Troubled Mesoblast secures crucial cash buffer from surprise US backer
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Mesoblast has been given a financial lifeline that analysts expect will give it an 18-month cash buffer after the drug company secured a $138 million investment from a surprise US backer.
The ASX-listed $1.45 billion stem cell treatments maker unveiled an unexpected new partner on Tuesday, confirming it had sealed a $US110 million ($138 million) deal with a US investor group led by surgery clinics business, SurgCenter Development.
Mesoblast had been in a trading halt since Friday, when its half-year report showed it was running at a $US48.9 million half-year loss. Its auditor PwC said a private placement and future partnership payments were key to the company continuing as a going concern.
Investors in drugmaker Mesoblast sweat on crucial capital raising
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Drugmaker Mesoblast has been forced to go to the market to secure a private placement as it waits for critical milestone payments from partners to come through, having burnt through $77 million in cash in past six months.
Shares in the stem cell treatments developer were halted on Friday ahead of details of on an âannouncement by the company in relation to a proposed private placement to a targeted industry investorâ.
Later that evening Mesoblast dropped its half-year financial results that showed the business was running at a $US48.9 million loss, had $US77.5 million in cash on hand and needed cash from its existing partnerships to land âto meet our forecast expenditure and continue as a going concernâ. The firm had outflows of $US60.1 million for operating activities