Thank you for standing by. And welcome to the Mesoblast Limited 2022 Full Year Financial Results Conference Call. All participants are in a listen-only mode. A presentation followed by a question-and-answer session [Operator Instructions]. I would now like to hand the conference over to Dr. Silviu Itescu, Chief Executive. Please go ahead.

Thank you very much, and hello, everybody. Welcome to the operational highlights and financial results for the yearend of June 30 of 2022 for Mesoblast. With me today, are our Chief Medical Officer Dr. Eric Rose, and our Interim Chief Financial Officer, Andrew Chaponnel. We can go straight to Slide 4 please. This slide is a snapshot of our late stage clinical pipeline. We have two lead products. Our first generation product is Remestemcel in red. And our next generation product is our immunoselected platform technology, Rexlemestrocel cell, both are stromal cells allogeneic products being developed for distinct indications. Remestemcel is being developed for acute graft versus host disease, steroid-refractory, in children, and then to be expanded into adults. It has completed Phase 3, and we will talk in great detail about our plans for the resubmission for this product for this indication. The second follow-on indication for Remestemcel is in acute respiratory distress syndrome, initially targeting patients with COVID-19. Our third indication is for inflammatory bowel disease, biologic refractory Crohn's and ulcerative colitis. Rexlemestrocel is being developed for local delivery to target inflammation in patients with severe unremitting chronic low back pain due to inflammatory degenerative disc disease, is currently in Phase 3 development and Rexlemestrocel is also being developed for inflammatory chronic heart failure in patients with reduced ejection fraction, also in Phase 3 development. If we go to the next slide please. Near term milestones for these two platform technologies are highlighted in this slide. Remestemcel is in line for a BLA resubmission, which we expect to be filed this quarter for children with steroid refractory acute graft versus host disease. And if accepted with potential U.S. approval for this project in Q1 calendar year 2023. Secondly, we're working with Vanderbilt University Medical Center which coordinates a clinical trial network across 40 sites in the U.S. focused on acute respiratory distress syndrome to jointly develop a trial protocol focusing on confirming the previously observed reduction in mortality in COVID-19 page patients with ARDS under the age of 65. Rexlemestrocel has two major upcoming milestones. One is to meet with the FDA in the next quarter, under the existing regenerative medicine advanced therapy designation, RMAT to discuss a common mechanism of action in patients with heart failure with reduced ejection fraction and a potential pathway towards regulatory approval. With respect to our back pain program, we already have alignment with the FDA on what a pivotal confirmatory study would look like and expect to commence that study by the end of this year in patients with severe unremitting lower back pain due to degenerative disc disease. We can now move to the financial results. Andrew, could you please take us through the financial results for the period ended June 30.

Thanks Silviu. Now turning to Slide 7, total revenue from royalties and milestones increased by 37% to $10.2 million for FY22 compared to $7.5 million for FY21. Within total revenue, royalties from sales of TEMCELL in Japan by our licensee in FY22 were $8.7 million and $9.8 million when adjusted on a constant currency basis, increases of 21% and 36%, respectively versus FY21, predominantly due to increased volume of products sold. At June 30, 2022, cash on hand was $60 million, with pro forma cash of $105 million after we raised gross proceeds of $45 million via a private placement in August 2022. We also have up to an additional $40 million available from our existing loan facility subject to certain milestones. For the year ended June 30, 2022 net cash usage reported for operating activities was $65.8 million, a reduction of 35% on the comparative period last year. Now if we turn to Slide 8, you can see a chart that details reduction in our net cash burn. Our quarterly net operating cash burn has been reduced quarter-on-quarter for the last six quarters. We turn now to Slide 9 thanks. We can see the P&L result for the year compared to the prior year. Within R&D expenditure, there was a 38% reduction of $20.2 million predominantly due to reduced spend on clinical trial activities. We continue our steady investment in manufacturing, including production of Remestemcel inventory, to support the potential launch of GVHD. To-date, we have manufactured $28.9 million worth of Remestemcel inventory, in anticipation of launch. This pre-launch inventory will be recognized on the balance sheet, if we receive FDA approval. Our finance costs have increased. But I note that interest paid in cash was $6.1 million for FY22 and $5.9 million for FY21. And the increase in our reported finance costs is primarily due to the recognition of a non-cash gain on revaluation of our borrowings in a comparative year, due to a reduction in the expected value of future repayments. Now I'll hand the call back to Silviu for the remainder of the presentation.

Thank you, Andrew. We can move now to Slide 11 please, as we start to talk in more detail about our pipeline. Steroid-Refractory Acute Graft versus Host Disease continues to be a devastating disease with a significant unmet need because of its high mortality. The burden of illness continues to be high with about 50% of patients who receive an allogeneic bone marrow transplant developing Acute Graft versus Host Disease and about 50% of those being non-responsive to steroids. In particular, the more severe forms of steroid refractory aGVHD is associated with mortality rates as high as 90% and significant extended hospital stay costs. The market opportunity therefore, is substantial. And in particular, we have gained very good insight into how mesenchymal stromal cell product is likely to be adopted and accepted by the physician community based on the penetration in the Japanese market by TEMCELL. The mesenchymal stromal cell product under license is sold by our partner in Japan, JCR Pharma. We believe that the U.S. market for Steriod-refractory acute GVHD is likely to be 10 times larger than it is in Japan. And so given our increased royalties in the last 12 months on products sold in Japan has provided very good line of sight for how this product would be adopted if approved in the U.S. Please go to the next slide, please. Slide 12 shows the totality of the data that supports the clinical outcomes with Remestemcel in children with steroid-refractory Acute Graft versus Host Disease. The product is being evaluated in three different clinical programs. Highlighted in yellow in this table are the outcomes by Day 28 response in the first row and by day 100 survival in the second row across each of these three trials. And what you see is a very high…

Thank you [Operator Instructions]. The first question today comes from Louise Chen from Cantor Fitzgerald. Please go ahead.

Hi, team. This is Wayne for Louise. Congrats on the progress this quarter. And thank you for taking our questions. So we would like to ask what are the current survival outcomes in acute GVHD and how does MESO view the unmet need? Thank you.

Thank you very much. That's a very, very important question. I think it's clear to see in various publications, that over the past two decades, survival outcomes in steroid refractory, acute GVHD have not materially changed. And that's despite many different approaches, therapeutically, prophylactically. Once you don't respond to steroids, the likelihood of death from steroid refractory disease is very high. And in particular, in the most severe patients, those was great with grade C or D disease, or more recently, patients with a new validated biomarker, the so called MAP score above 0.29, which appears to be more sensitive to predicting disease severity than does grading by clinical scores, those kinds of thresholds are highly predictive of severe mortality. Patients with severe disease have survivals that are very dismal in the order of about 20% despite all the various therapeutic approaches that have been tried. In particular, the only drug that's been approved to-date for GVHD is Ruxolitinib. And it was approved on the basis of a single open arm study, when it subsequently did a randomized control trial as it was required to do it in a post-approval commitment. There was no survival benefit in Steroid-Refractory GVHD disease. So the unmet need continues to be there, particularly for the more severe cases with GVHD, and we have shown high survival rates across multiple studies of Remestemcel in children. We have more recently or our collaborators more recently, independent investigators more recently published a significant survival benefit, with Remestemcel in children with the highest risk for mortality, where mortality in the controls -- survival controls was of the order of 10% and survival in Remestemcel treated children was of the order of 64%. And so I think what we're seeing here now is the ability of a very potent immunomodulatory therapeutic Remestemcel to impact on survival outcomes in those children who have the greatest levels of inflammation and the greatest risk for mortality. And the unmet need continues to be in children, absolutely, because there are no drugs approved in children under 12 at all for this devastating disease. And in adults, with high degrees of inflammation, as such as those with high MAP scores, and continued high mortality, we think that's an obvious place where Remestemcel would be a potential treatment of choice.

Thank you. That's very helpful. Thank you.

Thank you [Operator Instructions]. The next question comes from Jason McCarthy from Maxim Group. Please go ahead.

Hey, guys. Thank you for taking the question. This is Michael Okunewitch on the line for Jason. So I guess my first question, I'd like to ask a bit about the strategy in heart failure, because you do have late stage data in two populations, the advanced and the LVAD patients. So could you kind of highlight how you're looking at the strategy for each population? And then what are the possible outcomes we could expect from your upcoming interactions with regulators?

Yeah, look, I think it's -- you don't want to be anticipating outcomes from upcoming FDA meetings until you've had them. You need to have those discussions in a fulsome way. But what has become quite evident to us is that the continuum of heart failure from class II through class IV, and even on LVAD the common thread is degree of inflammation in the myocardium. And the ability of Rexlemestrocel to respond to that inflammation by turning off the inflammatory stimulus and improving left ventricular systolic function. And you can measure systolic function several ways. You can measure it by ejection fraction, when you've got earlier stage disease. You can measure by the ability to come off a left ventricular assist device, so called weaning in patients who are dependent on a ventricle assist device. But I think that the message is that in the setting of inflammation Rexlemestrocel improves left ventricular systolic function. And depending on the target population, the longer term outcomes, the clinical outcomes, the consequence of poor ventricle, ventricular function are different and are impacted. And in the class II/III population improvement in systolic function at 12 months is associated with long term reduction in MACE events, cardiovascular death, heart attacks strokes. In the LVAD population, the ability to improve systolic function is associated with other outcomes, including GI bleeding, including hospitalizations, etc. And so I think the way to look at this is an underlying mechanism that is consistently seen with Rexlemestrocel in the setting of inflammation, and how to think about its potential use and approval in these particularly high risk patient populations. That's really the basis of the discussions with the agency.

Thank you. That's very helpful. I'd like to follow up and just ask a little bit about the chronic lower back pain program, and in particular, at what stage or time point following failure to manage on conservative management, are you looking for Rexlemestrocel to fit in? If I recall, surgery is generally considered within as little as six months. Would this be a similar timeframe given that patients qualifying for surgery? As we learn your KOL event [ph], their physicians may be particularly open to cell therapy as an alternative for these patients.

Yeah, I wouldn't look at this is an alternative surgery. I mean, the patients who are presenting with severe pain to the pain physicians don't necessarily have a surgical lesion that's amenable to fusion or disc replacement, which is really -- that we're talking about. We're not talking about discectomy is which are used for nerve root compression. We're talking about patients who don't have an over compression to have early stage, radiographic degeneration, but it's severe pain as a result of inflammation that occurs there. And those patients will go on for years really with opioids and other approaches before they seek surgery. So we're looking at patients early as opposed to late and your point is right. However, the sooner that they present with a diagnosis of discogenic back pain, the sooner they should get an injection of our cells. It's clear that the earlier the intervention, the more likely it is for the cells to have an effect in terms of turning off the inflammatory cascade, and resulting in a durable long term reduction in pain for as long as at least three years is always seen. So we will focus on average that access these [ph] patient as early as possible after diagnosis is made, so they're not suffering. They're not taking opioids, they are not focused on other interventions. And therefore, we should be very early in the patient journey.

Thank you. I appreciate you answering my questions.

Thank you. The next question comes from Edward Tenthoff from Piper Sandler. Please go ahead.

Great, thank you so much for taking my question. And it really looks like a pretty exciting period coming up for the company. So I just wanted to sort of how partnering fits into your go forward strategy. And I know, you guys have been successful in the past. And these are major block cluster indications, just to kind of articulate what is sort of the priority to keep and where do you think maybe a partnership may best help maximize the value, either with Remestemcel Rexlemestrocel? Thanks.

Yeah, that's a complex question. So I think with respect to Remestemcel, we see the value driver for this company as having a first product approved and launched in the U.S. market. And we're anticipating doing that ourselves. We've got a strong commercial team. Our COO is heading the commercial launch plans, building a targeted sales force, stage gated investment in sales, marketing and distribution network. But I think first part approval was getting through the regulatory framework as a first allogeneic cell therapy will be seen as a huge benchmark. And the reimbursement for that product, we think will be similar to some of the CAR-T products that are already out there given to similar target patient populations. I think it makes a lot of sense for us to focus on the first product delivery to commercialization on our own. There's potential obviously to unlock great value in that product in multiple additional indications, including ads, including other inflammatory conditions, both in children and adults. And I think post approval, we will be focusing on strategic partnerships for that product in various indications on a perhaps an indication by indication basis in areas that we would not have the commercialization panels available to us at this point in time. With respect to Rexlemestrocel, which is currently in like stage Phase 3 development, similar kind of considerations exist in that the market potential in blockbuster areas like inflammatory back pain or inflammatory heart failure, at large, will require commercial distribution channels that partners can bring to the table, that we wouldn't want to be in a position to invest in at this point in time. The question is more of timing, rather than it's more of timing is really the issue. And have alternative opportunities in front of us in terms of have access to capital to complete some of these studies that not require strategic partners to be involved with until, again, approval is close at hand. So I think the strategies for commercial partnerships in late stage will be different than the way we would look at things if we were earlier in in Phase 1 or Phase 2, for example. And they are different for an approved product, which has a follow on series of indications than for products that is about to complete a pivotal Phase 3, if that makes -- does that makes sense?

It makes a lot of sense. Thank you very much Silviu.

Thanks.

Thank you. At this time, we're showing no further questions. I'll hand the conference back to Dr. Itescu for any closing remarks. End of Q&A:

Well, before we close, I'd like Dr. Rose to give his view on the exciting prospects in front of us with products like Rexlemestrocel for back pain. Eric, would you like to just give your view on how you see that as a potential value driver for the company beyond our GVHD asset?

Sure. Obviously it's a point of entry into a very large marketplace. And we think the data that are there in randomized trials already show a very substantial benefit to patients with pain duration relief, duration of relief, that is years as opposed to months which is all that's been achieved with previous pain medicines using the standard for FDA trials that has been pursued for pain in general and back pain due to herniated discs in particular. Let me go back though to GVHD. To say that we're not excited about this would be the understatement, I think, of the century. We're very excited about GVHD because one, it's a lethal disease. Two, the quality adjusted life years that can be added to the life of the beneficiary of our therapy is substantial. And three, the market has shown that even orphan drugs in this space, command considerable value in the marketplace. They are drugs that have been improved recently without randomized trials in general, for these indications, for the indication of chronic GVHD, which is essentially an extension of acute GVHD with now two companies, I believe that have achieved more than $1 billion valuations with that indication. We think we're going to be right in that range as a company in terms of our value, and in terms of benefit that we provide to patients. This is a whole new class of therapeutics. There is no off-the-shelf, stem cell, or any cell product, as far as I know, aside from blood transfusions that's approved by the FDA for therapeutic use. And the company stands at the precipice of a breakthrough in this regard for a class of therapeutics that I think will have wide usage in multiple diseases. And we believe that it will be appropriately valued for that as well, once GVHD is hopefully approved. So let me stop there.

That's very insightful. Thanks, Eric. Really appreciate those comments. Sure, and on that note, I want to thank everybody for participating on today's call. We're very excited. I think this is going to be a transformative year for the company. And we look forward to updating everybody in short order on our upcoming milestones. Thank you, everybody.

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