% over 3 years.
- Risk Return on equity was -9.9% last year — the company lost money on shareholders' equity.
What this company does
Mesoblast Limited
Mesoblast is a biotechnology company developing new medicines from special human cells to treat serious conditions like heart failure and chronic back pain. Because its potential drugs are still being tested and are not yet for sale, the company's money comes from funding partnerships and investors, not from product sales. The company's future value depends on whether its clinical trials (the required safety and effectiveness tests for new drugs) are successful, which could lead to valuable new therapies for patients.
How the company got here
Mesoblast was founded in Australia in 2004 by Dr. Silviu Itescu, a pioneer in cellular medicines, to develop treatments for various diseases using a special type of stem cell. A key moment was listing on the Australian Securities Exchange in 2004 and later on the Nasdaq in the U.S. in 2015, which helped fund its research. The company has focused on using what it calls mesenchymal lineage cells, taken from the bone marrow of healthy donors, to create 'off-the-shelf' therapies that don't require donor-patient matching. A major turning point was gaining its first product approval in Japan in 2016 for treating a complication of transplants. More recently, the company achieved a significant milestone with the U.S. FDA (Food and Drug Administration, the agency that approves new medicines) approval of its product, Ryoncil.
What it actually does
Mesoblast is a biotechnology company that creates medicines from specialized cells found in the bone marrow of healthy adult donors. Think of it like this: they take these rare cells, which are good at repairing tissue and calming down inflammation (the body's response to injury or infection), and multiply them in a lab to create thousands of doses. These doses are then frozen and shipped to hospitals to be given to patients suffering from severe diseases where inflammation is a major problem. Because these cells don't trigger a rejection from the patient's body, they can be used 'off-the-shelf' for many different people, unlike a traditional organ transplant that needs a perfect match.
Product Sales
This is the company's main way of making money right now. Mesoblast sells its approved drug, Ryoncil, which is used to treat children with a severe complication from bone marrow transplants called steroid-refractory acute graft versus host disease (SR-aGVHD), where the body's immune system attacks itself. Hospitals and transplant centers in the United States buy this therapy for their patients. This part of the business is new but represents the most significant source of revenue (the money a company brings in from sales) for the company.
Royalties and Milestone Payments
Mesoblast also makes money by partnering with other pharmaceutical companies in different parts of the world. For example, it has a deal with a company in Japan that sells a similar cell therapy product and pays Mesoblast royalties (a percentage of sales). It also has partnerships in Europe and China for its potential treatments for chronic low back pain and heart failure. These partners pay Mesoblast for achieving certain goals, like getting approval to start a new clinical trial (a study to test a new drug on people), which are known as milestone payments.
What management is betting on now
Management's top priority is to increase sales of its newly approved drug, Ryoncil, in the United States. They are also working to get Ryoncil approved for adults with the same condition, which would create a much larger market for the drug. Beyond that, the company is heavily invested in its late-stage clinical trials for two other major potential products. One is a treatment for chronic low back pain caused by disc problems, and the other is for patients with chronic heart failure, both of which could treat millions of patients if successful.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value — vs current price $15.12
We couldn't calculate a fair value right now.
Is it drowning in debt?
Distressed
Net debt $24.4M. Interest coverage -2.6x.
Net debt
$24.42M
Interest coverage
-2.58x
Mesoblast Limited's profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 4 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
MESO
BASELINE
Mesoblast Limited
Total debt $127.33M Interest coverage -2.58x This is the baseline the peer rows are being compared against.
Total debt $93.13M Interest coverage 17.53x This peer still has a real interest-payment cushion, while MESO does not.
Total debt $1.06B Interest coverage -17.25x Neither company has much profit cushion over interest right now.
Total debt $73.41M Interest coverage -15.10x Neither company has much profit cushion over interest right now.
Total debt $247.36M Interest coverage -8.77x Neither company has much profit cushion over interest right now.
Total debt $79.01M Interest coverage -192.50x Neither company has much profit cushion over interest right now.
What you should know
The case for and against MESO
1 Reward
2 Risks
Rewards
-
Revenue grew 599.2% last year.
Risks
-
Net debt grew 75.4% over 3 years.
-
Return on equity was -9.9% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
33.23x
P/B
3.45x
P/S
16.33x
EV/EBITDA
-44.64x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
80.0%
Operating margin
-33.3%
Net margin
-47.8%
ROE
-9.9%
ROA
-4.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.22x
Current ratio
2.44x
Quick ratio
1.98x
Total debt
$127.33M
Total cash
$102.91M
Growth
How the business has been compounding
Revenue TTM
$120.25M
Revenue 5Y CAGR
152.1%
EPS TTM
-0.44
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$-49.95M
Free CF TTM
$-44.73M
FCF margin
-37.2%
Dividend
Shareholder payout
Yield
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Payout ratio
0.0%
Last ex-div date
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