Bell Potter Securities on Mesoblast ($MSB): Headed to the sweet spot in diabetes care. Buy, Speculative. Current price $6.45. Target price $16.00

Mesoblast (ASX: MSB) is developing a series of high margin, off-the-shelf adult stem cell products that are obtained from a single donor, commercially expanded and frozen, and subsequently used in potentially thousands of unrelated, or allogeneic, recipients at the time and place of need. Mesoblast listed on the Australian Securities Exchange (ASX: MSB) in December 2004. In December 2010, Mesoblast completed its acquisition of United States company, Angioblast Systems Inc. This strategic acquisition enabled Mesoblast to broaden its product pipeline across a wider range of clinical indications including cardiovascular, oncology, eye diseases, and diabetes, in addition to its orthopedic range of products. 

 

Bell Potter Securities has released a report on Mesoblast, giving the company a "speculative" risk rating and a $16 price target. The report states:

"In view of the substantial opportunity of MSB’s cardiovascular and Bone Marrow Transplant franchises and other pipeline opportunities in diabetes, eye diseases & orthopedic becoming more substantial, we re-iterate our positive outlook on MSB. We value Mesoblast at A$10.91 base case and A$21.60 optimistic case. Our target price of A$16.00 sits at the mid-point of our DCF range. We expect significant news flow over the next twelve months as assisting in the stock being re-rated to our target price including a) initiation of the Phase II diabetes trial; b) initiation of a pivotal trial in heart failure; c) completion of the Phase II spinal fusion trials; d) interim data from the EU Phase II trial in Acute Myocardial Infarction; e) receipt of a Special Protocol Assessment by the FDA for the BMT Phase III Trial; f) Interim data from Phase II lumbar disc repair trial and g) potential licensing announcement for the diabetes program."" 

 

Read the full report below.  

Bell Potter Securities Report on Mesoblast 1 31-2012

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