Mesoblast Ltd (ASX: MSB) shares are having a strong finish to the week.
In morning trade, the biotechnology company's shares are up 10% to a 52-week high of $3.30.
Why are Mesoblast shares jumping?
Investors have been buying the allogeneic cellular medicines developer's shares this morning following the release of a sales update.
According to the release, Mesoblast generated gross revenue of US$35.1 million on Ryoncil (remestemcel-L-rknd) sales for the quarter ended 31 December 2025. This represents a 60% increase on the prior quarter ended 30 September.
Mesoblast's Ryoncil product is used for the treatment of steroid-refractory acute graft versus host disease (SR-aGvHD). It is the first mesenchymal stromal cell (MSC) product that has been approved by the U.S. Food and Drug Administration (FDA) for any indication.
The product is the only FDA-approved product approved for children under age 12 with SR-aGvHD, and will now be evaluated in a pivotal trial as part of a second-line regimen for adults with SR-aGvHD. Management notes that this is a market approximately three times larger than the paediatric market.
Balance sheet strength
Mesoblast notes that the increase in quarterly revenue continues to strengthen its balance sheet.
This is being supported by its entry into a US$125 million facility with its largest shareholder, which substantially lowered the company's cost of capital and freed up its major assets to provide flexibility for strategic partnerships and commercialisation.
It notes that the new facility has enabled Mesoblast to repay in full its prior senior secured loan.
The new US$125 million five-year interest-only facility has a substantially lower overall cost compared with previous facilities, can be repaid at any time without incurring early prepayment or make-whole fees, does not include exit fees, does not encumber any of Mesoblast's material assets or intellectual property, and has no restrictions on additional unsecured debt or licensing activities.
Additionally, the company has partly repaid its subordinated royalty facility which will continue to reduce from ongoing revenue and will be fully repaid by mid-2026.
Commenting on recent developments, Mesoblast's chief executive, Dr. Silviu Itescu, said:
Our strong balance sheet, continued growth in quarterly sales of Ryoncil, and a new lower-cost financing facility provides greater flexibility for strategic partnerships and pursuit of label expansion for Ryoncil.
Following today's gain, Mesoblast shares are now up by a sizeable 105% over the past six months.
The post Why are Mesoblast shares jumping 10% to a 52-week high? appeared first on The Motley Fool Australia.
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