What’s weighing on the Mesoblast (ASX:MSB) share price lately?

The Mesoblast (ASX:MSB) share price is getting attention following the company’s latest capital raise. Here’s a bit more background.
The post What’s weighing on the Mesoblast (ASX:MSB) share price lately? appeared first on The Motley Fool Australia. –

Man in business attire dragging large desk behind him

The Mesoblast Limited (ASX: MSB) share price has dipped 0.43% at the time of writing and is currently trading at $2.31 a share. This compares to the S&P/ASX200 Index (ASX: XJO), which has jumped 1.75% so far today.

In fact, over the past four months the Mesoblast share price has fallen more than 40%. So what’s going on? 

Why is the Mesoblast share price going down?

Mesoblast carried out a capital-raising exercise, which was announced last week. The cash injection came just in time, as concerns about Mesoblast’s dwindling cash flow have been weighing on the company’s share price over the past few months.

On 28 February 2021, the Australian Financial Review quoted the auditor of Mesoblast’s latest results, who stated that, “material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern”.

For the 6-month period ended 31 December 2020, Mesoblast posted a loss of $33.2 million and the company’s deficit stood at US$599 million.

So what does the capital deal look like?

Mesoblast raised US$110 million issuing 60 million shares at A$2.30 in a private placement led by a US investor group.

The money will be used to keep pushing the company’s products through the necessary United States Food and Drug Administration (FDA) approvals in the second and third quarters. For example, work will continue on gaining US regulatory approvals pertaining to a back pain treatment that uses Mesoblast’s rexlemestrocel-L drug.

Funding will also be allocated toward generally progressing its remestemcel-L and rexlemestrocel-L platforms.

The business advised that it will invest in a commercial supply of remestemcel-L and continue to advance the manufacturing and development of rexlemestrocel-L.

Mesoblast share price snapshot

Mesoblast has a market capitalisation of $1.4 billion and there are presently 623.5 million shares outstanding.

Over the past year, the Mesoblast share price has climbed by 26%.

The company is a developer of medicinal treatments for severe and life-threatening inflammatory conditions. It has locations in Australia, the United States and Singapore, and has commercialised two of its products in Japan and Europe.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Gretchen Kennedy 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.

The post What’s weighing on the Mesoblast (ASX:MSB) share price lately? appeared first on The Motley Fool Australia.

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!