Mesoblast (ASX:MSB) has reported financial results and operational highlights for the period ending December 2015.
The company held cash of $120.8 million at the end of the year. It reported operating cash of US$19.8 million for the final three months of 2015, down over 25 per cent compared to the prior three months and lower than the corresponding period in the previous year.
According to the company, the reduction was in line with forecasts and the consequence of measures taken to reduce its quarterly cash burn by 20-25 per cent.
"For the six months ended 31 December 2015, the company’s loss before income tax improved by 18% ($7.9 million) as compared to the comparative period in FY2015," it said.
A 23 per cent reduction in R&D expenses was almost matched by a 22 per cent drop in management and administration expenditure.
Operational highlights for the period included progress in the recruitment of all three Tier 1 Phase 3 clinical trials, including MPC-150-IM for Chronic Heart Failure (CHF), MPC-06-ID for Chronic Low Back Pain (CLBP), and MSC-100-IV for Acute Graft Versus Host Disease (aGVHD) in children.
Its licensee in Japan, JCR Pharmaceuticals, also received full approval for the first allogeneic regenerative medicine in the country, TEMCELL HS Inj. for aGVHD in children and adults. The company is expected to launch the product in the first three months of the current calendar year with Mesoblast entitled to royalties and other payments based on sales.
Revenue of $4 million for the final three months of 2015 was down 40 per cent compared to the prior three months, which the company attributed to a decrease in interest income as a result of a higher proportion of its cash reserves being held in US dollars in line with the need to mitigate the risks associated with currency fluctuations.
R&D expenses of $12.5 million for the period compared with $17.8 million for the final three months of calendar year 2015, a decrease of $5.3 million.
"This decrease primarily reflects a reduction in expenditures of our Tier 2 products and product support costs as management reduced costs in line with our corporate strategy," said the company.
Mesoblast reported a net loss of $22.3 million for the final three months of calendar year 2015, compared with $27.9 million for the corresponding period in 2014.
Revenue of $11.5 million for the six months to the end of December was up slightly on the year before due to higher milestone revenue related to regulatory approval in Japan.
The company said it expects quarterly cash burn will continue to be 20-25 per cent lower than the previous year while still achieving timelines for "important value inflexion points" for its heart failure, back pain and rheumatoid arthritis programs.