Mesoblast

Adult stem cells retain the ability to differentiate into various tissues of the body. Unlike embryonic stem cells, those from adult tissues are restricted in the number of different tissues that they can become. A subset of adult stem cells termed Mesenchymal precursor cells (MPCs) is able to transform into tissues including bone, cartilage, and heart. MPCs have been shown in clinical and preclinical trials to improve function in a variety of orthopedic and cardiovascular diseases.

Mesoblast uses the earliest and rarest progenitor stem cell found in the adult called a Mesenchymal Precursor Cell (MPC) which has the ability to differentiate into a wide variety of tissues including bone, fat, heart, cartilage and other Mesenchymal lineages.

Mesoblast aims to generate a series of high margin stem cell products that are obtained from a single donor, commercially expanded and frozen, and subsequently used in potentially thousands to hundreds of thousands of unrelated, or allogeneic, recipients at the time and place of need.

Mesoblast’s technology positively selects for a starting population of MPCs which is more than 1000-fold purer than that of its competitors. Mesoblast’s MPCs have been shown in clinical and preclinical studies to both create new blood vessels and stimulate cells at the site of damage to repair themselves, as well as providing functional cells to the region of tissue in need of repair. Because MPCs do not provoke an immune reaction, Mesoblast is developing allogeneic (unrelated recipient) stem cell products for treatment of various medical conditions, including cardiovascular and neurological diseases, diabetes and eye diseases as well as bone and cartilage degeneration. These are all rapidly growing, billion dollar markets.

The United States Patent and Trade Mark Office (USPTO) has granted key patents in the United States that deliver major commercial advantages and offer long term protection for the company’s platform technology including a foundation patent for composition-of-matter, or ownership, over the MPCs; exclusive commercial protection for Mesoblast’s bone tissue generating products; and manufacturing patents covering methods of purifying, isolating and enriching the MPCs. Additional patents have been filed covering specific uses of the companies’ biologic products that considerably extend the duration of patent protection. Patents are the lifeblood of the Company, and granting of patents in various jurisdictions protects our commercial rights and ensures we have freedom to operate commercially. Mesoblast is committed to the ongoing expansion, broadening, and development of its Intellectual Property portfolio.

The new provisions for biosimilar biological products within the United States Patient Protection and Health Care Affordability Act, which was signed into law 23 March 2010, provide Mesoblast with the potential to significantly extend commercial exclusivity for its cell therapy products in the United States well beyond initial patent expiration dates. This will serve to significantly increase long-term revenue projections and to facilitate strategic business partnerships.
The Act will facilitate a material increase in the long-term for Mesoblast for its biologic products in the United States, the world’s largest market for regenerative medicines. Of particular relevance is a key provision in the Act, which provides a biologic innovator with long-term exclusive market protection of its approved product against abbreviated approval of biosimilar biologic products by the United States Food and Drug Administration (FDA). A biosimilar product is deemed to be interchangeable with an already approved reference biologic based upon highly similar analytical studies, and clinical trials that demonstrate safety, purity and potency for the same indication. The Act explicitly prohibits FDA approval of a biosimilar until 12 years after the date on which the reference biologic product is first approved. It further stipulates an additional six months of exclusivity for the use of reference biologic products in the paediatric population. In addition, under the Act the innovator may receive a further 12 years of exclusivity from the date of approval of any subsequent biologic product which has a structure that has been modified to result in a change in safety, purity, or potency of the reference biologic. Maintaining commercial exclusivity for its biologic products through a robust international patent portfolio is fundamental to Mesoblast’s commercial strategy.

Initially Mesoblast is developing adult stem cell products for degeneration of the cardiovascular and central nervous systems, degenerative disc disease, cartilage regeneration, diabetes, bone defects, eye diseases and for bone marrow transplantation in cancer patients. These are markets with inadequate or absent therapies.

The aging population and active lifestyles among all age groups inevitably result in increased numbers of heart attacks, bone breaks, knee injuries, strokes and so on. Advances in medicine have meant that many patients survive what would once have been a fatal condition, but very often, their quality of life suffers after such acute injuries. In addition, the first heart attack or severe fracture can put the patient at an increased risk of developing secondary complications. Mesoblast aims to lower the risk of such complications and improve the quality of life.

No, although use of the patient’s own cells is one way of delivering the treatment. One of the problems with this approach is the time taken to grow enough of the patient’s cells from the relatively small number that can be collected from the body. A second disadvantage would be the cost of individualized therapy. Additionally, as people age they have lower numbers of MPCs and the cells are less effective. For these reasons, Mesoblast is developing ‘off-the-shelf’ products based on MPCs derived from healthy 20-30 year-old universal donors.

MPCs from unrelated donors have the unique ability of not stimulating an immune reaction when introduced into the patient. MPCs from donors can be grown in large numbers and made available for treatment in much the same way as a drug. Mesoblast’s MPCs have a strong safety profile with no cell-related adverse events to date.

Adult stem cells are more differentiated, meaning that they have less capacity than embryonic stem cells to grow and divide out of control (and possibly lead to the formation of tumors). Furthermore, adult stem cells are less likely to transform spontaneously into unwanted tissue types. Importantly, the use of adult stem cells overcomes the ethical concerns associated with embryonic stem cells.

The adult stem cells become specialised by responding to local stimuli and signals from the injured tissue. In addition, MPCs secrete biochemical factors that induce the body’s own tissue or cells to grow and regenerate, effectively shrinking the injury.

MPCs are found in small numbers in various organs and tissues, including dental pulp, skin, fat and bone marrow. They make up less than 0.01% of the cells in bone marrow.

Cells are removed from bone marrow in a simple bone marrow aspiration procedure. The MPCs are then purified from the mixed bone marrow population by mixing them with magnetic monoclonal antibodies that only bind to MPCs. The MPCs are separated from other cell types by a magnet. To obtain enough cells for a therapeutic effect, the MPCs are grown in the laboratory in a special medium that allows them to divide, but not to differentiate. Mesoblast is able to grow billions of cells from a single donor within six to eight weeks. There are multiple delivery systems including via catheter injection to the heart or an arthroscopic procedure for bone repair. The MPCs can also be coupled to a patch or biomaterial for cartilage regeneration.

The MPCs have certain innate homing abilities due to their ability to move towards signals that are secreted following injury.

There are no ethical or moral issues surrounding embryo creation and destruction associated with adult stem cells. Adult stem cells are obtained in a safe manner from adults and do not pose any significant risks.

The technology was based on 10 years’ pioneering work conducted at the Institute of Medical and Veterinary Science (IMVS) and the Hanson Institute in South Australia.

Mesoblast is another term for mesoderm, the middle cellular layer of a developing vertebrate that gives rise to muscle, bone, cartilage, blood and connective tissue.

Clinical trials are research studies that test medical therapies for human use. Each study answers a particular medical question to prevent, screen for, diagnose or treat a disease. Before any product can be approved for use in the general public, a number of clinical trials must be conducted to show that the treatment is safe and effective. The information gained from clinical trials helps to improve medical care and contributes to the understanding of diseases and conditions (for example, how a disease progresses or how it affects different systems in the body).

That depends on the trial in question. Every clinical trial is conducted according to an approved protocol, which includes specific eligibility criteria that people must meet in order to be eligible for the trial. Eligibility criteria are also known as inclusion and exclusion criteria. Examples of eligibility criteria include:

• Generally, people must have been diagnosed with a specific medical condition or injury to be eligible for a trial, and there will often be restrictions related to the severity of the condition or injury.
• Normally only people within a specified age group will be eligible. Children and elderly people are often excluded from trials, especially in the early stages of research.
• There are normally restrictions related to other diseases that people may have, and other medications they may be taking.
• Pregnant and breastfeeding women are normally excluded, and women of child bearing potential are generally required to use a reliable method of contraception for a specified period of time.

There is a limit to the number of people who can enroll in any trial. This varies depending on the nature of the trial – for example in the early stages of research, trials may only require 12 to 24 participants, whereas in later stages, trials can involve many hundreds of participants. Once the specified number of participants has been enrolled in a trial, it is normally not possible to enroll anyone else.

Before someone can participate in a clinical trial, they must provide informed consent. They are given information about the trial and an opportunity to discuss it with medical staff, and then they are asked to sign a consent form if they wish to participate.

After giving informed consent, participants must attend one or more screening visits at a clinic or hospital, at which they will undergo a number of tests and answer questions on their condition and medical history. This will help establish if they are eligible for the trial.

If a person is eligible for a trial and agrees to participate, they will receive treatment according to the trial protocol and attend a clinic or hospital for follow-up tests at defined times over the duration of the trial. Each clinical trial can only take place at specifically approved clinics or hospitals, so it may not be possible for people to participate in a trial in their local area.

In many cases, clinical trials are “randomized” and compare at least two different treatment options. Most of Mesoblast’s clinical trials compare adult allogeneic Mesenchymal Precursor Cell (MPC) treatments with a “control” treatment, which is generally the treatment that someone would receive if they did not participate in the trial. This means that people who participate in our clinical trials are not guaranteed to receive treatment with MPCs. This is necessary to ensure that independent medical investigators can evaluate the safety and effectiveness of our treatments in a fair and unbiased way.

Possible benefits:

• You might gain access to new research treatments before they are widely available.
• You will receive extensive medical care associated with the clinical trial.
• You will help others by contributing to medical research.

Possible risks:

• There may be unpleasant,serious or even life-threatening side effects to experimental treatment.
• The experimental treatment may not work.
• You may be placed in the control group and not receive the experimental treatment.
• You may need to visit the hospital or doctor’s room more frequently, stay there longer and undergo more tests.

Only people who meet all of the eligibility criteria for the trial can be enrolled. There is a doctor in charge of each trial, who is known as the Principal Investigator. The Principal Investigators in charge of our trials are not Mesoblast employees; they are independent experts.

The Principal Investigator is responsible for deciding whether people are suitable for a trial, and Mesoblast has no influence over those decisions. Therefore, Mesoblast cannot enroll people directly into our clinical trials.

People who are interested in enrolling in clinical trials should generally discuss it with their doctors, who can then refer them to the Principal Investigator of a trial if appropriate.

Please note that we are unable to respond to enquiries from the public about participation in our clinical trials or treatment with our products.

Enrollment in clinical trials is overseen by the doctors in charge of the clinical trial sites, not Mesoblast. Patients should discuss their medical condition and treatment options with their doctor.

Mesoblast is currently running a number of clinical trials using allogeneic or universal donor Mesenchymal Precursor Cells.
Details of all Mesoblast trials can be found by clicking here.

Mesoblast has a Level I American Depositary Receipt (ADR) facility trading in the Over-The-Counter (OTC) market in the U.S. and is managed by BNY Mellon. The ADR Ticker (Symbol) is MBLTY

An ADR is a negotiable U.S. certificate representing ownership of shares in a non-U.S. corporation. ADRs are quoted and traded in U.S. dollars in the U.S. securities market. Also, the dividends are paid to investor in U.S. dollars. ADRs were specifically designed to facilitate the purchase, holding and sale of non-U.S. securities by U.S. investor, and to provide a corporate finance vehicle for non-U.S. companies. ADRs can be held in book-entry form or as a physical certificate.

Level I Depositary Receipts are traded in the U.S. OTC market with prices published in the “Pink Sheets” and on some exchanges outside the United States. Establishment of a Sponsored Level I program does not require full SEC registration and the company does not have to report its accounts under U.S. GAAP or provide full SEC disclosure. Essentially, a Sponsored Level I Depositary Receipt program allows companies to enjoy the benefits of a publicly traded security without changing its current reporting process.

U.S. investors generally prefer to purchase ADRs rather than ordinary shares in the issuer’s home market because ADRs trade, clear and settle according to U.S. market conventions. One of ADRs’ main advantages is the facilitation of diversification into foreign securities. ADRs also allow easy comparison to securities of similar companies as well as access to price and trading information. ADR holders also appreciate U.S. dollar dividend payments and receiving corporate action notifications.

ADR issuers generally have full information in English about themselves on their websites, as well as on the main depositary bank websites, and are tracked by the main U.S. financial websites.

BNY Mellon is the depositary bank and plays a key role in the process of issuance and cancellation of ADRs. BNY Mellon also maintains the ADR holder register and distributes the dividends in U.S. dollars. In addition, BNY Mellon is a DTC (Depositary Trust Company) participant as are brokers & dealers, other banks, trust companies and clearinghouses. For additional general information, please visit BNY Mellon’s website at www.adrbnymellon.com and search for Mesoblast’s ADR profile.
U.S Shareowner Services
BNY Mellon Shareowner Services
P.O. Box 358516
Pittsburgh, PA 15252-8516
Toll Free # for Domestic Calls: 1 888 BNY ADRS or – 1888 269 2377
Number for International Calls: 1 201 680 6825
Email: shrrelations@bnymellon.com
Website: www.bnymellon.com/shareowner

An ADR (American Depositary Receipt) is a negotiable certificate issued by a depositary bank representing a specific number of shares of a non-U.S. company traded on a U.S. stock exchange. An ADS is the share issued under the ADR agreement which is actually traded.

Yes.

Converting ordinary shares into ADRs must be done through a broker or an investment advisor. Alternatively contact BNY Mellon for further assistance with this.

No.

A registered holder is one whose name appears on the books of the depositary. The registered holder is considered the owner of the record. A beneficial holder is one whose holdings are registered in a name other than his or her own, such as the name of a broker, bank or nominee.

For registered owners ownership is registered by the depositary bank and is evidenced by an account statement, provided by the depositary. Registered owners hold physical ADR certificates issued by the Depositary Bank and receive dividends, and proxy materials directly from BNY Mellon.

Owners of Mesoblast ADRs that are registered in the “nominee name” or “street name” of a bank, broker or other institution that holds such securities for the accounts of others are considered beneficial owners. ADRs held in this form are book-entry securities, where the beneficial owner’s interest is recorded in an account held by the institution rather than by registration with the ADR depositary. Major benefits of book-entry ownership are the elimination of problems associated with paper certificates such as storage, safety of securities or cost and inconvenience of replacement.

Book-entry ADRs eliminate the requirement for physical movement of certificates at the time of sale or transfer of ownership. Investors purchasing ADRs through a broker who wish to become registered owners must specifically direct the broker to register the shares with the ADR depositary. If you choose to have a certificate issued, please contact BNY Mellon.

For those holders who are not registered because their shares are held through a “Street name” (nominee account), please contact your nominee for information on your ADR holdings.

Your Mesoblast ADR represents your ownership of shares in the company and can be held in certificate or book-entry form. If you hold your ADRs in certificate form these should be kept in a safe-deposit box or secure place. Certificates are negotiable documents and should be signed only in the event of a sale or transfer of ownership. If you hold your ADRs through a “Street Name” (nominee account) these will be in book-entry form and therefore you will not have an ADR certificate.

You will receive account statements following each investment activity. You will also receive a statement at the end of the year showing all year-to-date transaction activity. You should retain these statements for tax purposes.

It is important that you contact BNY Mellon Shareowner Services when you move so that your account records can be updated and your dividend check is sent to the right address.

Resident Canadian ADR shareholders will receive their dividends in U.S. dollars.

Dividends are paid in U.S. dollars and are generally taxable, just like dividends on U.S. shares.

You can request the replacement of a lost dividend check by calling BNY Mellon. Upon authorization from you, a stop payment order will be placed against the original check and a replacement check will be issued to you. Please have your Social Security Number ready when calling.

For the most current Mesoblast ADR dividend information you can call BNY Mellon. Please have your account number, exact address, and exact name(s) on the account ready when you call. You can also refer to BNY Mellon’s website and double click on the “Dividends and Distributions” section.

Mesoblast provides the same financial information to all investors and conforms to all laws in the U.S. on disclosure pertinent to Level I ADRs.