On Wednesday, Mesoblast Ltd (NASDAQ: MESO) released its FY23 results, reporting revenues of $7.5 million, a decrease from $10.2 million in FY2022. While falling short of the consensus estimate of $7.97 million, the company did report a narrower EPS loss of $(0.11), surpassing the consensus estimate of $(0.57).
Despite the mixed results, Cantor Fitzgerald, a prominent analyst firm, reiterates an Overweight rating but has reduced the price target from $23 to $17 in response to a lowered probability of success for MESO’s pipeline assets.
A recent setback for Mesoblast came in the form of an FDA complete response letter, which requested additional data for resubmission of remestemcel-L for pediatric steroid-refractory acute graft versus host disease (SR-aGVHD).
Despite these challenges, the team at Cantor Fitzgerald, including analysts Louise Chen, Carvey Leung, Wayne Wu, and Lucas Olson Duffy, remain optimistic about Mesoblast’s late-stage pipeline of cellular drugs for inflammatory diseases. They see great potential for remestemcel-L and believe that the company’s advancements in the pipeline will lead to stock growth.
One key factor for Mesoblast’s success will be demonstrating the consistency of its product in terms of safety and efficacy. The company may also gain advantageous RMAT designation (for regenerative medicines) for more of its products, which could accelerate the development timeline.
Despite the reduced price target, MESO shares are currently up 12.60% at $1.61.
