Mesoblast Limited

Financing partnership with Hercules: Mesoblast Limited (ASX: MSB) has entered into a US$75 million non-dilutive, four-year credit facility with the leading specialty finance company, Hercules Capital, Inc. MSB has indicated to use the proceeds towards funding the commercialization of MSC-100-IV (remestemcel-L) on the product candidate successfully meeting its Phase 3 trial’s primary endpoint of Day 28 overall response in children with steroid refractory acute Graft versus Host Disease (aGVHD). Further, some portion of the facility will be used for additional late stage product candidates including MPC-150-IM in patients with Class II/III advanced chronic heart failure, and in end-stage Class III/IV heart failure patients with left ventricular assist devices (LVADs), and MPC-06-ID in patients with chronic low back pain due to degenerative disc disease. With different set of tranches planned for withdrawal throughout CY19, the group is trying to leverage its potential for further business opportunities involving all of its Tier 1 product candidates in order to maximize shareholder value. MSB stock was up about 5% on March 07, 2018 and is worth a watch while we have a “Hold” recommendation on the stock.
 

Simavita Limited

Lower than expected half year performance dragging the stock lower: Simavita Limited’s stock plunged about 23% on March 07, 2018 at the back of a not so encouraging half year result released at the end of February 2018. The group is attracting negative sentiments lately as its total revenue from ordinary activities for the reporting period of $476,531, represented a decrease of 55% compared to $1,050,710 in the previous corresponding period. On the other hand, the total comprehensive loss attributable to members for the period was $2,507,234, down 43% from $4,408,038 in the previous corresponding period with a 34% reduction in operating expenses. The group did not pay any dividends during or after the reporting period and has no dividend reinvestment plans in operation. It is worth noting that elimination of the direct sales strategy in favor of its PIVOT strategy of focused sales through partnerships with companies with significant and synergistic sales, has led to the fall in revenue. While the group is targeting the market focussing on elderly and disabled people, the performance has not been up to the mark. We have a “Hold” position at the current price.

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