MESO

Hello, and welcome to the Mesoblast financial results for the half year ended December 31, 2025. An announcement and presentation have been lodged with the ASX and are also available on the Home and Investor pages at www.mesoblast.com. [Operator Instructions] As a reminder, this conference call is being recorded. Before we begin, let me remind you that during today's conference call, the company will be making forward-looking statements that represent the company's intentions, expectations or beliefs concerning future events. These forward-looking statements are qualified by important factors set forth in today's announcement and the company's filings with the SEC, which could cause actual results to differ materially from those in such forward-looking statements. In addition, any forward-looking statements represent the company's views only at the date of this webcast and should not be relied upon as representing the company's views of any subsequent date. The company specifically disclaims any obligations to update such statements. With that, I would like to turn the call over to Paul Hughes.

Thank you. Welcome, everyone, to the Mesoblast financial results call for the period ending 31 December 2025. My name is Paul Hughes. I'm Head of Corporate Finance and Investor Relations. In the room with me today is our CEO, Silviu Itescu; our CFO, Jim O'Brien; and our CCO, Marcelo Santoro. We have a presentation to run through highlighting the financial results and the operations for the period, and then we'll have some time for questions at the end. So now I'll hand over to Silviu to begin.

Thank you, Paul. We could go to Slide 4, please. This slide highlights the corporate priorities for 2026. We intend to continue to show strong growth in Ryoncil sales driven by market adoption. We will build a strong cash flow with judicious use of funds for operations and an optimal capital structure. Cultural transition is critical so that we can move to an efficient commercial organization. We will expand Ryoncil label indications and obtain approval -- seek to obtain approval for remestemcel-L products, our second-generation platform. Our manufacturing focus will seek to increase diversification, capacity and cost efficiency for our platforms, and we will continue to focus on appropriate commercial partnering backed by demonstrable value drivers, including FDA approvals, strong revenues and advanced clinical programs. Next slide, please. This year was marked by a very successful product launch. We initially received FDA approval for Ryoncil in December 2024. Ryoncil is the first and only FDA-approved allogeneic mesenchymal stromal cell product. The product was launched in April of 2025 with revenues growing quarter-on-quarter. There is significant unmet need for continued uptake and increasing market adoption. And our net revenue from Ryoncil was USD 49 million in the first half of FY '26. Next slide, please.

Thanks, Silviu. Jim will take us through the financial slides. Thanks, Jim.

Thank you, Paul. Hi, everybody. I'd like to now review our first half fiscal 2026 operating results. And I should mention that all figures are in U.S. dollars. Total revenues for the period were $51.3 million, driven by the successful launch of Ryoncil. Our net product revenues, as Silviu mentioned, were $49 million, and we had a gross margin of a strong 93%. Our R&D expenses for the period were $46.1 million (sic) [ $46.2 million ] compared to what we reported last year of $5.1 million. Now last year's numbers were a bit skewed because we had a $23 million reversal of the inventory provision once we got approval of Ryoncil. Without that adjustment, the prior year number would have been about $18.1 million. So -- I'm sorry, we would have grown about $18.1 million over the prior year. And again, the spending in the period really related to our adult GVHD trials, back pain and also our LVAD program as well as getting ready for the BLA and some manufacturing work. Our sales and general and administrative expenses were $28.5 million compared to $18 million in the prior year. And that increase really related to the sales and marketing effort that Marcelo and the sales team did in terms of driving sales growth. The loss during the period this year was $40.2 million compared to $48 million in the prior year period. Again, as I mentioned a few moments ago, that prior year loss was impacted by the $23 million worth of reversal on inventory. And -- but for not those items, we were down -- we were up about -- we were down on a net loss of about $30 million year-over-year. Just in terms of our operating spend and our cash flows for the first fiscal quarter -- first fiscal half of the year, excuse me, we were at $30.3 million. As we look to the second half of the year, we expect our operating cash flow usage to decline when compared to the first half of fiscal '26 based upon our projected cash receipts from revenues as well as maintaining disciplined cost control measures and efficiencies in the operation. And on the next slide, just to point out our profitability and growth pipeline from Ryoncil. As I mentioned, we had strong revenues for the period. Gross margin, excluding amortization expense would have been about $44.2 million. Our direct selling costs were $7.7 million. And again, we have strong operating performance that allows us to invest in our R&D programs and our life cycle extensions. And we do have a very robust pipeline, and we continue to invest in our manufacturing footprint as well as building inventory where needed and getting our second-generation products to market. On Page 9, next slide, please. We had $130 million worth of cash at the end of December of this year, which you can also note that the reduction in our net spend over the year, as I said, will decline over the second half of this year. On December 30, 2025, we entered into a $125 million nondilutive credit line facility. The first tranche of which is $75 million was drawn at closing and enabled Mesoblast to replay in full its prior senior secured loan. We also partially repaid the subordinated royalty facility, which will continue to be reduced from ongoing revenue and will be fully repaid by the middle of 2026. The second tranche of $50 million is available to be drawn on our option through June of 2026. The new facility has a lower cost of capital for the company, freed up its major assets to provide flexibility for strategic partnerships and commercialization. In addition, the new facility can be repaid at any time without incurring early prepayment or make-whole fees. It does not include any exit fees and does not cover any of Mesoblast assets, which is a very strong point for the reason why we did this. This is terrific for the company. And we have no restrictions on doing additional unsecured debt or any licensing activities. We're very pleased with this line of credit and believe it will strengthen our balance sheet to support an exciting growth period for Mesoblast. On the next slide, looking ahead to the second half of 2026, we anticipate full year Ryoncil net revenues to range between $110 million and $120 million on a full year basis. With that, I'll turn the call back to Silviu for additional comments.

Thanks, Jim. If we can go to Slide 12, I'd like to bring Marcelo Santoro, our Chief Commercial Officer, please.

Thank you very much. Next slide, please. So good afternoon, good morning, everyone. We are extremely pleased with the performance of the launch to date, and I couldn't be proud of the work, the commitment and the passion that our colleagues at Mesoblast demonstrate every single day towards these children. We have treated numerous patients since we launched and Ryoncil is having a transformational impact in the treatment of these children according to the feedback we received from treatment centers and treatment teams. In fact, we are on track to achieve 20% market share by the end of year 1 in the market. The commercial performance to date has been exceptional. This holds true not only against our initial expectations, but also when benchmarked against other successful rare disease launches. We have been laser-focused on building the infrastructure needed to ensure Ryoncil reaches its full potential. I am very happy to report that we have onboarded 49 treatment centers to date. In addition, Ryoncil is now listed on the formulary of 30 of those centers, a number that continues to grow steadily as more P&T committees review and approve its use. Formulary inclusion is critical, as you know, as it streamlines the adoption and use of Ryoncil when it's selected for a patient. Having these many formulary approvals in less than 1 year demonstrates the outstanding value of the product and the tireless commitment of the team to build the appropriate infrastructure to expand utilization. In addition, 13 hospitals have opted to use Optum Frontier, our specialty pharmacy partner, virtually eliminating their financial responsibilities with the product. On the payer side, we have also made exceptional progress. Ryoncil is now covered by insurance plans, representing over 280 million lives across both commercial and government payers. Medicaid coverage is in place in all states and a specific J-Code for Ryoncil, J3402 went into effect on October 1, allowing for more efficient billing and reimbursement for both sites of care and payers, along with CMS published rates. Commercial payer support has also been very strong. All major payers, including Aetna, Cigna, UnitedHealthcare, Anthem, Humana and Prime Therapeutics covering all Blue Cross plans have issued favorable coverage policies for Ryoncil. Notably, these policies do not require step therapy, which simplifies patient access significantly. All of this has occurred within the first 6 months post launch. Next slide, please. From a strategic priority standpoint, the Ryoncil team is 100% focused on 3 key strategic pillars. The first is to proactively identify and prioritize appropriate patients who may benefit from Ryoncil therapy. The second to reinforce our superior patient outcomes in first-line treatment right after steroids. And the third is to empower caregivers to demand Ryoncil for their children. We have been working with several advocacy groups and will soon launch a comprehensive campaign dedicated to supporting both caregivers and patients. With that, let me turn back to Paul.

Thanks, Marcelo. I'll hand over to Silviu, who's going to take us through the rest of the deck before we open it up to Q&A. Thanks.

Thank you. If we could move to Slide 14. This slide summarizes our plans for label expansion of Ryoncil into adults. A pivotal study of Ryoncil as part of second-line treatment regimen in adults with severe steroid-refractory graft versus host disease is underway with our partners at the NIH-funded Bone Marrow Transplant Clinical Trials Network. The basis for this trial is that 50% of adults who have severe GVHD fail existing second-line treatment, including predominantly ruxolitinib. These patients who fail have a 25% abysmal survival at 100 days. We have previously used Ryoncil under expanded access in patients aged 12 and older, in many adults as well, 18 and older who have failed ruxolitinib or other second-line agents and use of our product in this patient population was associated with 76% survival at day 100, a remarkable result. As a result of these results, the final protocol design for the registrational study in adults has been locked down and has been worked through with the FDA recently in a meeting with the FDA agency. We expect that following Central Institutional Review Board approval coming up in March, site initiation and patient enrollment will commence. Next slide, please. Further extension strategy for Ryoncil is focused on various opportunities in pediatric and adult inflammatory diseases. The team is currently evaluating multiple indications to unlock value, including in the inflammatory bowel, neurodegenerative and respiratory conditions. Our portfolio will be prioritized to maximize shareholder return by utilizing either internal investment strategies versus external partnership initiatives. Next slide, Slide 16. Now I'll be updating you on our second-generation platform, rexlemestrocel-L currently being developed for discogenic chronic low back pain and chronic ischemic heart failure. Slide 17, our Phase III chronic low back pain program, a first 404-patient randomized controlled Phase III trial has already completed, and that included about 40% of patients who are opioid dependent. We met with the FDA recently and received positive feedback on potential filing of a BLA based on achieving a clinically meaningful reduction in pain intensity at 12 months between the treatment arm and placebo arm. The robust result in opioid reduction from at least one adequate and well-controlled trial could be included according to our meeting with the agency as part of product labeling, which is a very, very, very important outcome. We, in fact, do already have an RMAT, Regenerative Medicine Advanced Therapy designation for rexlemestrocel-L as a potential opioid-sparing therapy in chronic lower back pain. Next slide. The confirmatory Phase III trial is recruiting currently 300 patients across 40 sites in the U.S. with a primary endpoint, 12-month reduction in pain. As I've mentioned on multiple occasions, FDA has confirmed that, that is an approvable endpoint. The enrollment of these 300 patients is expected to be completed in March or April. Data readout and BLA filing are expected in calendar year 2027. We have, at the same time, undergoing commercial manufacturing in order to leverage our existing capacity and cost efficiencies. I will reinforce that there are many patients who are suffering from this terrible disease. Over 7 million patients across each of the U.S. and EU5 are due to generative this disease, patients who are otherwise have run out of options other than surgery. This is a large unmet need for a potential blockbuster opportunity. Next slide, Slide 19. Now I'd like to update you on Revascor, our product based on our rexlemestrocel-L platform that is being developed for chronic heart failure with reduced ejection fraction and persistent inflammation in either patients with Class II/III heart failure or very end-stage heart failure patients who are being kept alive with a ventricular assist device in the left ventricle. We can go to Slide 20. LVAD implantation improves overall survival in these end-stage patients, and that's well established. However, the underlying causes of heart failure in these patients, notably inflammation, persists. And whilst the left ventricle improving the left side -- the LVAD is improving on the left side of the heart, the right ventricular pump function remains vulnerable and continues to deteriorate. Therefore, progressive right heart failure continues to occur in up to 30% of patients and is the primary cause of multi-organ failure and death in this group of patients, mortality occurring within the first 12 months. In addition, life-threatening major mucosal bleeding due to progressive right heart failure and portal hypertension occur in about 30% of patients and is the major morbidity in this group, the main cause of recurrent hospitalization. Next slide. Now we performed 2 randomized controlled studies in this patient population. The more recent study was called LVAD Study II, and that randomized 159 patients in a 2:1 randomization to provide primary evidence of Revascor's efficacy in reducing major bleeding events. A second study, LVAD Study I, an earlier study, is a supportive study for LVAD II, randomized 30 patients in a 2:1 fashion and provided supportive evidence also of Revascor's efficacy in reducing major bleeding events. Intramyocardial injections in both of these studies of either Revascor or control were performed at the time of LVAD implantation. Importantly, both trials, both randomized controlled trials showed the Revascor reduced cumulative incidence of major bleeding events, life-threatening GI bleeding, the trial's primary efficacy and safety endpoint and related hospitalizations through 6 months, both were significant. We go to the next slide, Slide 22. This provides you with some new data that we have not previously presented. This slide demonstrates the total number of major bleeding events resulting in hospitalizations over 6 months on the left-hand side and over 12 months compared to controls in the entire study LVAD II. As you can see both on the left-hand side and the panel B on the right-hand side, Revascor reduced major bleeding events and hospitalizations by about fivefold, a very significant reduction throughout a 12-month period compared to MPC treatment compared to control treatment. Next slide, please. Now moreover, particularly in the ischemic group of patients, what you can see is that on the left-hand side, in controls, in red, the ischemic controls had approximately a three to fourfold increase in hospitalizations due to right heart failure. The non-ischemics had a very low incidence and risk of heart failure hospitalization. In contrast, on the right-hand side, by 12 months, you can see that the MPC treatment reduced the right heart failure hospitalization events in ischemic patients back to background levels, the same levels as I see in non-ischemic controls. And again, those reductions of hospitalization from right heart failure were significant. Next slide, please. This slide focuses on the risk of death from right heart failure in controls on the left, and in Revascor-treated patients on the right. As you can see in Panel A on the left, amongst patient controls who have at least one hospitalization from right heart failure, the presence of -- sorry, amongst controls, the presence of right heart failure hospitalization, at least 1 right heart failure hospitalization in red was associated with a mortality risk and a hazard ratio of 7 or more than 7 compared to patients who did not have right heart failure. So in controls, particularly early within the first 4 months after LVAD implantation, the presence of a right heart failure hospitalization was a very strong predictor of death. In contrast, what you can see on the right-hand side, amongst Revascor-treated patients, the risk of death, particularly in that early period 4-month period is almost completely abolish. And you can see that the overall survival over a 12-month period in Revascor-treated patient was the same, irrespective of whether they had a right heart failure hospitalization or not. So what this means is that Revascor not only reduces the incidence of hospitalization rates, but protects these patients against death from right heart failure. If you go to the next slide, please. So the summary of these new data, data that I haven't shown you here, but we have also observed is that Revascor reduces the inflammatory cytokines and through inflammation reduction protects the at-risk right ventricle in these patients, the same right ventricle that continues to fail despite the fact that there's an LVAD in the left ventricle. The strengthened right ventricle reduces hospitalization rates in the intensive care unit due to right heart failure and improves survival. The strengthened right ventricle decreases the risk of portal hypertension and therefore, decreases GI bleeding events. This leads us to think very carefully about how Revascor beyond its potential use in patients with left heart failure problems, also has the potential to be used to improve right heart failure function in patients not only with ischemic heart disease, but other causes of right heart failure, including primary pulmonary hypertension and chronic lung diseases. Next slide, please, Slide 26. So let me give you an update on our CHF program, particularly our plans to file for approval. With these new data and our existing orphan drug designation for treating this group of high-risk patients with high mortality as well as FDA's stated preference for randomized controlled trials, Mesoblast is moving from filing for an accelerated approval to filing for a full approval. Unlike an accelerated approval, full approval does not require a confirmatory study. Aligned with FDA on items required for filing the BLA regarding CMC potency assays for product release and commercial manufacturing, we now have these activities well and truly underway, and we expect to file our BLA for full approval for this indication in the next quarter. Let me summarize our highlights and our upcoming milestones. Ryoncil is the first and only FDA-approved MSC product. It delivered net revenues of USD 49 million in the first half of FY '26. As you heard, 49 centers have been onboarded, 64 centers account for 94% of the entire pediatric bone marrow transplant population, so well underway to achieve that in record time. We're initiating label expansion to adult acute GVHD, a market that is 3x larger than the pediatric market. We are currently prioritizing our portfolio, which includes the potential to go into the inflammatory bowel disease, neurodegenerative diseases and respiratory conditions, and we will update the market as we focus on certain areas in priority over others. Our second-generation rexlemestrocel-L is enrolling the second trial in back pain with full enrollment expected to complete by the end of March or end of April. BLA filing next quarter is in line for full approval for patients with right heart failure and end-stage heart failure with LVAD. And we're actively optimizing manufacturing logistics to support commercialization, both of the rexlemestrocel-L pipeline and obviously, to have further inventory for the projected growth in Ryoncil sales. With $130 million in cash on hand as of December 31 and the new credit line that you heard about, which still has the potential for $50 million available to draw down, we're in a very strong financial position. And as you heard earlier, we are projecting full year fiscal 2026 Ryoncil net revenue to range between USD 110 million and USD 120 million. And I think I'll stop there. And hopefully, there are some questions that we can all address. Thank you.

Operator, if you could please open the lines for questions. Thank you.

[Operator Instructions] Your first question comes from Edward Tenthoff with Piper Sandler.

Congrats on all the great progress across the board. Could you just repeat the guidance you broke up a little bit for this coming year?

Yes. Yes. What we're projecting for the full fiscal year are net revenues ranging from $110 million to $120 million again, on a full year fiscal basis 2026 hitting June 2026.

Your next question comes from Olivia Brayer with Cantor Fitzgerald.

I have a few, if you don't mind. Maybe just first on Ryoncil in peds. You all mentioned potentially hitting 20% penetration of that pediatric population by the -- I think it was by the end of your fiscal year, if I heard that correctly. So can you maybe just run through what those assumptions include to get to that 20%? And how high of penetration do you think you can realistically reach in this specifically peds population over time? And then I've got a couple more on your pipeline programs.

Yes. So thank you. So let me start with the second one and then go to the first, right? So the second one, we assume a 40% peak share. And you have to understand, we believe it should be 100%. This is a product that should be used by everyone. But let's be responsible and realistic, a 40% share is reasonable, right? So if you assume a range of patients, and obviously, that's dynamic of 375 patients, that's what the 20% is based on. It's 20% until the end of our fiscal year. That's what we aim on achieving at that point.

And is that specifically for the fourth quarter of your fiscal year? Like if I'm kind of doing the math.

Yes.

Okay. That's helpful. And then for your Revascor BLA next quarter, how is the FDA viewing the ischemic versus non-ischemic phenotypes? And have they given any input on to or around potential labeling language around the ischemic etiology or inflammation biomarkers?

Well, so I think it's important to note that in the 159-patient trial, we achieved the principal endpoint of -- in overall in the full patient population without having to go to any subgroups in terms of the cumulative incidence of major bleeding events over 6 months. Also, we achieved a significant reduction in hospitalizations for major bleeding events across the entire patient population without having to go to subgroup. So our position is that we will be seeking a label for the entire patient population, especially given that the confirmatory study, LVAD I, also achieved the same endpoint across all patients. There's no question that the patients at greatest risk are those with ischemic etiology. And those patients have a higher level of inflammation, they have a higher risk for bleeding, right heart failure and death. And interestingly, we saw the very same sort of thing in the larger trial in Class II/III heart failure, where, again, we saw patients with ischemic heart disease as an etiology had high levels of inflammation, greater risk of 3-point MACE and greater treatment benefit. So we will be providing the FDA with the totality of the data that confirm the supportive trials, demonstration that ischemic patients are at greater risk and treatment with our cells is even more effective in that subgroup, but we've achieved the endpoint around the prespecified bleeding endpoint and hospitalization endpoint across the entire population. So that remains to be negotiated.

That's helpful. Understood. And then last question is just on the chronic back pain. Can you just clarify what data you're submitting to the FDA? Is it just a new analysis of the pre-existing data? And is your ongoing Phase III not actually going to be part of that submission package? Maybe just some clarity around that update because I do think that is a new disclosure.

No, no, no. I didn't mean to say that we wouldn't be submitting the data from the new trial. The new trial, the second trial, which completes enrollment by over the next month to 6 weeks is the plan to complete enrollment. That trial becomes the primary data set and the previous trial becomes a supportive data set. That's certainly our intention. We have spoken with the FDA about looking at the subgroup of patients who are opioid dependent and that's a discussion that is ongoing with the agency. But with respect to the primary endpoint in all comers of pain reduction, we will be using the 2 trials to present full data sets.

Okay. But that additional Phase III readout is coming in 2027, correct?

That's correct.

So will you -- you're kicking off filing before actually having that data?

No. The objective is to complete that trial, get the readout and move to a filing with those data in the primary file.

Your next question comes from Madeleine Williams with Canaccord.

Just in regards -- just going back to the pediatric Ryoncil and just the FY '26 guidance. Can you speak a little bit to sort of how you're seeing repeat utilization among centers or just how that kind of shakes out over the remaining of the year and sort of just trying to dig into more.

Yes. No, we'd be happy to do that. Yes. So we see the continuous growth in the centers, continuous adoption, not only by more centers, but also repeated use by the current centers we already have, which shows that they are finding utility in the products and repeating the treatment in other children, right? So that's one component. The second component, we're also seeing very big, very large centers coming on board, which will substantially increase our confidence in this guidance. And it's a reality that is happening every day.

And I would add to that, I think a major additional components moving forward is continued physician education. We've shown both in our previous Phase III trials and in the real-world data that the earlier this product is used, the greater the survival. it's unquestionable. And so a lot of the effort by the team will be to educate physicians. Physicians have their own practice habits. And they all believe that their particular way of doing things is standard. Nothing is standard in this disease, especially given that only Ryoncil is approved by FDA for treatment of children. So I think a major focus and an area of growth is to educate the majority to use the product as early as possible after steroid failure. Do you agree, Marcelo?

For sure. And I would add 1 more, right? So as a father, unfortunately, my child had something like this horrible disease, I would like to know that this option is available. So it's our obligation to empower them to empower the caregivers, make sure that they understand that this product is available and it's the only FDA-approved product so that they can talk to their treatment teams and ask for this as a potential therapeutic option for their child.

That's helpful. And just maybe 1 more for me. Just in regards to Revascor and the full approval -- filing for full approval rather than accelerated. I'm just interested, you've obviously discussed the additional data, but I'm assuming there's sort of been some sort of constructive discussions with the FDA. And just sort of if you can provide more color about what your confidence is in receiving that full approval?

Well, we've had multiple discussions with the agency. We understand what they wanted to see and the data that I've highlighted to you today, particularly as it relates to mortality is the #1 area of focus. And the recent guidance by the agency to focus on randomized controlled trials rather than single-arm trials where major endpoints are being targeted like mortality give us the sort of confidence that particularly in an orphan disease indication where a single trial should be viewed as sufficient for approval, full approval.

[Operator Instructions] Your next question comes from Michael Okunewitch with Maxim Group.

Congrats on all the progress. I guess just to kick things off, there's obviously been a lot of changes at the FDA since you first launched the Phase III in chronic lower back pain. So I wanted to see if you've received confirmation from the current FDA administration that the 12-month pain-only endpoint is sufficient for approval?

Yes, we have. Absolutely. That's exactly why we had the meeting recently to gain confirmation from the current administration that, that endpoint is an approvable endpoint, and that's exactly what we received. Moreover, the recent guidance from the FDA that a single well-conducted randomized controlled trial is sufficient for approvals in various indications also gives us great confidence that if we achieve that endpoint, this is an approvable trial and approval endpoint.

And then just 1 more for me, and I'll hop back in the queue. I wanted to ask when it comes to the upcoming filing in the Class IV heart failure programs, are there any outstanding items that FDA has requested that you need to finalize before you can submit that next quarter?

Well, commercial manufacturing is always a very important component of this. And that is something that we are heavily engaged in. The product rexlemestrocel-L and its Phase III trials was all made at Lonza in the same facility where Ryoncil was made and which was approved for Ryoncil. And we believe that the vast majority of the manufacturing process is quite similar to the Ryoncil process. So I think that will be an advantage in our filing, but that remains -- we need to get some more confirmation from the agency. Nonetheless, we expect that the long history of manufactured product for back pain trials, cardiac trials will hold us in good stead.

That brings us to the end of today's call. I'll hand back to Paul, please.

Thank you. As you heard today, we're in a strong position with a number of significant milestones in this current second half through the period. We look forward to keeping you updated on the progress and the achievements. I'd like to thank everyone for their interest in Mesoblast and participation in the call today. Thank you, and have a great day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Hello, and welcome to the Mesoblast Financial Results for the Full Year Ended June 30, 2025. An announcement and presentation have been lodged with the ASX and are also available on the home and investor pages at www.mesoblast.com. [Operator Instructions] As a reminder, this conference call is being recorded. Before we begin, let me remind you that during today's conference call, the company will be making forward-looking statements that represent the company's intentions, expectations or beliefs concerning future events. These forward-looking statements are qualified by important factors set forth in today's announcement and the company's filings with the SEC, which could cause actual results to differ materially from those in such forward-looking statements. In addition, any forward-looking statements represent the company's views only as of the date of this webcast and should not be relied upon as representing the company's views of any subsequent date. The company specifically disclaims any obligations to update such statements. With that, I would like to turn the call over to Dr. Silviu Itescu, Chief Executive of Mesoblast.

Good afternoon, good morning -- to the Mesoblast financial results and operational update for the full year ended June 30, 2025. My name is Silviu Itescu. I'm Chief Executive of Mesoblast. On the line with me are Andrew Chaponnel, our Interim Chief Financial Officer; and Marcelo Santoro, our Chief Commercial Officer. We can go to Slide 4, please. This slide is a snapshot of our company profile. Mesoblast has an FDA-approved product, Ryoncil, which is the first and only FDA-approved mesenchymal stromal cell in the United States. We have over 1,100 patents and patent applications globally for our platform technology. We have 2 additional assets in Phase III trials. We have FDA commercial scale manufacturing capabilities. And we've built out a U.S. commercial organization. Next slide, please. Our platform technology is based on a shared mechanism of action across all of our products. Our mesenchymal lineage stromal cells respond to and are activated by multiple inflammatory cytokines through surface receptors on these cells, which result in orchestration of an anti-inflammatory cascade as a result of multiple factors that mesenchymal stromal cells secrete. That's the basis for our products, which address major diseases of inflammation. Next slide, please. On this slide is a snapshot of our mesenchymal stromal cell product portfolio. We have 2 platform technologies. One is called remestemcel-L, our first-generation technology; and our second-generation technology, which is called rexlemestrocel- L. Ryoncil, a branded product approved for pediatric steroid-refractory acute graft-versus-host disease and launched in the past quarter is our lead product on the remestemcel-L platform technology. It is also being developed for adult steroid-refractory acute graft-versus- host disease and inflammatory bowel disease. The rexlemestrocel-L platform technology, which uses monoclonal antibodies to isolate pure and more homogeneous cell population is in Phase III in 2 large areas, inflammatory chronic heart failure and in chronic low back [indiscernible] due to inflammation of the intervertebral disc. More about that later. Next slide, please. This slide identifies the addressable annual market opportunity for our product portfolio. Ryoncil, the first mesenchymal stromal cell MSC therapy approved by the FDA is being -- is on the market, has been launched for treatment of children with acute GvHD and with the potential for label extension in adults with acute GvHD of high severity. This addressable market is approximately $1 billion. Biologic refractory inflammatory bowel disease, which represents an extension of the label opportunity has more than $5 billion in an addressable market. Heart failure with reduced ejection fraction for our rexlemestrocel-L product has a more than $10 billion addressable market. Chronic low back pain is similarly positioned for more than $10 billion as an annual market opportunity. And of course, we have multiple additional multi-billion opportunities from existing and future product pipeline based on our technology platforms. Next slide, please. We're very pleased with the successful commercial launch to date of Ryoncil. In December 2024, Ryoncil became the first and only FDA-approved MSC product in the United States. Ryoncil became commercially available for purchase March 28, 2025, within a quarter of receiving FDA approval. Since launch, we've onboarded 32 transplant centers across the United States. We aim to, by the end of this quarter, have onboarded the top 45 centers that account for 80% of pediatric bone marrow transplants in the United States. Coverage for Ryoncil continues to expand with over 250 million lives in the U.S. insured by commercial and government payers. Importantly, Medicaid coverage exists for both federal and all states and it was mandated on July 1 of this year. Next slide, please. Now I'd like to move to our financial results for the period ended June 30, 2025. Next slide. Financial highlights for this year are as follows: Revenue from cell therapy products was $17.2 million, up 191% on the prior year. We're delighted that this growth in revenue was driven by the successful launch of Ryoncil in that final -- in the final quarter of the year with $13.2 million in gross sales and $11.3 million in reported net sales after a 14.6% gross to net adjustment. Net operating cash spend for the year was $50 million, very similar to the prior year, and this is despite the fact that we've invested in costs related to the commercial team build-out and activities around product launch. Our cash on hand as of June 30 was $162 million or AUD 247 million. Now I'd like to have Andrew take us through some details on the financial results.

Thanks, Silviu. Next slide. Turning to Slide 11. We have the financial results for the year ended June 30, 2025. All numbers are reported in U.S. dollars. Total revenues from cell therapy products are up 191% on the prior year. Cost of revenues related to product sales were $1.2 million, which is 10% of net product sales and a gross margin of 90%. Additionally, cost of revenues also included $3.9 million of expenses related to non-cash amortization of the intangible value of our prior MSC asset acquisition. Selling, general and admin expenses were $39.3 million for FY 2025, an increase of $14.3 million on FY 2024. This increase related to our commercial team build and product launch. For revaluation of contingent consideration, we recognized a loss of $14.9 million in FY 2025, a non-cash revaluation of potential future third-party payments. The revaluation of warrant liability as a result of FDA approval of Ryoncil and the consequential share price appreciation resulted in us recognizing a warrant remeasurement loss of $5 million in FY 2025 compared to a gain of $0.8 million for FY 2024. Back to you, Silviu.

Thank you. Next slide. Let me take you through where we are with Ryoncil for children with acute graft-versus-host disease. This is the first and only mesenchymal stromal cell therapy approved by the FDA. Next slide. More than 30,000 allogeneic bone marrow transplants are performed globally, of which 10,000 to 12,000 are performed in the U.S. About 20% of these transplants are pediatric. And about 40% to 50% of transplants, whether in children or adults, result in a devastating disease called acute graft-versus-host disease, which when it occurs involves the skin, gut and the liver and in the more severe forms involving severe liver and gut disease can be [ 70% to 90% ] -- associated with 70% to 90% mortality. About 50% overall of acute graft-versus-host disease patients do not respond to steroids. And for these, in the pediatric age group, Ryoncil is the only FDA-approved product for these children. Next slide, please. The results from our pivotal Phase III trial that underpinned the successful approval of the product Ryoncil is highlighted in this slide. In a 54-patient single-arm multi-center Phase III trial across the U.S., overall day 28 response rate, the primary endpoint of the trial, was 70%. This study enrolled almost 90% of patients with the most severe forms of disease, Grade C and Grade D, which typically does not respond to other agents and is associated with high mortality. Next slide, please. In fact, the long-term survival in a follow-up study from the International Blood and Bone Marrow Transplant Research Registry showed that despite the severity of the grade in most patients at baseline, as many as almost 50% of patients were alive at 4 and 5 years out and only 14% had died due to acute graft-versus-host disease. In other words, the early response that we saw in the majority of patients translated into durable long-term survival and essentially cure of the underlying disease, GvHD. Next slide, please. Importantly to understand is that in patients with GvHD who ultimately die of this disease, the cost of treatment, inclusive of intensive care use, is very high. And in fact, the child who has acute GvHD and is treated well with our therapy and is able to be discharged from the hospital costs about $1.8 million less than a child with acute GvHD who is untreated and ultimately dies, a substantial cost saving per patient. Next slide. These benefits are even more pronounced when one considers that this is a long-term cure of these patients. The total benefits of patient outcomes using Ryoncil range from $3.2 million to $4.1 million when comprising long-term survival benefit, cost offsets and cost savings. And this uses a quality of life years gained analysis. Next slide. Beyond pediatric GvHD, we actually have a very clear label extension strategy to expand the use of Ryoncil in adult patients with GvHD. Most of the sites that have already onboarded Ryoncil for use in children with the disease also perform adult bone marrow transplants. In fact, we have an active compassionate care program to provide Ryoncil to adults with steroid-refractory acute GvHD who have failed other therapies. Adults with this disease have a high rate of non-responsiveness to second-line agents such as ruxolitinib. Survival in those with GvHD who have failed at least one additional agent such as ruxolitinib remains as low as 20% to 30% by 100 days. In contrast, in our compassionate care program, in 25 patients aged 12 and older with steroid-refractory GvHD who failed ruxolitinib or other second- line agents, survival at 100 days was 76% when Ryoncil treatment was used under expanded access. We recently met with FDA to discuss a pivotal trial design for Ryoncil in adults with severe acute GvHD and we intend to conduct a pivotal study of Ryoncil on top of approved second-line therapy such as ruxolitinib in patients with severe steroid-refractory GvHD such as Grade C/D or other characterization of severity. This trial will be conducted with the NIH-funded Bone Marrow Transplant Clinical Trials Network, the BMT-CTN. The objective is to extend the product's label from children to adults with this devastating disease, enabling Ryoncil to be used in a population approximately 3x larger than the pediatric population that it's currently approved for. Next slide, please. Beyond adults with acute GvHD, we intend to expand the label into other indications of inflammation. Next slide, please. Inflammatory bowel disease, notably ulcerative colitis and Crohn's disease are 2 areas that we believe Ryoncil has a place. More than 3 million people across the U.S. alone have inflammatory bowel disease. Amongst these patients, 38,000 new cases of ulcerative colitis and 33,000 new cases of Crohn's disease are diagnosed every year. There is a substantial unmet need of about 30% of patients who remain unresponsive to biologic agents such as anti-TNF agents or some of the newer monoclonal antibodies. Up to 80% of patients with medically-refractory Crohn's disease and 20% of patients with ulcerative colitis that's non-responsive eventually require surgical treatment of their disease. What is really needed right now is early and durable remission, which remains a major objective for new therapies in order to avoid the longer-term complications and ultimately surgery in these patients. Next slide, please. Mesenchymal stromal cells have had a long history of being evaluated as potential therapeutic uses in patients with inflammatory bowel disease. More recently, local administration of mesenchymal stromal cells has been shown to be safe and to improve outcomes in diseases such as ulcerative colitis and proctitis. On this slide, I show you the summary of a pilot study performed in Europe using mesenchymal stromal cells in patients with ulcerative proctitis, which occurs in about 30% of patients with -- in an isolated conditions in ulcerative colitis. In these 13 adult patients with biologic refractory inflammation, local administration into the rectal mucosa of 20 million to 80 million allogeneic bone marrow-derived mesenchymal stromal cells was performed under endoscopic injection. As you can see on this slide, by 6 weeks, mean clinical and endoscopic scores significantly improved. The objective is to achieve remission as early as 6 weeks. Next slide, please. More recently, local administration of Ryoncil was shown to improve outcomes in patients with biologic-refractory extensive colitis. In a 12-patient pilot study of biologic-refractory inflammation of the colon, local administration of Ryoncil, a single dose resulted in clinical and endoscopic responses and remission by 6 weeks. As you can see in the pictures on the right, in panels A and B, significant inflammation of the mucosa in a patient with ulcerative colitis extensively involving the colon is clearly evident. In contrast, 6 weeks later, panels C and D, you can see that the inflammatory protrusions have disappeared. This is endoscopic evidence of remission. In addition, in patients with Crohn's colitis of the large bowel, the improvement in endoscopic and clinical outcomes was accompanied by reduced serum biomarker of inflammation called calprotectin. The calprotectin levels are consistent with rapid mucosal healing and disease remission. And you can see in the pathologic figure at the bottom, on the left-hand side, the colonic mucosa in active disease is full of inflammatory cells and destruction of the crypts. 6 months later on the right, a repeat endoscopy and biopsy showed total resolution and healing of the mucosa in the patient with refractory colitis. On the basis of these results and the fact that we've previously shown that intravenous remestemcel-L resulted in early remission within 4 weeks following multiple intravenous infusions in patients who had failed a prior biologic, we plan to initiate a pivotal study of Ryoncil for early remission in patients with medically-refractory inflammatory colitis, and we'll be updating the market in due course. Next slide, please. Now let me move to our second-generation product, rexlemestrocel-L. This is based on monoclonal antibody isolation and extraction from bone marrow. Chronic low back pain due to degenerative disc disease is a major problem. It impacts more than 7 million people across the United States. There are minimal treatment options for patients who do not respond early to conservative treatments or to anti-inflammatory drugs. In fact, 50% of opioid prescriptions across the United States are for chronic lower back pain, exactly this patient population. We are very much aware of the opioid epidemic and the many patients who are dying because of opioid abuse and overuse. There's an urgent need to have a durable improvement in pain and avoid the opioid use that is currently causing terrible pain and suffering across the United States. Next slide, please, Slide 25. This slide identifies the patient journey of patients with chronic low back pain refractory to standard treatment. As I've highlighted, there are minimal options available for these patients. After you've gone through physical therapy, chiropractic, acupuncture and non-steroidal anti-inflammatory drugs, there's only opioids. Other than opioids, the other potential treatments are interventional therapies that involve interventions with radiofrequency ablation, spinal cord stimulation, et cetera. Epidural steroids typically have short-term benefit only. Ultimately, these patients after many years of suffering come to spinal fusion or disc replacement surgery. We believe that rexlemestrocel-L can target these patients very early, usually as early as 6 months after failure of conservative treatments, although of course, in our clinical trials, patients have been referred after years of struggling with severe pain. Slide 26, please. This slide summarizes the outcomes in our previous Phase III trial based on a single injection of rexlemestrocel-L together with hyaluronic acid carrier to maintain the cells within the disc space. If you just focus on the green at the top is the mean change in pain from baseline in patients who received placebo at 6, 12, 18 and 24 months, relatively static. In contrast, if you look at the red line at the bottom, you see quite a dramatic reduction in pain at 12 months and then maintenance of that significant difference in pain modulation for as long as 36 months from a single injection. Next slide, please. Let me move to rexlemestrocel-L for heart failure. Again, a snapshot of this -- in this space. Slide 28. Heart failure with low ejection fraction also continues to be a major problem with increasing in prevalence and risk of mortality and heart attacks and strokes. Over 60% of patients with chronic heart failure have underlying ischemia and these patients are at highest risk of recurrent major adverse events involving the large vessels such as heart and strokes. Slide 29. This complex slide really just focuses on, again, the patient journey. Patients progress from early-stage disease Class I to moderate disease Class II and then to Class III and Class IV. We target the most severe patients where inflammation progresses to Class III and Class IV and ultimately death. In these patients, we've completed 2 Phase III trials, both randomized controlled trials with endpoints that have demonstrated that in patients with inflammation, we can reduce the endpoints of severity and reduce mortality. Next slide, please. Slide 30 demonstrates on the left-hand side that compared to controls, we significantly reduced in a pivotal Phase III trial, both in patients with inflammation on the left-hand side is measured by CRP on the right-hand side is measured by IL-6, the severe risk of mortality quite dramatically over a 5-year period of follow-up. Next slide, please, 31. And in this slide, we summarize the overall results in a 500-patient randomized controlled study where you see that on the left-hand side, the 2-point MACE, heart attack or stroke. And on the right-hand side, heart attack, stroke or death are progressively decreased as you move from all patients to those patients at highest risk, those with ischemia and inflammation. And what this essentially tells you is that the patients who are at greatest risk of mortality are precisely those patients who are most likely to respond to a single injection of rexlemestrocel-L into the left side of the heart. On the basis of these data, we met with the FDA last year. We met with the FDA again most recently this year in Type B meetings. And the FDA stated the totality of the trial results from these 2 studies could support an accelerated approval pathway under the existing RMAT designation for the program. We met recently and aligned on items required for filing a biologic license application for Revascor regarding chemistry, manufacturing controls, potency assays and the proposed design and primary endpoint for a confirmatory trial should approval be obtained. If we could now go to the final slide, Slide 34. This identifies our corporate milestones and updates on expected deliverables in the coming 12-month period. For pediatric and adult inflammatory diseases, Ryoncil will commence a registration trial for label expansion in adults with GvHD and we'll initiate a study for inflammatory colitis. For chronic heart failure in adults with low ejection fraction, we are preparing for an accelerated approval filing for Revascor. And finally, for rexlemestrocel-L in chronic low back pain, a confirmatory Phase III trial is actively enrolling across multiple sites in the U.S. to confirm the data that we showed in the first trial, which is to reduce pain at 12 months as the trial's primary endpoint. And it's a placebo-controlled trial with a 12-month follow-up following the completion of the last patient enrolled, which we expect to happen towards the end of this year or first quarter -- during the first quarter of next year. On that basis, I think I'll say thank you for listening to us, and I'd like to open this call to questions.

[Operator Instructions] Your first question today comes from Ted Tenthoff with Piper.

Congrats on all the progress. Really excited to see Ryoncil sales coming off. I wanted to get a sense from you guys, you laid out how the opportunity in adults is larger. How long do you think it might take for label expansion and to run that Phase III trial?

Thanks, Ted. I think you asked how long it might take for label extension to in adults.

Yes. Sorry for the background noise.

So the objective is to commence an adult acute GvHD trial this quarter. We are working with the Bone Marrow Transplant CTN group, which is an NIH-funded organization. They will conduct the trial under their auspices will provide product. We will contribute to funding. And the objective is to add our product on top of existing second-line agents, ruxolitinib being the only approved therapy in patients with severe disease, those patients with Grade C/D disease where ruxolitinib does not adequately address the requirement of these patients where we think that our product will substantially add to the early responses and overall survival. We expect to initiate the study this year, and we'll come back with specific dates and duration.

Great. And then just can you give us a little more color on how the back trial, the Phase III chronic lower back pain trial is coming?

Sure. So this is a huge opportunity for us and a tremendous unmet need, both from the point of view of disability, chronicity and the ability to generate a product that reduces or completely abolishes any pain in these patients for at least 2 to 3 years from a single injection. As important is the fact that as many as 40% of patients in this category are forced to take opioids as the only alternative. And if we can result in opioid avoidance, it's incredibly important at this moment in time. In fact, in our first Phase III trial, we saw 3x as many patients able to come off opioids in the treated patients as in the controls despite being told not to change their medication during that trial. So we're very optimistic that we will see the same sort of outcomes in this study. We've been ramping up the study over the past few months in terms of increasing the number of sites. We're now at almost 40 sites enrolling across the U.S. And as we increase sites, enrollment picks up. We've made various adjustments to the protocol design so that we're able to tweak the enrollment criteria. And to date, we're enrolling well. There are no safety signals. Obviously, the trial is double-blind. So we're not -- we don't know really how it's coming along. But we're confident that we will complete enrollment towards either by the end of the year or sometime in the first quarter of next year. We're very keen to accelerate the study as fast as we can. And following the last patient in, there will be a 12-month period of follow-up in order to read out the trial's primary endpoint of pain at 12 months.

The next question comes from Olivia Brayer with Cantor.

Congratulations on a really strong start to the launch. Are you guys able to disclose how many monthly treatment kits have been administered to date? And what can you tell us about inventory dynamics here? Was any of this net revenue actually related to inventory? And as you think about going forward with the launch, what level of inventory will you typically have to maintain going forward? And then I've got a couple of follow-up questions, if you don't mind.

Sure. So the way we treat the kids is on a weight band basis. And so we have infusion kits that are all priced at the same price, but they have progressively greater product per kit. And so we -- our inventory is constantly stocked to meet the needs of children at every weight band as we treat kids that might be a 20-kilogram child and that gets replenished. If it's a 50 kilogram, a larger child, then that kit gets replenished. So we continue with each child that gets treated, they would be treated typically for 8 to 12 kits for infusions. And as each infusion goes out, we replenish. Typically, we send 2 kits per week per child. So that's how we keep stocking our inventory, if that makes sense. Does that make sense, Olivia?

Yes, that does. Can you disclose how many treatment kits you guys have actually administered so far?

Well, I mean you can -- it's very easy. We're very transparent, right? So each kit costs -- so we know what each kit costs. You know what it costs. And we've told you what our gross to net discount -- gross to net adjustments are. So you can divide the total gross to net by the price per kit and you can figure out how many kits we've sold.

Okay, perfect. Helpful. And then you mentioned the gross to net dynamics, how do you expect those to evolve as the launch progresses or should they be pretty stagnant? And then one final question, just maybe a follow-up on the adult GvHD trial design. Will there be a subset of Jakafi-naive patients or will the entire study really be Jakafi-refractory patient population for the adult?

Yes. So with respect to gross to net, we expect that to be pretty stagnant, pretty flat. That's the sort of number that we've given you today is what we expect it to stay at. With respect to the adult trial, we've decided not to go to Jakafi-refractory patients, but rather on top of Jakafi. And the reason for that is that it provides us with the largest possible market entry. So in second line, in other words, straight after steroids where Jakafi is currently approved in patients with Grade C/D disease or Grade 3/4 disease, which is about 50% of the Jakafi-treated patients, day 28 response is only about 50%. In other words, 50% of patients do not respond to Jakafi. That's the market opportunity. And we believe that adding our cells on top of Jakafi in all patients with severe disease will have a major impact and a major increase in the proportion of patients who achieve response at day 28. And as you know, if you're a responder at day 28, you're likely to be a long-term survivor with our cells. So this is an opportunity to really make a major impact on severe patients as early as possible and make ourselves available to the largest possible patients who need it.

Your next question comes from Elyse Shapiro with Canaccord.

Just on the adult study, are you planning on disclosing a bit more detail from your FDA minutes now that you've probably gotten them? And do you have any -- are there any kind of surprises around trial design or will it be similar to what we've seen with the Jakafi trials?

I think we updated through our release today and our slides, a summary of our discussions with the FDA. The FDA and Mesoblast are aligned. We are in agreement that we want to see the product used as early as possible in the most severe adult population. That is the patient population who is on Jakafi with Grade C/D disease where Jakafi only helps around 50% of patients and the other 50% don't respond. Rather than waiting for these patients to fail Jakafi, where the survival is an abysmal 20%, the best way to provide ourselves is in combination with Jakafi in these patients as soon as they're diagnosed so that we would like to increase the responder rate from, say, 50% to 80% or more. That will be the objective, right? And that allows our product to be used as early as possible in the most severe patients, which is a market size that's about 3x the current pediatric addressable population. And that's where we'll be going into in the pivotal trial.

Got it. Understood. And then just good to see a bit more of a focus on IBD. I guess, what are the timelines to more detail on what a trial would look like? And do you need to do any additional kind of dose-finding work before commencing a pivotal registrational study?

So we've got a KOL group that's been assembled. These are experts in trial design and they've managed and run trials of the latest innovative therapies for ulcerative colitis and Crohn's disease, both in the U.S. and in Europe. These key opinion leaders are putting together right now the best possible trial design. We may very well use both local delivery of Ryoncil as well as intravenous delivery in order to aim to achieve rapid remission as early as week 6 to week 8 in patients who are otherwise refractory to other biologics. Remission remains the challenge. Remission remains a target that is not well addressed by any of the biologics. And in fact, the best available therapy in ulcerative colitis achieves a remission rate of only about 20%. So there's a very large unmet medical need. Our trial design is being worked on and we'll update the market this quarter.

Great. And just one more, if I may. Kind of stepping back, looking at the number of kits that have been sold, are they -- I mean, to your knowledge, are they all being used in pediatric GvHD or could that be inclusive of some additional indications, too?

Yes. We have no way of knowing specifically how much of the product is used for acute GvHD versus for other indications because really physicians and their licenses enable them to make their own judgments as to which patients are best and most suitable for Ryoncil treatment. Of course, we work closely with institutions. Our commercial group works very closely with the institutions as they enroll patients. So we're certainly aware of patients with acute GvHD that are being treated throughout the country. And there have been certain situations where children with acute GvHD who have fallen between the cracks and have not been domiciled, have not had insurance. And for those children, we provide product, obviously, free of charge. We also have a compassionate care use program for adults. And again, make our product available on an as-need basis from -- on a case-by-case basis. So in general, our product is being used predominantly on label for pediatric acute GvHD, where it's reimbursed federally and at every state level by Medicaid and it's reimbursed by the vast majority of commercial carriers. But more transparency than that, we don't really have on how it's being used by individual physicians.

Your next question comes from Michael Okunewitch with Maxim Group.

Congrats on a great start to the launch. I guess to start off, I'd just like to see if you can give us a sense of how the initial sales were distributed over the period? Were they weighted more towards the back end? I'm trying to get a sense of what sort of revenue trajectory we can expect going into the second half of calendar year '25.

Yes. Look, I think it's a little bit early to make projections right now. We've only had really 1 quarter of sales that we're reporting. So it's early. The commercial team has done a fantastic job in terms of getting insurance coverage, getting sites onboarded, getting us on formulary. I certainly expect that over the coming quarters, we're going to see continued strengthening of sales. But to provide guidance is a little bit early. Marcelo, would you like to add?

Yes. No, Silviu, I think it's a good question, and thank you. I think you mentioned that, right? So we're very pleased with the feedback that we've received so far from multiple treatment centers and the healthcare providers we serve right around. So it's certainly already making a meaningful impact in the treatment of these children. The performance to date, especially for the first quarter alone from launch has been outstanding, I would consider not only compared to our own expectations, but also when you benchmark that against other successful rare disease launches. And of course, I mean, I think we're all focused on building the infrastructure. You mentioned that in terms of payers, in terms of onboarding that is needed to ensure that we continue to reach our full potential. So yes, I mean, while we do expect growth, we also recognize that this baseline work is super important for our future performance.

All right. And then just one more for me and I'll hop back into the queue. I wanted to get a sense, in particular, in the context of the changes that we've seen at the FDA over the past 6 to 12 months. What sort of feedback have you gotten on the potential for a filing in heart failure based on your existing body of data? Have you gotten any additional follow-up since you last disclosed to the market?

Yes. We had a terrific meeting, and clearly, there was agreement on all of our manufacturing, our potency assays, which are really important given all of the learnings that we had with Ryoncil. I think getting alignment on that is really important ahead of a filing. And the other important issue is that we have total alignment on what a confirmatory study of somewhere between 250 to 350 patients would look like with an endpoint that aims to -- in patients with the greatest risk for MACE events, aims to reduce MACE events and mortality. So we're very pleased with the interactions with the FDA and we're working diligently to get our documents in.

Your next question comes from John Hester with Bell Potter.

Just a quick question there on market access and this might be one for Marcelo. What work is left to do with market access in terms of Medicare in the various states across the U.S.? And are you sort of halfway there or can you give us some sort of sense of your remaining market access activities?

Marcelo, would you like to address that? I think the short answer is…

Yes, very happy to do that. And the short answer, yes. We're already there for sure. I think on the payer side, we've made excellent progress, thanks to the tireless efforts of our team. We've engaged with more than 97 payers around clinical and value discussions. Ryoncil is now covered by insurance plans, representing over 250 million lives across both the commercial and government payers. And I think importantly, Medicaid is covered and is in place everywhere in all states as of July 1. And in addition to that, which I think addresses your -- part of your question, is that the commercial payer support has also been strong. All of the major players and that includes Aetna, Cigna, United, Anthem, Humana, Pride, which is the Blue Cross Blue Shields. They have issued favorable coverage policies for Ryoncil. And I think notably, this policy do not require step therapy, which simplifies patient access significantly. All of this has occurred within the first 6 months post launch. And then to further support the reimbursement, a specific J-Code for Ryoncil is already in place and goes into effect on October 1, allowing for more efficient billing from our clients or from our customers and payers along with CMS published rates. So that will be very important as we move forward and October is around the corner and that will be important not only for us but also for our clients.

Thank you. That brings us to the end of today's call. I'll now hand to Dr. Itescu for closing remarks.

Well, thank you, everybody, for being on this call. We are extremely, extremely excited and pleased by the way things have gone this whole year, actually, the fact that this has been a banner year for the company. We've received approval. We are the only company that has an FDA-approved mesenchymal stromal cell therapy in the U.S. and we're extremely pleased by the first quarter results. We will continue to work hard. We've got a growing commercial team in the United States. And we hope to continue to provide sales and updates to the market that continues to give the confidence as we transform this company from an R&D company to a fleet-footed commercial biotech organization. Thank you very much, everybody.

That does conclude our conference for today. Thank you for participating. You may now disconnect.