Mesoblast Ltd (MESO) 2025 Q4 法說會逐字稿

Hello. 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. Please go ahead.

Good afternoon, good morning to the Mesoblast financial results and operational update for the full year ended June 30, 2025.

My name's 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.

If we could go to slide 4, please, this slide is a snapshot of our company profile. Mesoblast has an FDA-approved product, YONCIL, 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 two additional assets in Phase 3 trials. We have FDA commercial scale manufacturing capabilities. We have built out the US 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 the 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 two platform technologies. One is called remestemcel, our first-generation technology; and our second-generation technology, which is called rexlemestrocel.

RYONCIL, a branded product approved for Pediatric Steroid Refractory-acute Graft Versus Host Disease launched in the past quarter, is our lead product on the remestemcel platform technology. It is also being developed for adult Steroid Refractory-acute Graft Versus Host Disease and inflammatory bowel disease.

The rexlemestrocel platform technology, which uses monoclonal antibodies to isolate purer, more homogeneous cell population is in Phase 3 in two large areas: inflammatory chronic heart failure and chronic low back due to inflammation of the intervertebral discs. More about that later.

Next slide, please. This slide identifies the addressable annual market opportunity for our product portfolio. RYONCIL, the first in the mesenchymal/stromal cell to be [MSC]-therapy approved by the FDA; 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 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.

Of course, we have multiple additional multi-billion opportunities from existing 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 on 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 US insured by commercial and government payers. Importantly, Medicaid coverage exists for both federal and all states. 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 self-therapy products was $17.2 million, up 191% on the prior year. We're delighted that the growth in revenue was driven by the successful launch of RYONCIL 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. 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 USD162 million or AUD247 million.

Now, I'd like to have Andrew take us through some details on the financial results.

Thanks, Silviu.

Turning to slide 11, we have the financial results for the year ended June 30, 2025. All numbers are reported in US dollars.

Total revenues on cell therapy products are up 191% on the prior year. Cost of revenues related to product sales was $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 recognize the loss of $14.9 million in FY 2025, a non-cash re-evaluation of potential future third-party payments. The re-evaluation 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, about 10 to 12,000 are performed in the US. 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 7% to 9% -- associated with 79% mortality.

About 50% overall of acute Graft Versus Host Disease patients do not respond to steroids. In the pediatric age group, RYONCIL is the only FDA-approved product for these children.

Next slide, please. The results from our pivotal Phase 3 trial that underpinned the successful approval of the product RYONCIL is highlighted in this slide. In a 54-patient single-arm multi-center Phase 3 trial across the US, 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 four and five 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. In fact, the child who has acute GVHD and is treated well without therapy and is able to be discharged from the hospital costs about $1.8 million less than a child with acute GVHD who's 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. 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. 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 and Clinical Trials Network, the BMTCTN. The objective is to extend the products label from children to adults with this devastating disease, enabling RYONCIL to be used in a population approximately 3 times 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 two areas that we believe RYONCIL has a place. More than 3 million people across the US 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, 20% of patients with ulcerative colitis that's non-responsive, eventually require surgical treatment of their disease. What is eerily 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 in these patients.

Next slide, please. The 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 the 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 bronchitis, which occurs in about 30% of patients in isolated conditions in ulcerative colitis. In these 13 adult patients with Biologic Refractory Inflammation, local administration into the rectal mucosa of 20 to 80 million allogeneic bone marrow derived mesenchymal/stromal cells was performed under endoscopic injection.

As you can see on this slide, by six weeks, mean clinical and endoscopic scores significantly improved. The objective is to achieve remission as early as six weeks.

Next slide, please. More recently, local administration of RYONCIL was shown to improve outcomes in patients with Biological Refractory Extensive Colitis. In a12-patient pilot study of Biological Refractory Inflammation of the Colon, local administration of RYONCIL of a single dose resulted in clinical and endoscopic responses and remission by six 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, six 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.

You can see in the pathologic figure at the bottom, on the left-hand side, the colonic mucosa in the active disease is full of inflammatory cells and destruction of the of the crypts. Six 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 resulted in early remission within four weeks, following multiple intravenous infusions in patients who failed the prior biologic, we plan to initiate a pivotal study of RYONCIL for early remission in patients with Medically Refractory Inflammatory colitis. We'll be updating the market in due course.

Next slide, please. Now, let me move to our second-generation product, rexlemestrocel. 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 radio frequency 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 can target these patients very early, usually as early as six 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 3 trial, based on a single injection of rexlemestrocel, together with a 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 rexlemestrocel 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 heart attacks and strokes. Over 60% of patients with chronic heart failure have underlying ischemia. These patients are at highest risk of recurrent major adverse events involving the large vessels, such as hearts and strokes.

Slide 29. This complex slide really just focuses on, again, the patient journey. Patients progress from early-stage disease, class 1l moderate disease, Class 2; and then, to Class 3 and Class 4. We target the most severe patients or inflammation progresses to Class 3 and class 4 and ultimately, [deaf].

In these patients, we've completed two Phase 3 trials, both randomized controlled trials with end points that have demonstrated that in patients with inflammation, we can reduce the end points of severity and reduced mortality.

Next slide, please. Slide 30 demonstrates, on the left-hand side, that compared to controls, we significantly reduced in a pivotal Phase 3 trial. Both patients with inflammation on the left hand side measured by CRP and the right hand side measured by IL-6 the severe risk of mortality, quite dramatically, over a five-year period of follow-up.

Next slide, please, 31. In this slide we summarize the overall results in our 500-patient randomized controlled study, where you see that, on the left hand side, the two-point (inaudible), 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.

What this essentially tells you is that the patients who are at the greatest risk of mortality are precisely those patients who are most likely to respond to a single injection of rexlemestrocel 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. The FDA stated the totality of the trial results from these two studies could support an accelerated approval pathway under the existing [IMAT] designation of the program.

We met recently and aligned on items required for filing a biologic license application for (inaudible) or regarding chemistry, manufacturing controls, potency assays, and the proposed design and primary endpoint for a confirmatory trial, should approval be obtained.

We could now go to the final slide, slide 34. This identifies our corporate milestones and updates on the 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. We'll initiate a study for inflammatory colitis.

For chronic heart failure in adults with low ejection fraction, we're preparing for an accelerated approval filing for (inaudible).

Finally, for rexlemestrocel in chronic low back pain, a confirmatory Phase 3 trial is actively enrolling across multiple sites in the US 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 the placebo control trial with a 12-month follow up following the completion of the last patient enrolled, which we expect to happen toward the end of this year or during the first quarter of next year.

On that basis, I think I'll say thank you for listening to us. I'd like to open this call to questions.

Thank you.

(Operator Instructions)

Ed Tenthoff, Piper.

Great. Thank you very much. Congrats on 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 (inaudible)?

Thank you.

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

Yeah. Sorry for the background noise.

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. We'll provide product. We will contribute to funding.

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. But we think that our product will substantially add to the early responses and overall survival.

We expect to initiate the study this this year. We'll come back with specific dates and duration.

Great. Thank you. And then, can you give us a little more color on how the back trial -- the Phase 3 chronic lower back pain trial -- is coming along?

Sure. This is a huge opportunity for us and 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 two to three 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. If we can result in opioid avoidance, it's incredibly important, at this moment in time.

In fact, in our first Phase 3 trial, we saw 3 times 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 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 US. 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. To date, we're enrolling well. There are no safety signals.

Obviously, the trial is double blind so we don't know, really, how it's coming along. But we're confident that we'll 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. Following the last patient in, there'll be a 12-month period of follow-up, in order to read out the trial's primary endpoint of pain at 12 months.

That's very helpful, Silviu. Thank you.

Olivia Brayer, Cantor.

Hi. guys. Congratulations on a really strong start to the launch. Thank you for the questions.

Are you guys able to disclose how many monthly treatment kits have been administered, to date? What can you tell us about inventory dynamics here? Was any of this net revenue actually related to inventory? As you think about going forward with the launch, what level of inventory would you typically have to maintain, going forward?

And then, I've got a couple follow-up questions, if you don't mind.

Sure. 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 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 -- 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. As each infusion goes out, we replenish.

Typically, we send two kits per week per child. So that's how we keep stocking our inventory, if that makes sense.

Does that make sense, Olivia?

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

You can -- it's very easy. We're very transparent, right? So each kit costs -- we know what each kit costs. You know what it costs.

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-naïve patients or will the entire study really be Jakafi-refractory patient population for the adults?

Yeah. With respect to gross-to-net, we expect that to be pretty stagnant, pretty flat. Yeah. That's the number that we've given you today. It's what we expected to stay, yeah.

With respect to the adult trial, we've decided not to go to Jakafi-refractory patients but rather, on top of Jakafi. The reason for that is it provides us with the largest possible market entry.

The second-line, in other words, straight after steroids, which 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. We believe that adding ourselves 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 a response at day-28.

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.

Okay. Great. Thank you. Very helpful context.

Elyse Shapiro, Canaccord.

Hi, guys. Thanks for taking the questions.

Just on the adult study, are you planning on disclosing a bit more details from your FDA minutes, now that you've probably gotten them? Are there any 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, in 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 and 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 would be the objective, right?

That allows our product to be used as early as possible in the most severe patients, which is a market size that's about 3 times the current pediatric addressable population. 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. What are the timelines to more detail on what a trial would look like? Do you need to do any additional dose-finding work before commencing a pivotal registrational study?

We've got a KOL group that's been assembled. These are experts in trial design. They've managed and run trials of the latest innovative therapies for ulcerative colitis and Crohn's disease, both in the US 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 a challenge. Remission remains a target that is not well addressed by any of the biologics. 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. We'll update the market this quarter.

Great. Thanks. Just one more, if I may. Stepping back and looking at the number of kits that have been sold, are they, to your knowledge, all being used in pediatric GVHD or could that be inclusive of some additional indications too?

Yeah. We have no way of knowing, specifically, how much of the product is used for acute GVHD versus for other indications because the 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. A 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.

There have been certain situations where children with GVHD who've fallen between the cracks and had not been domiciled, they've not had insurance, for those children, we provide product, obviously, free of charge.

We also have a Compassionate Care Use Program for adults. It can make our product available on an as-needed basis, 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 in that: we don't really have on how it's being used by individual physicians.

Right. Thank you.

Michael Okunewitch, Maxim Group.

Hi, Silviu. Thank you so much for taking my questions today. Congrats on a great start to the launch.

To start off, I'd just like to see you with a sense of how the initial sales were distributed over the period? Were they waited 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.

Yeah. Look, I think it's a little bit early to make projections, right now. We've only had, really, one 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 on board, 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?

Yeah. No. I think it's a good question. Thank you.

I think you mentioned that, right? We're very pleased with the feedback that we've received, so far, from multiple treatment centers and the healthcare providers (inaudible). And so it's certainly already making a meaningful impact in the treatment of these children.

The performance today, especially for the first quarter alone, from launch, has been outstanding. I would consider not only compare to your own expectations but also, when you benchmark that against all the successful (inaudible) disease launches, right?

Of course, I think we're all focused on building the infrastructure. You mentioned that in terms of failures, in terms of onboarding, it is needed to ensure that we continue to reach our full potential.

So yeah, while we do expect growth, we also recognize that this baseline work is super important for our future performance.

All right. Thank you. And then, just one more for me and I'll hop back into the queue.

I wanted to get a sense, in particular, on the context of the changes that we've seen at the FDA over the past 6 to 12 months. What 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?

Yeah. We had a terrific meeting. 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 RYOCIL. I think getting alignment on that is really important ahead of the filing.

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 [mese] events, reduce mese events and mortality.

So we're very pleased with the interactions with the FDA. We're working diligently to get our documents in.

Thank you. I appreciate the update. I'm looking forward to future progress.

John Hester, Bell Potter.

Yeah. Good morning, Silviu. Just a quick question there on market access. 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 US? Are you halfway there? Can you give us some sense of your remaining market access activities?

Marcelo, would you like to address that?

I think the --

Yeah. Very happy to do it. The short answer, yes. We're already there for sure.

I think on the payer side, we 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. I think, importantly, Medicaid is over and is in place everywhere in all states as of July 1, right?

In addition to that, which I think addresses your part of the question, is that the commercial payer support has also been strong. All of the major players and that includes (inaudible) United, (inaudible), which is the Blue Cross Blue Shield, right? They have issued favorable (inaudible) policies for RYONCIL, right?

I think, notably, these policies do not require (inaudible) therapy, which simplifies patient access significantly, right? 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. It goes into effect on October 1, allowing for more efficient billing from our clients or from our customers in (inaudible), along with CMS for the (inaudible), right?

So that will be very important as we move forward. October is around the corner. That will be important not only for us but also for our clients.

All right. Thank you.

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 US. 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. 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.