Mesoblast (ASX:MSB) Delivers 60% Jump in Ryoncil Sales, Strengthening Commercial Momentum

Mesoblast Lifts on Ryoncil Growth

Mesoblast (ASX:MSB) delivered a very strong performance this morning following a positive guidance update for Ryoncil, its cell-based therapy and the only FDA approved treatment for steroid refractory acute graft versus host disease. This is a serious and often life-threatening condition with limited treatment options, which helps explain the growing interest in the product. During the quarter, Ryoncil generated US$35.1 million in revenue, up 60% on the prior quarter.

We think this result clearly signals that demand is accelerating and that the unmet clinical need remains significant. More importantly, it reinforces the view that Ryoncil is transitioning into a meaningful commercial asset rather than just a regulatory success, which is an important shift for investors to recognise.

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Commercial Traction Building for FDA-Approved Therapy

For investors who are new to the story, it is worth stepping back and understanding what Ryoncil actually does. Ryoncil is a cell based therapy used in patients who have received a bone marrow or stem cell transplant.

In some cases, the donor immune cells begin attacking the patient’s body, leading to a condition known as steroid refractory acute graft versus host disease. This can be extremely dangerous, particularly in children. Standard steroid treatments do not work for a number of patients, and without an effective alternative, mortality rates are high.

Ryoncil works by calming the immune system rather than broadly suppressing it. The therapy is made from mesenchymal stromal cells, which release anti inflammatory signals that reduce the immune attack and help the body rebalance itself. Importantly for investors, Ryoncil is the first and only FDA approved therapy for children under 12 with this condition.

This gives Mesoblast Limited a clear regulatory and commercial advantage in a niche but critically important market, where unmet medical need remains significant.

The company also outlined several balance sheet updates, and at first glance investors are often right to be cautious when a biotech refinances debt. Taking on new debt to repay old debt can sometimes increase risk. In this case, however, Mesoblast has materially improved the quality of its balance sheet by replacing expensive and restrictive funding with cheaper and far more flexible capital.

From Lab Bench to Balance Sheet

Mesoblast secured a US$125 million facility over five years from its largest shareholder. This allowed the company to fully repay its previous senior secured loan and partially repay a royalty based debt facility.

The remaining royalty obligation will continue to reduce as Ryoncil sales grow and is expected to be fully repaid by mid 2026. In simple terms, this structure lowers the ongoing cash flow burden by reducing interest costs, which should support improving bottom line profitability over time. Importantly, the new facility does not place any security over Mesoblast’s core assets or intellectual property, preserving strategic flexibility.

Looking at the numbers, finance costs in FY25 were approximately US$22.9 million, of which around US$5 million related to interest payments.

At the same time, the company ended the period with US$161 million in cash on the balance sheet.

Taken together, we believe Mesoblast Limited is now in a relatively strong balance sheet position compared with typical biotech peers, particularly as Ryoncil continues to scale commercially and support internal funding of the business.