Mesoblast Limited reports first-half revenue of US$51.3 million as Ryoncil commercial launch gains momentum
Biotech company Mesoblast Limited (ASX: MSB) has reported total revenue of US$51.3 million (A$78.3 million) for the six months ended 31 December 2025, marking a significant commercial transformation from US$3.2 million in the prior corresponding period. The result reflects the successful US commercialisation of Ryoncil® (remestemcel-L-rknd), the company’s FDA-approved treatment for steroid-refractory acute graft versus host disease in paediatric patients.
Mesoblast Ryoncil profits growth pipeline now positions the company as a revenue-generating biotech with expanding market penetration. Ryoncil generated gross sales of US$57.0 million during H1 FY2026, translating to net revenue of US$48.7 million after gross-to-net adjustments. The product delivered gross profit of US$44.2 million (excluding amortisation), with direct selling costs of US$7.7 million.
Dr. Silviu Itescu, Chief Executive
“Today we report strong operational and financial performance for the first half of FY2026, a period that marks an important inflection point in Mesoblast’s evolution from clinical development to sustainable commercial execution.”
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Understanding gross-to-net revenue adjustments in pharmaceutical commercialisation
The difference between Ryoncil’s gross sales of US$57.0 million and net revenue of US$48.7 million reflects standard pharmaceutical gross-to-net adjustments, which include rebates paid to government and commercial payers, discounts negotiated with healthcare providers, provisions for product returns, and chargebacks to wholesalers. These adjustments are typical in pharmaceutical commercialisation and represent the difference between list price and actual revenue received by the company.
Gross profit of US$44.2 million (excluding amortisation of intangible assets) represents the key metric for assessing Ryoncil’s product economics, demonstrating strong unit profitability after accounting for manufacturing costs but before selling expenses. Direct selling costs of US$7.7 million covered the commercial team responsible for transplant centre engagement and education.
For investors evaluating Mesoblast Ryoncil profits growth pipeline economics, the gross profit margin demonstrates that commercial revenue is now funding research and development investment rather than requiring continuous external capital.
U.S. market penetration accelerating with 49 transplant centres onboarded
Mesoblast has now onboarded 49 of 64 target transplant centres, representing 94% of transplants performed in the United States. Coverage by government and commercial payers extends to 280 million U.S. lives, including Federal Medicaid coverage through the U.S. Centers for Medicare & Medicaid Services and mandatory fee-for-service Medicaid coverage across all U.S. states.
The issuance of a specific Healthcare Common Procedure Coding System (HCPCS) J-Code on 1 October 2025 enabled simplified billing and reimbursement, resulting in growth of Ryoncil usage under CMS coverage versus commercial coverage in the subsequent quarter. Real-world clinical data shows 84% of patients completing the initial 28-day treatment regimen as per FDA approval label and remaining alive, consistent with prior clinical trial experience.
| Commercial Metric | Figure |
|---|---|
| Target transplant centres | 64 |
| Centres onboarded | 49 |
| U.S. lives covered | 280 million |
| Treatment completion rate | 84% |
Near-complete penetration of key transplant centres combined with broad payer coverage provides Mesoblast with a durable commercial foundation and supports management’s revenue guidance for the full fiscal year.
Full-year revenue guidance of US$110-120 million
Management anticipates FY2026 Ryoncil net revenue to range between US$110-120 million, implying second-half revenue of approximately US$61-71 million. This guidance reflects continued momentum in centre onboarding, payer coverage expansion, and growing physician confidence following the J-Code issuance.
Pipeline expansion targeting blockbuster indications with rexlemestrocel-L
Mesoblast operates a two-product strategy, commercialising first-generation Ryoncil (remestemcel-L) whilst developing second-generation rexlemestrocel-L for multiple large-market indications. Three major pipeline programmes are advancing towards near-term regulatory milestones.
Key pipeline programmes and timelines:
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Adult steroid-refractory acute graft versus host disease (SR-aGvHD): The final protocol design for Ryoncil’s Phase 3 trial in adults with SR-aGvHD, a population approximately three times the size of the paediatric SR-aGvHD population, has been finalised following FDA consultation. The protocol will be submitted to the Institutional Review Board in March 2026 for site initiation, supporting lifecycle extension of the Ryoncil franchise.
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Chronic discogenic low back pain (CLBP): Mesoblast’s confirmatory Phase 3 trial for rexlemestrocel-L in CLBP is enrolling its 300-patient target across 40 U.S. sites, with enrolment expected to complete in March/April 2026. FDA feedback confirmed that clinically meaningful pain reduction versus placebo at 12 months can support product efficacy, with robust opioid reduction data eligible for inclusion in product labelling. This aligns with FDA’s recent policy shift favouring single pivotal trials for product approval.
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Heart failure with reduced ejection fraction (HFrEF): Mesoblast has generated new data demonstrating that a single administration of rexlemestrocel-L during open heart surgery and device implantation reduces right heart failure hospitalisations, mortality from right heart failure, and portal hypertension with major bleeding events in end-stage patients. The company is now filing for full FDA approval (not accelerated approval) in the next quarter, which would eliminate the need for a confirmatory study if approved. Orphan Drug designation provides commercial exclusivity for this patient population.
Multiple near-term regulatory catalysts across large addressable markets create potential for material share price re-rating if trials succeed. The adult SR-aGvHD market represents approximately three times the paediatric population already served by Ryoncil, whilst CLBP and heart failure address significantly larger patient populations with substantial unmet medical need.
Financial position strengthened with US$125 million credit facility
Mesoblast reported period-end cash of US$130.0 million and secured a non-dilutive US$125.0 million five-year credit facility during the reporting period. A second tranche of US$50.0 million remains available to be drawn at the company’s option until 30 June 2026, providing financial flexibility to support pipeline advancement.
Net operating cash spend for H1 FY2026 was US$30.3 million, with management expecting reduction in net cash spend over the remainder of the fiscal period based on projected receipts from quarterly Ryoncil revenue. The non-dilutive financing structure combined with improving cash generation reduces capital risk for existing shareholders whilst funding late-stage clinical programmes.
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Path to profitability emerging as Ryoncil economics scale
Mesoblast reported a net loss of US$40.2 million for H1 FY2026, compared to US$47.9 million in the prior corresponding period. Critically, the prior year result included a US$23.0 million inventory reversal. Excluding this non-cash adjustment, the underlying improvement in net loss was US$30.7 million, demonstrating the impact of Ryoncil commercialisation on the company’s financial trajectory.
Research and development expense of US$46.2 million reflects investment in the Phase 3 chronic low back pain trial, adult SR-aGvHD programme development, lifecycle extension studies, and commercial manufacturing scale-up for rexlemestrocel-L to support upcoming Biologics License Application filings.
Key financial metrics for H1 FY2026:
- Net loss: US$40.2 million (prior period: US$47.9 million)
- Underlying improvement (excluding inventory reversal): US$30.7 million
- R&D expense: US$46.2 million
- Net operating cash spend: US$30.3 million
The loss trajectory demonstrates improving unit economics, with Mesoblast Ryoncil profits growth pipeline now generating sufficient margin to fund substantial R&D investment. As commercial revenue scales and pipeline programmes advance towards regulatory approval, the path to sustainable profitability becomes increasingly visible for investors evaluating the company’s long-term value proposition.
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