Mesoblast Limited (MESO) 2026 Q4 法說會逐字稿

Hello and welcome to the Mesoblast financial results for the full year ended June 30, 2026.

An announcement and presentation have been lodged with the ASX and are also available on the Home and Investors 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 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 now like to turn the call over to Dr. Silviu Itescu, Chief Executive of Mesoblast. Please go ahead.

Thank you, operator. Good morning, good afternoon, and thank you all for joining us on Mesoblast's financial results and operational update for the period ended June 30, 2026.

With me are our Chief Financial Officer, Jim O'Brien; Chief Commercial Officer, Marcelo Santoro; and our Head of Orthopedic, Musculoskeletal Program, Roger Brown.

If we could go to slide number 2, please. Mesoblast is the leader in allogeneic setting of therapies.

RYONCIL, our lead product for mesenchymal stromal cells, is the only FDA-approved product of its type, a first-in-class therapy, and has undergone a successful first-year launch, with net revenues of $115 million for fiscal year 2026, first full year, post-launch.

This is a highly profitable single product on a standalone basis and the proceeds from revenues generated from this product are being reinvested in our Phase 3 programs and in our manufacturing for potential blockbuster opportunities.

We’ve built a mature commercial capability with an infrastructure that supports product launch, growth, and, beyond RYONCIL, multiple expansion indications beyond GVHD and other areas.

We’ve built a specialized sales team focused on hospitals, transplant centers, and specialists. And we’ve built a robust Phase 3 pipeline with multiple blockbuster opportunities, including chronic low-back pain that I’ll be talking quite a bit on today and inflammatory heart failure.

RYONCIL label expansion beyond GVHD is focused on pediatric -- adults and children, rare inflammatory conditions, such as Duchenne.

Next slide, please. Our market leadership position is underpinned by our so-called moat. We have a global IP portfolio of more than 1,100 patents and patent applications, which provide commercial protection beyond 2044.

Our dominant IP protects our cells, our manufacturing capabilities, and our multiple indications and commercial opportunities.

We have a first-mover advantage in that RYONCIL is the first and only mesenchymal stromal cell product approved by the FDA. We’re leveraging FDA guidance on how approved products such as RYONCIL can be expanded to obtain additional label or new indications.

We’ve completed multiple large US-based randomized clinical trials, which continue to provide evidence of efficacy of our platform technologies.

We are the leader in complex manufacturing with strong IP protection, significant know-how advantages, and demonstrable FDA alignment, scale-up capability, and ability to leverage across our product pipelines.

And, finally, we’re investing further in our next-generation technology to maintain our leadership position and enhance our tissue-homing characteristics and have new products that leverage our existing development to date.

Next slide, please. This slide is a snapshot of our worldwide leadership in allogeneic mesenchymal stromal cell using a portfolio that leverages two major platforms, our rexlemestrocel platform in green and our remestemcel platform in blue.

As you can see here, the remestemcel platform, branded RYONCIL, is obviously now in the market for children with this life-threatening disease called acute graft-versus-host disease, but is also being expanded in adults in markets that are at least 3 times bigger than the pediatric market.

The total addressable market for the GVHD opportunity in children and adults is in excess of $1 billion.

Remestemcel, or RYONCIL, is also being developed for other rare inflammatory conditions where the underlying mechanism of action can be leveraged beyond GVHD. One of these indications is Duchenne.

Duchenne is a very large unmet need in children as young as two to three years old. And these unfortunate children continue to develop inflammation of their muscles, the muscle destruction, and end-organ damage involving the heart and lungs.

On the basis of pre-clinical data, plus leveraging the approval of RYONCIL and its mechanism of action, the FDA cleared an IND to commence a Phase 3 trial for potential registration of the product in this very large opportunity.

The second-generation platform, rexlemestrocel, is based on using monoclonal antibodies to isolate an even more potent platform technology of stromal cells that are highly purified and demonstrated significant outcomes across multiple major indications.

This platform has been focused on local delivery in the heart, in inflammatory heart disease, and in the orthopedic applications, particularly intervertebral disc disease, where a single injection into the disc space has resulted in substantial and durable long-term reduction in pain.

The total addressable markets for rexlemestrocel, just in cardiac disease and in back pain, in aggregate, exceed $20 million -- huge blockbuster opportunities.

Next slide, please. Fiscal year 2026 proved to be a successful transition from the R&D company that Mesoblast was to a commercial company with delivery of major milestones.

In our first full commercial year, we were successful in demonstrating a US launch of RYONCIL, with fourth-quarter net revenue of $36 million and annual revenue in first year -- in FY 2026 -- of $115 million. Our gross profit on total sales, excluding amortization expenses, was $110 million.

The major milestones that were achieved during the fiscal year were registration trial for label extension of RYONCIL into adults, with steroid-refractory acute graft-versus-host disease that has commenced, and is currently enrolling across more than 40 sites in the Unites States.

A successful IND submission with clearance by the FDA of our Phase 3 trial for pediatric Duchenne; a completion of 350 patients treated in the pivotal randomized controlled Phase 3 trial for the blockbuster indication of chronic low -back pain, this trial seeks to replicate an earlier trial which achieved more than 12 months reduction in pain from a single injection.

The total patient numbers, importantly, in this trial increased from 300 patients to 350 patients as a result of strong demand from the trial investigators to have their patients enrolled in this innovative program for patients who, otherwise, have no alternatives.

Now, let’s move to our financial update, which will be presented by our Chief Financial Officer, Jim O’Brien.

Thank you, Silviu. And good day everybody.

On slide 8, our income statement for the year ended June 2026, as compared to June of 2025.

Important to note here, as Silvio pointed out, we had $115 million of net revenue for the year, a very exciting year for us that we expect to build on in the future.

We continued to invest in our R&D programs. Product-development cost for the year were $17.3 million. And our continuing R&D investment in our Phase 3 programs were roughly $21.2 million.

We did support the revenue growth of RYONCIL with the increased investment and sales and marketing expenses of roughly about $18 million, with a very strong commercial team now built around the launch. And we continue to penetrate the market and grow market share.

Importantly, we reduced our net loss after taxes this year by 44% to $57.5 million.

Next slide, please. Our balance sheet remains very strong. We ended the fiscal year in June with $103 million.

For the year, net cash usage was $43.8 million, and importantly, in the second half of the fiscal year, our cash burn was $13.4 million compared to $50 million in the same period a year ago.

We are working towards profitability. We have a very strong cash-flow forecast. Plus, we’re controlling costs in all areas across the businesses. And we’re deploying funds where our operations are most needed to support operations and to continue to grow the company.

Our operating plan includes spending money on our Phase 3 programs, building out our manufacturing capabilities, supporting BLA filings, and having the appropriate inventory levels to support patient demand.

Earlier this year, as we’ve reported, we entered into a credit-line facility of $125 million, replacing a long-term debt. That carries an 8% interest rate. There is no amortization of the principal for five years.

Our balance sheet is very strong to support our upcoming fiscal year in terms of being able to deploy capital where we need to.

Next slide, please. With that, I would like to turn it over to Silviu, again, to take you through our acute [graft-associate-vers-host] disease programs and to address the accomplishments that we have reached, so far, this year.

Thanks, Jim.

This next slide summarizes the key accomplishments, so far, for RYONCIL’s commercialization in acute GVHD in children.

Importantly, in green, the real-world experience continues to show the difference we are making in these children and their outcomes, with 84% survival early in the disease process with treatment of RYONCIL in children who, otherwise, would have a very high mortality.

As I mentioned earlier, the net revenue exceeded $125 million since launch of last year. We have now got more than 50 centers onboarded.

And, importantly, insurance coverage shows that more than 98% of US lives across the country are now covered.

Medicaid cover federally was in place early, mandatory in every state. And we were very pleased, having received a J-code in October 2025, which continued to contribute to the growth in revenues.

Finally, our focus in the next 12 months will be to expand the product adoption in the adult market. And I will talk about that in the next couple of slides.

Next slide, please. So this is a snapshot of strategic approach to continued growth, based on identifying and prioritizing those appropriate patients using various tools at our disposal, reinforcing the superior outcomes, particularly the earlier the product is used, the better the outcome, in these very sick children.

We will continue to access reimbursement pull-through and empower caregivers to demand that RYONCIL be used in their children as soon as the disease is diagnosed.

Next slide. The adult form of this disease is a huge opportunity for RYONCIL growth. There are more than 2,000 adults annually in the US with steroid-refractory graft-versus-host disease. And of these, 50% approximately have got Grade 3 or 4 disease, which is associated with high mortality.

Ruxolitinib is the only drug that is approved in the US as second-line for adults with acute GVHD. However, only about 42% of patients with the severe form of the disease -- Grade 3 or 4 -- actually achieve a response at day 28 to ruxolitinib.

And these patients who do not respond have a very, very dismal survival, as low as 20% to 30% by day 100. So there is a very large unmet need in adults who are currently being treated with ruxolitinib for steroid-refractory acute graft-versus-host disease.

In these adults, mortality remains very high. Importantly, those are the very adults who have been enrolled under expanded IND under compassionate care by Mesoblast for treatment with RYONCIL.

And unlike other therapies which result in, as I said, survival of only 20% to 30%, we’re seeing a 76% survival at day 100 in these patients with terrible outcomes.

Next slide, please. This is a slide that provides a snapshot of, on the left-hand side, survival in patients who have failed ruxolitinib as second line and who are then being treated with other agents as third line; and on the right-hand side, patients who have failed ruxolitinib and other second-line agents have then been offered RYONCIL under our compassionate-care program.

What you can see here is, on the left-hand side, the day-100 survival where the dotted line is is a dismal 20% to 30%, roughly 25% in this particular report; whereas, on the right-hand side, patients who, otherwise, meet the exact same criteria have a 76% survival -- adolescents and adults -- when they’ve been treated for four to eight weeks with a regimen of RYONCIL.

Therefore, we believe that this is a treatment that should be offered to these patients, a potential adult market of more than 600 patients annually with Grade 3 or 4 disease, refractory, to ruxolitinib or any other agents.

Next slide, please. But even more proximal than that is the entire second-line market in adults with acute graft-versus-host disease. As mentioned earlier, there are more than 2,000 adults who annually develop Grade 3 or 4 disease as part of their disease process after bone-marrow transplant.

This is a market that’s 3 times bigger than the pediatric market. And this is a market that we have currently addressed through a randomized controlled trial of 180 patients, actively enrolling across the US.

These patients in this trial are being randomized one-to-one to ruxolitinib alone versus ruxolitinib plus RYONCIL. We are hoping to see a significant benefit in terms of a day-28 response and a further benefit in overall survival.

And if we’re successful in this trial, RYONCIL would become part of the second-line treatment regimen in these high-risk patients with Grade 3 or 4 disease.

This trial is expected to take a total of 18 months to complete, but it will have an interim analysis when approximately 57% of patients are enrolled or close to 100 patients.

We expect that interim analysis to be performed in the fourth quarter of 2027. If successful, that would allow us to move forward with a BLA filing for a label extension.

Next slide. Now, let me move on to what we think is our largest and most exciting near-term blockbuster opportunity. That’s our second-generation pipeline, rexlemestrocel, for chronic low-back pain.

The unmet need is substantial. Of the 35 million patients across the US who suffer from chronic low-back pain, about 60%, the cause is degenerative-disc disease, which is an inflammatory condition.

And of these, about 7 million fit into our criteria of moderate-to-severe disease within the first five years of diagnosis, refractory to all medical therapies, including opioids.

The addressable market here is at least USD10 billion. The major milestones to commercial launch are a Phase 3 trial that has completed treatment. All 350 patients have completed treatment.

This Phase 3 trial seeks to confirm an earlier Phase 3 trial, which showed pain reduction at 12 months. This is an FDA-approvable endpoint, as supported by various meetings and documents with the FDA.

The trial read-out is going to be in the second half of calendar year '27, followed by a BLA filing with potential approval in calendar year '28.

Next slide. This is a diagram that shows what the cause of this severe degenerative disease, back pain, is all about.

On the left-hand side, you see what a healthy intervertebral disc looks like. On the right-hand side, you see what a degenerative intervertebral disc looks like. In the middle of that area in red, right in the middle of the intervertebral disc, is inflammation. That is where your immune cells come in to try to restore disc integrity.

But in the process of trying to repair, they release a cytokine storm. And many of you are familiar with that term from the COVID period but a cytokine storm, it inadvertently destroys healthy parts of the disc.

You lose disc height. And you have severe pain as your outcome. That is what we seek to address with a single injection of our cells right in the middle of that inflamed disc.

Next slide, please. What is the patient treatment journey in this disease? Well, after conservative treatments that include non-steroidal, anti-inflammatory drugs, there is very little.

After patients have failed for three months or more to conservative approaches, many physicians still prescribe opioids. And, unfortunately, opioids are very weak agents that reduce pain.

They lead to a continued requirement for progressively increasing dosing. There is addiction behavior that is associated with it and, unfortunately, accidental overdosing.

Beyond opioids, there really is not anything else that can address the severe, unremitting chronic pain. And so many patients then move on to interventional approaches that are really surgically based.

And that includes epidural injections that are guided by radiography, but also radiofrequency ablation, spinal-cord stimulation, and intrathecal pumps. Beyond that, all we are left with are severe invasive surgeries.

So there is a large unmet market that we are targeting to treat moderate-to-severe chronic low-back pain that is totally unaddressed at this point in time.

Next slide, please. In the earlier Phase 3 trial, which this snapshot is taken from, in 202 patients who received a single injection, in blue, of rexlemestrocel, or in red, rexlemestrocel combined with a carrier, what we see is that significant pain reduction was seen as early as 6 months, maximal by 12 months, and durable through at least 36 months, and in comparison to a saline injection in green, which shows very little effect.

Just to put this into context, a very mild reduction in pain from a saline injection is about equivalent to what you would expect to see with opioids. So this is a dramatic reduction in pain that is long-lasting from a single injection.

And these are the data that we are aiming to replicate in the 350-patient pivotal trial that has just completed treatment.

Next slide, please. Now, who are the physicians that administer this product? Today, the dominant caregiver that provides treatment to these patients are the pain specialists in multidisciplinary clinics, where a patient either goes directly or where the patient is referred to from his primary-care physician.

Next slide. When we have done a formal outreach, a commercial outreach, to various types of physicians, what you see in this middle panel that is circled, amongst the pain specialists, who are the experts in this space, 85% of them, on reviewing the data from the earlier trial I just showed you, are more likely, on that basis of those results, to recommend rexlemestrocel for chronic low-back pain than anything else, if these results were to be replicated in a commercial product.

Next slide, please. Let me move on to our other blockbuster indication, which is chronic heart failure, also from a single injection with rexlemestrocel.

We are targeting the sickest end-stage patients because that is where the biggest unmet need is today, as we move forward in the broader indications.

Despite an artificial heart, a left ventricular-assist device, that is currently implanted in the left ventricle of these patients who, otherwise, would have a 50% death rate in the first 12 months, the right side of the heart continues to be unprotected, continues to have inflammation, and continues to fail.

Right-heart failure is the number 1 cause of death in these end-stage patients, despite the fact that they are being kept alive with an artificial heart in the left side of the heart.

Next slide, please. And in registry data that cover more than 6,000 patients -- this is very recent data from 2021 and continues to, in 2026, be supported by registry data -- the number 1 cause of both death, hospitalizations, is right-heart failure.

And you can see as many as 28% get right-heart failure in these large registry studies. And when you get right-heart failure, you have back-up of blood in your liver and your gut, and you have terrible bleeding. And so so they die of multiple complications, including severe bleeding from the gastrointestinal tract.

Next slide, please. Now, a randomized controlled trial was performed in conjunction with the investigators across the US who perform these surgical procedures.

In that study, at both 6 and 12 months, a single injection of rexlemestrocel reduced by fivefold or more the incidence of major life-threatening gastrointestinal bleeding. And this was due to strengthening of the right side of the heart and reduction in right-sided heart failure.

Next slide, please. In addition to reducing bleeding, which was the principal efficacy endpoint in that trial, as you can see here in the top panel, we also reduced hospitalizations from right-heart failure by about fourfold at 12 months in all patients and particularly in those patients at highest risk, which were ischemic patients.

And, most importantly, as you can see in the panel below, survival was improved from a 30% mortality rate in these high-risk patients to about 9%. And this was significant.

Next slide. So our strategy is to file for full approval of REVASCOR in this high-risk patient population at risk of right-heart failure and severe life-threatening bleeding.

And if we are successful to gain FDA approval, then this approval can be extended into the much larger patient segment with Class 2 and 3 heart failure, where there is approximately at least 1 million patients in the US alone.

Next slide. So in summary, the presentation today has told you what we’ve done, what we intend to do, and how we’re going to do it in the next 12 months.

RYONCIL is commercial today. And we seek to have multiple label extensions for this product in order to strongly grow our revenue base.

We seek to increase penetration of the pediatric market, maximize early use, and position the product as both a third-line and a second-line treatment for adults with steroid-refractory graft-versus-host disease, markets that are more than 3 times bigger than the current pediatric market.

Our focus beyond that is on additional inflammatory diseases, both in pediatric patients and in adult patients. And the first that we’re targeting is Duchenne, which is a pediatric disease that’s progressive without any cures today, that begins as early as three to four years of age.

In addition, we’re pursuing strategic partnering opportunities for inflammatory conditions in both children and adults with various appropriate strategic partners.

For our second-generation pipeline platform, rexlemestrocel, we’ve taken the program right to the end and retained full value in the US market for the blockbuster indication of chronic low-back pain.

The pivotal Phase III trial of 350 patients has completed treatment. And we are following these patients through 12 months, with the trial to complete mid-2027 calendar year and then, (inaudible) -- a positive read-out positions us for a BLA filing for a blockbuster indication.

Our chronic heart-failure program is -- we seek to complete our BLA filing with the FDA, with the expectation that, if approved, that can be expanded into the much larger Class 2, 3 heart-failure indication, which will be an opportunity for a strategic alliance.

On that note, I think I’ll stop. And we would be delighted to take questions. Thank you.

Thank you. (Operator Instructions)

Edward Tenthoff, Piper Sandler.

Great. Thank you very much. And it’s really exciting to see all the progress you guys are making.

I had a question. Great growth from RYONCIL in the current label. Would you hazard a guess to what growth we should be expecting over the next fiscal year? How far do you think we are in terms of penetration of the kids with steroid-refractory GVHD?

My second question really came down to, with so many different pediatric inflammatory diseases -- and with the backdrop that DMD’s been tough, there is some competition there. Why did DMD come to the top of the list in terms of secondary indications for childhood inflammation?

Thanks a ton, guys.

Sure. These are all great questions, Ted. Thank you.

I think with respect to guidance, I think we’ve only just completed our first year. The next 12 months, we’ll assess it in due course.

I know that Jim is very keen to review progress. And by mid-year, we’ll have a better sense of continued growth. But we certainly expect to see double-digit growth in the coming 12-month period.

I think (inaudible) -- your question pertained, also, to our potential areas of growth in new inflammatory conditions. Why Duchenne’s is a great question.

Duchenne’s a complete unmet need. To your point, there are various people looking at how to use cell therapy in Duchenne’s patients. Most of those people are looking at later-stage disease, 10 years and older, at a point in time when the children are already non-ambulatory.

At that point, we believe the disease is very late. That’s not where we think we can make the maximal difference and benefit. Maximal benefit, we think, should be obtained in children as early as age three or four, well before the age of nine, for example, when there is maximal inflammation by both T cells; macrophages in the muscles -- in skeletal muscles; and early on, even in the cardiac muscle.

The mechanism of action of our cells with graft-versus-host disease lends itself extremely well to targeting the T-cell process that is going on in the skeletal muscle of these young children.

If we can turn off that disease early, there woud not be any need for products later on. And, today, there are a number of gene-therapy approaches that aim to improve or bring back some of the normal dystrophin protein.

None of those are going to be curative. And all of those will continue to be accompanied by severe T cell-mediated inflammation of the skeletal muscles.

So we think that we have a unique product built on the mechanism of action in GVHD -- and we’ve demonstrated this in pre-clinical studies -- that is both likely to have a major impact early on in the disease and be additive to the gene therapies that are out there.

That's very helpful. Thank you, Silviu.

Thank you.

Olivia Saunders, Cantor.

Hi. Thank you for the question.

What can you guys tell us, at this stage, just around how enrollment is going in the adult GVHD study? And for that interim analysis later next year, is that alone enough for a potential sBLA filing? Or is there anything else the FDA has actually asked for as part of that adult submission?

And then, also, just wanted to ask about powering for that trial design, if you guys have disclosed that; and how you ultimately decided on a treatment effect on top of jakafi, just in terms of effect size.

Really, just trying to get a better sense for your overall confidence level around enrolling the right patients that will produce a high-enough response rate to hit your stats goal.

Yeah. These are great questions. Let me see if I can take those one at a time.

The basis for starting this trial -- and this trial is being recruited across more than 40 sites in the US, and it's performed in collaboration, in partnership, with the Blood and Marrow Transplant Clinical Trials Network, BMT CTN, which is a network of 80% of all the top bone-marrow transplant centers across the US.

So it's been validated by this group, which is an NIH-funded organization, which tells you where the unmet need is because they're driving this indication. The unmet need is in patients with Grade 3, 4 disease who are currently being treated by the only approved drug, ruxolitinib.

In that group of patients, which is about 50% of the adult GVHD market -- in that group of patients -- ruxolitinib does not perform very well, has not demonstrated a survival benefit with overall response rates in the 50% range.

So there is a big unmet need because these patients -- if 50% of patients fail ruxolitinib, I showed you earlier, these patients have nothing else beyond that, with a 25% survival at day 100, once they've failed ruxolitinib. That's where the big unmet need is.

We're addressing this market in two different ways. I showed you data where RYONCIL, once ruxolitinib fails, can rescue these patients and get a 76% survival outcome. That's great, but it's a sequence that we and the physicians believe should be addressed even earlier.

And so the trial design here is a trial in that group of patients, Grade 3, 4 disease, randomized one to one to ruxolitinib only, where we expect a 50% failure rate, versus ruxolitinib plus RYONCIL, where, based on a single-center pilot study, we would expect to see an overall treatment benefit of at least 75% day-28 response.

So that's how the trial has been powered, with the powering approximately 85% to 90%.

Your question was then -- actually, I'm sorry. I believe the expectation is that it'll be about from 50% to about 70% overall response rate.

Our interim analysis on 57% of patients is based on the assumption that we might do better than that, actually, and achieve a responder rate north of 75%. If we're successful and do achieve that, then 100 patients will be sufficient to declare success.

And so both of those, the full powering of 180 patients and the interim analysis to declare early success, have been vetted with the FDA. And both of those, if we overachieved at the early interim or if we achieved the expected outcome at the full study -- both of those -- would support an sBLA filing.

Okay. Great. Thank you.

And have you actually -- are you able to disclose the percent or the number of patients that you've enrolled at this point?

Look, we've enrolled. (multiple speakers) --

Or suffice it to say you're still feeling good about the interim?

Patients have been enrolled, treated. We expect the hockey-stick effect, as we enroll more by the end of this year.

And then, we expect to have a substantial number on a monthly-accrual basis from January onwards, such that we will have achieved 100 patients roughly by the fourth quarter of next year. We're on track to do that.

Madeleine Williams, Canaccord.

James -- thanks for taking my question -- just as it relates to -- just off the back of the expansion into the adult population, you have mentioned that you have treated adults and adolescents. And there has obviously been some good data that has come out as it relates to that.

What have the conversations been with the FDA about your capacity to treat the later-stage patients at an earlier time point and how feasible that might be?

Yeah. Look, as you can imagine, those discussions are very active. What I would say is that there is a new leadership at the FDA. And we are very pleased with the new leadership, both at the level of the most senior leadership of the FDA, as well as at the CBER level, as well as the cell- and gene-therapy level.

There has been evident flexibility shown by the new leadership in other areas of cell and gene therapy. We are in discussions. And we will have meetings this quarter with the agency to discuss some of these new potential areas of label extension.

Thanks for that. And just as it relates to the timeline associated with DMD, you touched on it, but do you have any clear plans to initiate the pivotal trial in that space in the next 12 months?

Well, we certainly do, absolutely. We, at the moment, are in discussions with a group of clinicians across the US to put in place what the appropriate sites need to be and in discussions, also, with the stakeholders of the parents and children to ensure that we have the right groups that can recruit most rapidly and most efficiently.

As soon as all that's in place, the study is ready to begin.

Great. And just, finally, from me, and I'll jump back in the queue. Just for the next 12 months and growing RYONCIL in the pediatric business, do you foresee that there'll need to be additional spend in that core business to continue growing the revenue?

Hey, Madeline. It's Jim O'Brien. Let me try to address that.

I think we've got a good, clear line of sight in our spending on our important Phase 3 programs over the next 12 months. The capital allocation that we have and the plan to do so is crystal clear to us.

And execution is of utmost importance in terms of achieving our milestones, as we laid out today, as well as controlling costs and reducing our cash burn.

So our plan for the new fiscal year is to be able to fund the programs that we've outlined today in a very judicious way.

Great. Thank you.

(Operator Instructions)

John Hester, Bell Potter.

Good morning. A question for Jim.

Jim, just looking at balance sheets, you've got cash of $103 million, net debt of about $15 million, and your cash burn in the second-half, you said, reduced to about $13 million.

What is your expectation of the need to raise additional capital at this time?

Well, I think we want to keep all of our options open.

With that being said, my expectation is that our cash burn in fiscal '27 will be less than it is in fiscal '26, given the growth of the RYONCIL franchise and the market growth that we expect, cash receipts that we expect.

Our budgets are very clear in terms of where we're allocating capital. And so we'll keep our options open. But, at this time, our balance sheet is very supportive of -- recall that our debt is all long-term. It's got a five-year balloon on it.

So when I look at the cash balance that we have, our strong working capital, the company's balance sheet can support the growth that we've spoken about today.

And we will always look to continue to invest in growth opportunities and be supportive of that, from a financial standpoint.

And, perhaps, just to follow up, at what quarter do you expect to go cash flow-positive from operations?

Yeah. I'd rather steer away from that question at this point. It's early in our fiscal year. And, as you know, when you talk about spending on R&D programs and enrollment, we're doing a number of projects around manufacturing processes.

We are the leader in this space. Quarter-by-quarter fluctuations can happen. But we have a clear line of sight in terms of what our priorities are. And Silviu and I are guiding the company towards profitability for the next fiscal year and beyond.

So quarter by quarter, I think it's a little tough to pin me down on that, but I would expect to see in our future filings this year, certainly. a lower cash burn than we experienced in 2026.

Okay. Thanks. That's all.

Thanks. That brings us to the end of today's call.

I'll now hand back to Dr. Itescu for closing remarks.

Great. Thank you, everybody, for joining us today and for the very insightful questions. We hope we've given you a very, very clear trajectory of the company.

We've had a terrific year the last 12 months. We think the next 12 months are going to be even more exciting on multiple areas, including growth of our revenue stream for RYONCIL and, most excitedly, about our back-pain blockbuster opportunity.

So we look forward to speaking with you all in the short term. Thank you, everybody.

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