Health Check: Mesoblast shares sink despite $260m placement and FDA win

Mesoblast shares fall ~7% after a $260 million placement following FDA approval for its cell therapy treatment remestemcel-L in December
Atomo Diagnostics inks a five-year $5.44 million deal with Newfoundland to distribute its HIV self-test kits
Osteopore’s craniomaxillofacial and oculoplastic implants listed on Singapore’s Ministry of Health Implant Subsidy List

Dual Nasdaq-listed Mesoblast (ASX:MSB) shares have fallen ~7% today after announcing completion of a global private placement primarily to its existing major US, UK, and Australian shareholders, raising $260 million at $2.50 per share – an 11% discount to where its share price last traded.

The placement follows Mesoblast achieving US Food and Drug Administration (FDA) approval in December for its cell therapy remestemcel-L to treat paediatric graft-versus-host disease (GvHD).

Approval of remestemcel-L (branded Ryonocil) was a big deal for Mesoblast, with the US regulator previously rejecting treatment in 2020 and again in 2023, significantly delaying its commercial launch.

Mesoblast said proceeds from the placement would be used for clinical development, expansion of commercial manufacturing activities in preparation for product uptake and demand along with working capital and general corporate purposes.

“We appreciate the strong support from our shareholders as we scale up production and provide to hospitals Ryoncil, the first and only FDA-approved mesenchymal stromal cell therapeutic, to treat children with life-threatening SR-aGvHD,” CEO Dr Silviu Itescu said.

Upon approval of remestemcel-L, Itescu said the company would continue to work closely with FDA to obtain approval of other late-stage products, including Revascor (rexlemestrocel-L), for cardiovascular diseases and inflammatory pain indications.

He said Mesoblast also plans to also expanding the indications for remestemcel-L in both children and adults with inflammatory conditions.

Mesoblast was the ASX healthcare sector’s top performer for 2024 with a gain of 835%, but as Stockhead’s Tim Boreham recently noted, “the gains were off the back of a severely depressed share price”.

Atomo inks five-year distribution deal for HIV self-test kits

Atomo Diagnostics (ASX:AT1) has inked a supply deal with existing distribution partner Newfoundland Diagnostics for the distribution of its HIV self-test kits, valued at ~$5.44 million over five years.

Atomo said the new agreement, which is effective immediately and runs until June 30, 2030, granted Newfoundland exclusive distribution rights to supply its HIV self-test test in the UK and non-exclusive rights for the EU and Colombia.

The agreement comes with an upfront order for 50,000 tests, to be manufactured by Atomo during this quarter.

Newfoundland had been supplying Atomo’s HIV self-test, branded Newfoundland, in the UK and several other European countries for more than a year, with more recent expansion into markets such as Eastern Europe and Colombia under a prior agreement.

Atomo said the Newfoundland-branded product had been successfully launched in the two leading retail chains in the UK – Boots pharmacies and Tesco supermarkets – with the most recent purchase order supporting product launch in a number of Eastern European countries where HIV infection rates and demand for testing continue to grow.

Atomo’s CEO John Kelly said the company was excited about building a long-term relationship with Newfoundland.

“They have done an excellent job getting our HIV tests on the shelves of the leading retailers in Europe and this partnership gives us the perfect channel to launch other Atomo tests, including the world’s first active syphilis self-test being currently developed with funding from the Australian government,” he said.

Newfoundland CEO Frederick Manduca said the company had great success distributing the test and working with partners such as the Terrence Higgins Trust and major retailers in the UK.

“We are excited to continue this success in the coming years by furthering our distribution into new channels and international territories,” he said.

Osteopore implants added to subsidy list in Singapore

Australian-Singaporean regenerative medicine company Osteopore (ASX:OSX) has seen its craniomaxillofacial and oculoplastic implants added to the Implant Subsidy List (ISL) by Singapore’s Ministry of Health.

Osteopre said the ISL comprised implants assessed to be safe clinically and cost-effective with subsidies extended to implants on the list to encourage their use for better patient outcomes and healthcare resource utilisation.

Osteopore is focused on 3D-printed biomimetic and bioresorbable implants. The biotech said its craniomaxillofacial and oculoplastic implants, developed with advanced 3D printing technology, were specifically designed to support natural tissue regeneration.

The company noted that the implants, made from biodegradable polycaprolactone, gradually resorb into the body over 18-24 months, providing structural support as they promote bone healing.

CEO Dr Yujing Lim said the inclusion of its craniomaxillofacial and oculoplastic on the ISL was a meaningful recognition of Osteopore’s commitment to providing innovative, patient-centred solutions.

“This step by the Ministry of Health enables us to provide more patients with access to affordable, advanced regenerative treatments that facilitate natural recovery processes,” he said.

The OSX share price is up 2.86% today.