Mesoblast (ASX:MSB) share price crashes 16% to 52-week low on cash concerns

It has been another bad day for Mesoblast shares…
The post Mesoblast (ASX:MSB) share price crashes 16% to 52-week low on cash concerns appeared first on The Motley Fool Australia. –

The Mesoblast limited (ASX: MSB) share price has come under significant pressure on Tuesday.

In afternoon trade, the biotechnology company’s shares are down almost 16% to a 52-week low of $1.67.

This means the Mesoblast share price is now down 68% over the last 12 months.

Why is the Mesoblast share price crashing lower?

Investors have been selling down the Mesoblast share price today following the release of its full year results.

For the 12 months ended 30 June, Mesoblast reported revenue of US$7.45 million, down 77% year on year. Things were even worse on the bottom line, with the company posting a loss after tax of US$98.8 million for the year.

This left the company with cash on hand of US$136.9 million at the end of the period.

What else happened?

Another thing that appears to be weighing heavily on the Mesoblast share price was news that it will have to run another Remestemcel-L COVID-19 ARDS phase 3 trial in the US before being considered for emergency use approval.

This is a big blow as, not only does it push things back further, the trial comes at a significant cost to the company.

It also adds to uncertainty over the major license and collaboration agreement it has signed with Novartis. Almost a year after signing the agreement, it remains subject to certain closing conditions, including time to analyse the results from the COVID-19 ARDS trial.

Does Mesoblast have the cash to survive another year?

Perhaps the biggest weight on the Mesoblast share price are concerns that the company will need to raise funds again.

Management advised that this will depend on whether it can form strategic partnerships or restructure existing loan agreements.

In the company’s report, it commented: “Over the next twelve months in order to meet our forecast expenditure, including repayment of the Hercules debt facility, cash inflows will be required. Management and the directors believe we will achieve this given plans to complete either one or more strategic partnerships or restructure existing loan agreements, and have prepared the financial report on a going concern basis.”

“The dependency on these planned objectives indicates material uncertainty which may cast significant doubt on our ability to continue as a going concern and that we may be unable to realize our assets and discharge our liabilities in the normal course of business,” it added.

The post Mesoblast (ASX:MSB) share price crashes 16% to 52-week low on cash concerns appeared first on The Motley Fool Australia.

Should you invest $1,000 in Mesoblast right now?

Before you consider Mesoblast, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Mesoblast wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why Bubs, Harvey Norman, Mesoblast, & Regis shares are dropping

ASX 200 midday update: Harvey Norman’s record profit, PointsBet posts large loss

Which ASX shares are leading the way on the ASX 300 today?

Mesoblast (ASX:MSB) share price slides 10% following FY21 earnings
Why the Mesoblast (ASX:MSB) share price is edging higher on Tuesday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!