While the ASX 200 and All Ordinaries were up today, two ASX stocks were countertrending. Indicating potential to retain their strength, these recovered later in the day.
Mesoblast Limited (ASX: MSB)
Mesoblast Limited, a global leader in allogeneic cellular medicines for inflammatory diseases, has reported a productive Q1 FY25, highlighted by advancements in its key pipeline assets and strategic financial initiatives. The quarter’s standout development was the filing of a Biologics License Application (BLA) with the FDA for Ryoncil® (remestemcel-L) targeting steroid-refractory acute graft versus host disease (SR-aGvHD) in children under 12. With no approved treatments for this vulnerable population, Ryoncil represents a critical unmet need. The FDA has conducted a pre-license inspection with no Form 483 observations, and Mesoblast anticipates a decision by January 7, 2025. Supply chains and inventories are already in place for immediate distribution post-approval, with a targeted rollout strategy focusing on high-volume pediatric centers.
To support the commercial launch of Ryoncil, Mesoblast secured a $50 million convertible note facility with its largest shareholder, available at the company’s discretion upon FDA approval. Fiscal discipline remains a key focus, with Q1 FY25 net operating cash spend reduced to $10.5 million, a 26% YoY decrease, driven by re-prioritization of projects and cost-containment measures. Significant progress was also achieved for Revascor® (rexlemestrocel-L). For pediatric congenital heart disease, the FDA granted Rare Pediatric Disease and Orphan Drug designations for Revascor to treat hypoplastic left heart syndrome (HLHS). Clinical trials demonstrated significant left ventricular growth, supporting improved surgical outcomes. The company plans regulatory engagement to advance approval pathways.
In chronic heart failure (HFrEF), the FDA supports an accelerated approval pathway for Revascor in end-stage patients reliant on LVADs, following robust trial data. Mesoblast is preparing for further discussions to align on regulatory expectations and timelines. The chronic low back pain program progressed with the initiation of a Phase 3 confirmatory trial for rexlemestrocel-L. The trial targets pain reduction and opioid cessation, addressing a major contributor to prescription opioid use in the U.S. With $51.1 million in cash as of September 30, 2024, and access to an additional $60 million pending Ryoncil’s approval, Mesoblast is well-positioned for near-term FDA decisions and commercial execution. The company’s focused strategy aligns fiscal prudence with progress on key programs, setting the stage for transformative milestones.
BrainChip Holdings Limited (ASX: BRN)
BrainChip Holdings Limited (ASX: BRN) recently announced a fourth amendment to its Put Option Agreement (POA) with LDA Group, which will extend the funding arrangement until June 2026. This extension increases the total commitment amount under the POA to AUD $140M, with approximately AUD $68M already drawn since its inception in August 2020. As part of the new terms, BrainChip will access an additional AUD $20M minimum drawdown, with 40 million Collateral Shares to be issued by June 2025. The capital raised will support the continued development of Akida 2.0 products and further commercial efforts, especially in expanding the TENNs model portfolio in response to increasing customer engagement. However, BrainChip's share price declined today, primarily due to concerns over dilution, as the issuance of 40 million Collateral Shares could potentially dilute the value of existing shares.
BrainChip secured a significant licensing agreement with Frontgrade Gaisler, a provider of radiation-hardened microprocessors for space applications. The agreement involves licensing BrainChip's Akida 1.0 Neuromorphic AI IP to integrate into Frontgrade’s space-grade systems for AI acceleration. This partnership follows successful evaluations under the European Space Agency's (ESA) program, which demonstrated the superiority of neuromorphic technology in space applications. The deal includes a 10% royalty on the net sale price of Frontgrade’s first licensed product and additional options for future product licensing. The collaboration highlights the growing demand for neuromorphic AI in edge applications with power, mass, and volume constraints, particularly in space missions.
Additionally, BrainChip has been awarded a US$1.8M contract from the Air Force Research Laboratory (AFRL) as part of the Small Business Innovation Research (SBIR) program. The contract focuses on developing radar signal processing algorithms optimized for BrainChip’s neuromorphic hardware, specifically targeting micro-Doppler signature analysis for military and commercial applications. The project, which builds on earlier demonstrations, will utilize BrainChip's proprietary TENNs algorithm framework and Akida 2.0 hardware. This collaboration underscores the increasing adoption of neuromorphic computing for high-performance, low-power solutions in mission-critical sectors, such as defense and aerospace.
Source: Company’s Report
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