Mesoblast Limited (MSB) Earnings Call Transcript & Summary

Good day, and thank you all for standing by. Welcome to the Mesoblast 2022 Annual General Meeting. I would now like to introduce Chairman, Joseph Swedish, to begin the conference.

Good morning, ladies and gentlemen. My name is Joseph Swedish, and I'm the Non-Executive Chairman of Mesoblast Limited. I'm joining you today from the U.S. and will be chairing this meeting virtually. It's just past the appointed time and as we have a quorum present in the room, it is my pleasure to now declare the 2022 Annual General Meeting of Mesoblast Limited formally open and to welcome you on behalf of my fellow directors. We're all very pleased you have joined us in person today and welcome the opportunity to update you in person regarding the achievements of our company during the past year. In addition to our shareholders present in the room, this AGM is being webcast for those who have not been able to attend in person. I welcome the listeners to this webcast. If in the unfortunate situation, we experience technical issues that impact the meeting, I'll make an assessment of the circumstances and then communicate further with you. If the technical issues are isolated to my location, then I have nominated Jane Bell, who is a member of the Board, to assume the chair and continue the meeting. In the event that we take steps to adjourn the meeting, we will make an announcement to the ASX with all relevant details. Before we proceed with the meeting, there are a couple of housekeeping matters to address. First, I would appreciate if all mobile phones could be turned to silent mode. Secondly, in addition, recording devices and cameras must not be used during the meeting. So first, I'd like to introduce my fellow directors of Mesoblast. In the room, we have Dr. Silviu Itescu, Chief Executive; Ms. Jane Bell, Non-Executive Director. And then joining us via audio conferencing, we have Dr. Eric Rose, our Chief Medical Officer and Executive Director; Dr. Philip Krause, Non-Executive Director; and Mr. Philip Facchina, Non-Executive Director. In addition, we have 2 other Non-Executive Directors who are currently in Europe and unfortunately are unable to join us today, Mr. William Burns and Mr. Michael Spooner. So I'm also pleased to say that we have a number of key executives here today. I ask each executive to stand briefly while I introduce them; Ms. Geraldine Storton, Head of Regulatory Affairs and Quality Management; Mr. Paul Simmons, Chief Scientific Officer; Mr. Andrew Chaponnel, Interim Chief Financial Officer; and Mr. Peter Howard, General Counsel and Corporate Executive. Also with us is Ms. Niva Sivakumar and Mr. Paul Hughes, our Joint Company Secretaries. In addition, joining us via audio conferencing, we have Ms. Dagmar Rosa-Bjorkeson, Chief Operating Officer. Finally, present today is a representative from the company's auditors, PwC, Mr. Jon Roberts. So I'd like to now outline the order of business that will be undertaken today. First, I'll say a few words about the past year for Mesoblast, which have been remarkable. Dr. Itescu will then provide an update on the operational and strategic developments of the business. Shareholders will have the opportunity to hear Dr. Itescu's questions or ask Dr. Itescu questions about the business following his presentation. Following his presentation, I will then go through some procedural matters and proceed with the more formal aspects of the meeting as outlined in the Notice of Meeting. Although most of the meeting is formal in nature and restricted to the resolutions detailed in the Notice of Meeting, we hope that afterwards, those in attendance can join the directors and management present for informal discussions and light refreshments. So I'm pleased to be with you today, and I'd like to offer the following remarks regarding the activities for the year. Today, we announced long-term survival results for our lead product, remestemcel-L in children with severe steroid-refractory acute graft versus host disease, a devastating disease with high mortality. The results showed durable survival through 4 years of follow-up, reaffirming the potential significance of remestemcel-L as a new life-saving treatment for children with steroid-refractory acute graft versus host disease where to date there has been no approved therapies. These new long-term survival data are a key component of the company's BLA resubmission to the United States Food and Drug Administration. We believe these long-term survival results follow our filing with the FDA in October with substantial new information on clinical and potency assay items, which they requested in their Complete Response Letter from 2020. And again, will be formally submitted to the FDA. We would hope to see a successful regulatory outcome from remestemcel-L during the first half of the upcoming calendar year. As I told shareholders in the annual report, this approval would be the most transformative event in Mesoblast's history. Hence, why I believe these are exciting times for our company. In addition to preparing for the remestemcel-L BLA resubmission, we have been in regular contact with the FDA over the past year across our broad portfolio spectrum of products. Specifically, we have focused on pathways to market approval for rexlemestrocel-L in the treatment of chronic low back pain associated with degenerative disc disease and for heart failure with reduced ejection fraction. In today's quarterly financial report, we showed that the company is in a strong financial condition to meet our commitments to bring our products to market. Management has continued to maintain reduced operating expenses year-on-year, strengthened the balance sheet and successfully restructured our long-term debt. I'm pleased to say we welcomed 2 new Board members this past year as we continued our program of Board renewal and enhancing Board diversity. The appointment of Dr. Philip Krause and Ms. Jane Bell have greatly added to our company's expertise, especially as we move towards potency -- I'm sorry, potential regulatory approval and commercialization of our lead asset as well as our follow-on products in Phase III. Let me thank the whole Board for their efforts in 2022 to continue to chart a course which we know is in the best interest of all shareholders. I'd like to leave you with a simple message. Mesoblast will enter 2023 in a very strong position, to take advantage of years of hard work and significant investment to develop our world-leading technologies. I would like to thank the efforts of our Chief Executive, Dr. Silviu Itescu, and his talented team. We know each stage of our development requires countless hours of dedicated effort and commitment. We can all see the finish line in terms of a potential first U.S. regulatory approval for one of our products, and we would not have gotten to this point without the hard work of our management team. Lastly, shareholders on behalf of your Board of Directors, I would like to take this opportunity to express our deep gratitude for your ongoing support and confidence in our technology. I would like to now hand over the meeting to our Chief Executive, Dr. Itescu, who will now elaborate on Mesoblast corporate progress. Silviu?

Great. Thank you, Joe. Please go to the Slide #4, please. Survival outcomes have not improved over the past 2 decades for children or adults with the most severe forms of steroid-refractory graft versus host disease. The lack of any approved treatments for children under 12 means that there's an urgent need for a therapy that improves the dismal outcomes in children. In light of the unmet need, remestemcel-L has been granted Fast Track Designation and BLA Priority Review from the FDA. A major milestone in the company's complete response to the FDA was the submission at the end of the last quarter of substantial new information on clinical and potency items to the IND for remestemcel in the treatment of children with GVHD as guided by the FDA. We've optimized our potency assays that were in place at the time of the Phase III trial and which demonstrated relationship between the products activity in-vitro and its effect on survival in the Phase III trial. Additionally, we've generated data from the expanded access program of 241 children, which confirmed the ability of these in-vitro potency assays to measure product activity relevant to survival outcomes. Next slide, please. Today, Mesoblast provided new results from a 4-year observational survival study performed by the Center for International Blood and Marrow Transplant Research, CIBMTR, on 51 patients out of our Phase III trial who are enrolled and followed for up to 4 years. Overall survival in the remestemcel cohort was 63% of 1 year, 51% of 2 years and 49% at 4 years. Across 4 recently published studies of children or adults with steroid-refractory acute GVHD, 1 year survival of just 40% to 49% and 2-year survival of just 25% to 38% have been reported. When best available therapy is used or when the only FDA approved agent, ruxolitinib, has been used. The new long-term survival data provides assurance that the short-term day 28 responses and the early survival through 180 days in our Phase III trial in these children that have been previously presented to the FDA in the original BLA submission are unlikely to have arisen by chance. These long-term survival outcomes in fact, become a cornerstone of our BLA resubmission. Next slide, please. This is a snapshot of our late-stage clinical pipeline. You'll note that in red are those indications being developed using the first-generation technology platform, remestemcel. And in blue are those indications being developed by a second generation product platform, rexlemestrocel in different indications. So remestemcel, as I'm talking about today, as we are all familiar with, its lead indication is acute graft versus host disease. It's in the regulatory phase towards potential approval. Its follow-on indications include acute respiratory stress syndrome initially targeting COVID-19 and inflammatory bowel disease in patients who've got biologic refractory Crohn's disease or ulcerative colitis. Our second-generation platform technology, rexlemestrocel which is based on immuno-selected Stro-3 positive cells is being developed for 2 other inflammatory indications, chronic low back pain due to inflammatory degenerative disc disease and inflammatory heart failure resulting in reduced ejection fraction heart failure patients. So we'll talk about those a little bit later on. Next slide, please. And today, also, we announced our end of quarter financial results for the period concluded September 30. Cash on hand was USD 85.5 million and there is up to an additional USD 40 million that may be drawn down from existing financing facilities subject to achieving certain milestones. Currently, we have discussions ongoing to extend the period for this drawdown option over the next 12-month period. Net cash usage, pleasingly, on operating activities for the quarter was $14.3 million, which represented a 22% reduction on the comparative quarter the year before and a 47% reduction on the prior comparative quarter. Revenue from royalties on sales of TEMCELL remain solid. Products sold in Japan by our licensee JCR for the quarter, royalties from those sales were $1.4 million for the quarter and $1.8 million on a constant currency basis. So currency changes between the yen and the U.S. dollar have impacted obviously the revenue from this product. For the 12-month period ending September 30, total royalties were USD 7.7 million and on a constant currency basis, $9 million or a 9% increase overall on the comparative period. Next slide, please. And this slide shows the hard work that has gone into managing our cash burn over the past 12 months and beyond. And you can see a substantial reduction on a rolling 12-month basis, which has seen a 33% reduction or $30 million reduction in spends in the last 12 months, predominantly on clinical trial costs, but also on certain areas of manufacturing. And I think this is very important to show how strongly the management team is keeping focus on our cash reserves at these -- given the general market conditions. Next slide, please. So let me update you a little bit on the results that we announced today and how important I think they are for children with acute graft versus host disease. This continues to be a very large unmet need. About 50% of patients who have an allogeneic bone marrow transplant will develop graft versus host disease. And for children under the age of 12, there's nothing, there's nothing approved. And this is a disease that potentially has a mortality rate approaching 90%, 9-0. So total unmet need, we focused on it as our entry point into the larger graft versus host disease indication, which is potentially 3 to 4x larger in adults, and that will be the obvious progression beyond children. But first and foremost, where the total unmet need is in children with high mortality. Next slide, please. This slide summarizes the results with remestemcel across 4 different studies on early survival outcomes at day 100. Day 100 is the first time when you look at whether a new treatment impacts survival and summarized the other results across 4 studies, so-called Protocol 280, in comparison, this is a randomized controlled study where 27 of the patients were children, demonstrating survival benefit versus matched controls. The second study is the open-label study Phase III trial that we've talked about in the past, GVHD001, where we see a substantial survival at day 100 in comparison to a propensity matched control cohort called the Magic cohort. The third data set is the overall survival in our expanded access protocol of 241 children. And within that, you see a subset where the first 75 children will compare in outcome, just with Grade D disease against, again, a propensity match control cohort by the CIBMTR data set, and we see a significant short-term survival benefit. So these results have previously been shown to the FDA and they're very encouraging in terms of short-term survival of remestemcel. Next slide, please. What we announced today was that these short-term survival results are durable and they are durable for as long as up to 4 years of follow-up. And being alive 4 years out means really you're cured of this disease and you're likely to be alive and have a normal life span. So what we reported today, these are data that were generated, again, by the independent organization CIBMTR. We just received the results, and we've been completely blinded to the outcomes. At 1 year in our Phase III trial, 63% were alive; at 2 years, 51%; at 3 years, 49%; 4 years, 49%. You can assume, therefore, that there's stable 49% or so survival longer term. In the table, you see comparison between the survival outcomes that we've just reported in our study at 1 and 2 years in the column in blue with reported 1- and 2-year survivals, in 4 publications of appropriate cohorts in children and adults published in 2019 and 2020. BAT stands for best available therapy. So you see next to the remestemcel survival results of 63% and 51% at 1 and 2 years, you see best available therapy in children, in 128 children showing a 40% 1-year survival and just 35% 2-year survival. And that's in a cohort, which was far less severe than the cohort that we've studied with only 22% of patients -- of children having grade 3 or grade 4 disease. The rest of the study's quoted here in adults. And in particular, I would focus on the studies -- the most recent studies in 2020 that encompass both the open-label study, so-called REACH1, which resulted in ruxolitinib or Jakafi being approved 1 month before our CRL 2 years ago. where 1-year survival in adults was 43%. And the subsequent study, which was a randomized controlled trial, so-called REACH2, which compared ruxolitinib against best available therapy in a cohort of adults of -- that was 63% grade 3, 4, showing 1-year and 2-year survivals of 49% and 38%, neither of which were any different statistically from those with best available therapy. So I think what these data tell you and what we're very excited about is that we're seeing here, as predicted from the early survival data, long-term durable survival in children that is substantially greater at 1 and 2 years and beyond than any of the drugs that are available to physicians today, whether we're talking about children or adults with this devastating disease. And remember that 89% of our Phase III trial pediatric population was the most severe grade C, D disease. Next slide, please. And when you look at the data in that way, Kaplan-Meier curves, on the left-hand side, it's very evident, the difference. On the left-hand side is the 2020 paper from McMillan, the most recent large cohort of children treated with best available therapy, 370 children where you see at 6 months on the left, 49% survival and a 2 years 35% survival. And if you look at the Kaplan-Meier on the right, which is our cohort treated with remestemcel, in the same period of time, you see 69% survival at 6 months and 51% survival at 24 months. That means that for every 100 children, 20 children would be alive treated with remestemcel as compared to treatment with other available drugs that are not approved. Next slide, please. A further analysis of our data was performed by independent investigators at Mount Sinai Medical Center in New York, where they did a propensity matched analysis of patients in our Phase III trial with children in the so-called MAGIC cohort matched by biomarkers for disease severity. The MAP biomarker score is a validated marker of very severe disease above a threshold of 0.29 that results in resistance to all drugs that are out there as well as a very high mortality. And as you can see on the figure on the right, when you match by the high MAP score, you see again a very substantial, even greater survival benefit now in this propensity matched cohort of 64% at 6 months in the remestemcel treated patients versus just 10% with best available therapy. So not only do we see an overall survival benefit, we particularly see a survival benefit in the sickest and most likely to die children. Next slide. So let's move on to the rest of our pipeline. The second-generation product rexlemestrocel is being developed for a number of indications, the most advanced of which is our chronic inflammatory low back pain opportunity. This slide talks again about the disease burden. There are at least 7 million patients across each of the major jurisdictions in the U.S. and EU5 patients with severe chronic inflammatory back pain due to discogenic disease that just don't have appropriate treatments. And in fact, very quickly, these patients go on to opioids and 50% of opioid prescriptions in the U.S. today are for patients who have chronic low back pain due to inflammatory discogenic disease. And that we understand -- we all understand the epidemic of the opioid crisis. Next slide, please. This slide summarizes the patient journey. So once you're beyond response to conservative treatments such as nonsteroidal anti-inflammatory drugs, the only real option is opioid analgesics. Beyond opioids, you're now talking about interventional therapies, surgical approaches, et cetera. So there really is nothing for these patients with severe disabling pain. And we're talking about really severe pain that given that most of these patients are in their 40s and 50s has a major impact on quality of life and in their daily activities. So we believe that we've got something that should be available pretty early on in the disease trajectory. Next slide. And in fact, in our Phase III trial, what we saw was that the maximal therapeutic benefit was, in fact, within the first 5 years of patients presenting with this severe unremitting back pain. You see here on the slide in red, the reduction in pain which is maximal of 12 months and is durable through at least 3 years from a single injection into the disc. In contrast to that in the green, you see the effect of a sham injection. And that difference, which is maximal at 12 months is of about 20 points on a scale of 0 to 100, which is a huge reduction in pain for anybody that suffers from this disease. In fact, 50% of patients who received a single injection had no pain at all at 12 months. And as I said, the maximal benefit, the optimal benefit is early in the disease when there's substantial amount of inflammation and when a disc is still relatively healthy and can be protected. Next slide, please. There's a number of drugs that are out there that are used either as branded pain agents or as biologics in the pain space and the cost substantial -- the cost of these drugs is substantial and we understand what the reimbursement would look like if we are able to achieve in a confirmatory study the type of pain reduction I've just shown you as well as quality of life and functional improvements. Next slide, please. So where are we with this program? We had a very successful meeting with the FDA at the end of last year, where we presented these data, and we had alignment with the agency on what a confirmatory study would look like, where the primary endpoint of exactly what you just saw a mean pain reduction of 12 months as an approval indication for the product. We would be looking at a number of secondary endpoints such as quality of life, functional improvement and potentially a reduction in opioid use. And the trial has now been put in place in terms of overall protocol design, endpoints, et cetera, and it will go before the FDA to get clearance to commence in short order. The additional components to this is to have 20% of the overall patient population being in Europe, in line with our partnership with Grunenthal so that we can generate sufficient data to potentially have, within a relatively short time frame, approvals in both the U.S. and Europe using both data sets. Next slide, please. The final indication that I just want to touch on is our chronic heart failure program. It's a big program. It continues to target a very large unmet medical need. And we're very excited about the results that we've generated recently. There's at least 6.5 million people in the U.S. and 26 million globally with chronic heart failure with its prevalence increasing. I think it's very clear that despite a number of new drugs that have been approved, these drugs target the symptomatic shortness of breath that goes along with progressive heart failure. But none of these drugs really have made an impact on the more important outcome of cardiovascular mortality as well as some of the major adverse events like heart attacks and strokes. We believe that the underlying mechanism of action of our cells is so different from the existing drugs, but these are the areas that we will be impacting as we move forward. Next slide, please. Overall, we think that an intervention with [ our cells ] has the ability to be used in conjunction with any of the drugs that are out there and to be used in patients in Class II to Class IV disease with durable outcomes from a single intervention. And I'll show you the data that supports what I'm saying. Next slide, please. So in a trial over 537 treated patients, randomized controlled trial, we first of all, showed that, in fact, in 12 months, we see a substantial improvement in left ventricular ejection fraction. This is in a disease that is called heart failure with reduced ejection fraction. And so we saw a significant overall improvement in ejection fraction in 12 months, and that improvement was even more profound in patients who had evidence of inflammation in the bloodstream as detected by a very simple measurement, a $20 blood test called CRP, that can identify patients most likely to respond to our therapy. And in those patients, we saw an 86% greater improvement in ejection fraction 12 months from a single injection of our cells than we've seen in controlled sham therapy. Next slide, please. Now why is that important? So it's not just important to improve ejection fraction in 12 months in patients with low ejection fraction heart failure. But it turns out that by doing that, we're able to impact long-term outcomes over a mean of 3 years and beyond in the major MACE composite endpoints of cardiovascular death, heart attack or stroke. And in fact, we've -- additional data is showing the fact that those patients who have the greatest improvement at 12 months in these ejection fraction are the ones that benefit the most long term. And you can see on this slide on the left a significant reduction in 3-point MACE in all treated patients across the 537 patient study. But most importantly, on the right, a 45% reduction in cardiovascular death, heart attacks and strokes when you identify the patients with evidence of inflammation. That's where the real benefit is greatest. And that's on top of all the new existing approved drugs for heart failure, such as Novartis' new drug and drugs by AstraZeneca and the like. Next slide, please. So we're very excited about those data. And more to come about the relationship between heart failure more broadly, Class II, Class III and heart failure in LVAD patients where we've had those data in the past and how we see the bridge between those data within the Regenerative Medicine Advanced Therapy designation that we already have, those discussions will be ongoing with the FDA. I think I might leave it there, and hopefully, there are some questions that we can address before we move to the next items on the agenda.

[Technical Difficulty]

Yes. So remestemcel is a formulation that is -- has been developed for use intravenously. So it's injected as a simple intravenous infusion. We have frozen vials that contain 25 million cells per vial. They're cryopreserved. We have a supply chain. Those cells are shipped from the manufacturing site to our holding sites in the U.S. and in other jurisdictions, and then they're shipped to the end user in a way that allows them to be used as needed with a rapid thought time of about 5 to 10 minutes and then diluted in really a bag of saline and infused over about a 20-minute period.

When you compare the cells with the best available treatment, do you think there's a possibility of an addictive effect if you combine the 2 treatments? Are the mechanism so different that you could get an addictive action in the future?

Look, the problem with best available therapy and the reason why no drugs have been approved other than Jakafi recently is the adverse event profile of these drugs. So there are many immunosuppressive drugs that can wipe out GVHD as a disease, but it comes at a major cost. The cost is severe infections, which themselves are life-threatening, or potentially a bounce back of the cancer, the underlying cancer that was the requirement for the bone marrow transplant. So that's called tumor relapse. And so neither of those things are good things to have. That's why many drugs that are out there are not approved for this disease. Ruxolitinib Jakafi was approved on the basis of a single open-label study 2 years ago with the primary endpoint of early short-term day 28 response. The hope was that, that drug would provide a survival benefit to the adults that received it. That has not turned out to be the case as I've shown you. But in addition to that, that drug is too toxic to be used in children. So it has not received approval in children where again, you couldn't justify using that sort of a toxic drug that causes infections and bone marrow suppression. So the short answer to your question, there are no drugs out there that come anywhere near the sort of survival data that I've shown you. And I think if our product is approved, I see no reason that it needs to be used in conjunction with any other drug that's out there. In fact, the safety profile of [ our cells ] are unique and now the survival benefit is unique.

And with respect to degenerative disc. So when you inject some of the cells into the disc, do you actually see regeneration of the disc, it pops up again? Is that what you see if you have a look it under MRI or whatever?

Yes, so when we started the back pain program, we started to treat patients who are much more advanced than we're treating now. Patients who were at the sort of the end stage of their disease where the hope was that we would be regenerating and avoiding the need for surgery. What we've learned along the way in this program is, in fact, the optimal time to treat patients is well before they have any degeneration of the disc when they've got what looks like normal anatomy, what looks like normal MRI scores, but have got such severe inflammation that the pain is unbearable. And if you let that go for another couple of years, that pain is accompanied by degeneration and destruction and they move further along. What we've learned is that's the time to intervene, before you've got any destruction of the disc. And that's when the cells seem to be most effective. In other words, they're acting like immunomodulatory agents in the same way as they act in GVHD intravenously, they do that in the disc and they turn off the damaging inflammation. That does two things, right? It reduces the severe pain and it reduces it long term. So it's not a short-term fix. It seems to reduce pain. And as I said, 50% have no pain in 12 months, but it's a durable reduction for at least 3 years. And secondly, and this is something that we will be continuing to monitor over time. We anticipate that the anti-inflammatory effect also prevents the destruction and degeneration of the disc. So the optimal time is to be treating these patients as early as possible and certainly no later than 5 years post initiation of pain.

Has the FDA or have we had any indication of when the production facility in Singapore will be inspected?

I'll ask Geraldine Storton to talk to you a little bit about that. But I think let me just summarize. We've performed both an internal inspection and have had an external inspection by the Singapore regulatory authorities of the facility which is the Lonza facility in Singapore. And we're very pleased with what we've seen. I think the next period is going to be where the FDA decides how they want to inspect, et cetera. But Geraldine, would you like to address that, please?

So they won't confirm that date until we get the resubmission into the FDA, which we're working hard to get that done. And so we do anticipate that they'll contact us within days, in fact, to start to work out a timing for that facility inspection, which we expect to happen in the first quarter next year.

It will take them probably about 2 months to get their act together to lock in the dates and get their people to be able to go out there and inspect.

[Technical Difficulty]

Yes, of course. As I said earlier, we've completed our protocol development with external advisers, et cetera, statistical powering, et cetera. So look, the size of -- so we're looking at a U.S. trial plus a European component. So whether that's 2 separate programs or whether they're intertwined, but the U.S. component will be less patients actually, we think than even the first Phase III trial.

The chronic low back pain trial originally Grunenthal, if I understood it correctly, were funding the second Phase III trial, and there was an amendment to that agreement. How will this combined trial be funded and what's Grunenthal's contribution?

That's a very good question. So we are in discussions with a number of organizations that would provide potentially the funding for this program. And those are both financial organizations as well as corporate organizations that are in the space. And part of the discussions with Grunenthal will continue in terms of whether they might want to invest in a component. At the moment, the amended agreement has put the onus on us to work with our partners to complete the program. And the difference in financial consideration is now as a success-based feedback to Mesoblast subject to positive outcomes and the like. As we move the program forward in the U.S., which gets us much closer to an FDA approval, then we would expect the EMA approval sequenced by about 12 months. Those discussions, I think, will reinitiate and whether Grunenthal wants to contribute some of that upfront or whether they continue to have that as success-based payments is still something that's a subject of discussion.

A couple of questions on remestemcel. Is the increase in survival of about 13% to 20% from what has been disclosed from the BAT sufficiently significant for the FDA to actually approve the drug?

Well, I'll ask you a different way, right? At 1-year survival, we see a 63% in a population that's almost 90% Grade C/D and the best available therapy in 300-odd patients in a population with about 22% Grade C/D showed a 49% survival. So that means that relative to drugs that are out there today, which are none of which are approved, 24 children out of 100 would be alive who would otherwise be dead. That is extremely, extremely persuasive and important. There's no question that any clinician whether they're transplanter, whether they're pediatrician or whether they're inside the FDA would see that as extremely clinically relevant by any criteria.

Okay. Next question is, what is going to be the capital requirements over the next 24 months for the company to achieve the goals of getting registration of the drugs?

Well, we go one step at a time. And we're in the process of getting in front of the FDA with all of that data for our first drug, for our first indication, for our first approval, right? And look, let's be successful with this because I think success for remestemcel in GVHD provides a template, if you like. It will demonstrate that we understand what the FDA is looking for in terms of regulatory, in terms of manufacturing and of course, in terms of clinical. But I think the regulatory manufacturing component of an approval -- of first approval has many flow-on effects on the rest of our pipeline. So I think that's what we're focused on right now, where, of course, the value drivers beyond GVHD -- I mean GVHD in children and in adults is a very large market opportunity. In size, the only company with an approved drug in this space is a $17 billion company and it's largely built on the back of Jakafi, which is a $2 billion drug, so for a number of indications, right? But I'm saying that the GVHD as a market in children and adults will make Mesoblast without a shadow of doubt. Having said that, the lessons that we take from going to the FDA with a successful submission on that indication opens the door, of course, for the bigger indications -- the blockbuster indications of back pain and heart failure. Okay. I think if there are no other questions, I might hand it over to Joe for the remainder of the agenda. Thank you.

Great. Thank you, Silviu. We appreciate hearing your overview on the incredible progress our business has made over this past year and also the exciting milestones coming up for this 2023 fiscal year. With that in mind, I now would like to direct you to the meeting procedural matters. On your arrival, you were given an admission card. A person who is holding either a yellow or a blue admission card are entitled to speak at the meeting. If you have a question or comment, please raise your hand. And at the appropriate time, you will be invited to speak. If you are invited to speak, a Mesoblast staff member will pass one of the roving microphones to you. Before you ask your question or make your comment, please hold up your admission card and state your name and whether you are here as a shareholder or a proxy. Please address all questions to me as Chair, and I will then answer or redirect them as necessary. Only persons holding a yellow admission card can vote at this meeting. Persons holding a red admission card are visitors to the meeting and are not entitled to speak or vote. I'll put each of the resolutions separately to you and will provide an opportunity for questions on each one of them holding yellow or blue admission cards. We're now going to move to the formal business of the meeting. Let me state that I can confirm the Notice of Meeting was sent to all registered members, the company's directors and the company's auditors in accordance with the company's constitution and the Corporations Act. In addition, a copy of the Notice of Meeting has been lodged with the ASX. I will take the Notice of Meeting dated 24 October 2022 as being read. I direct that a poll be taken on all items of business today. The poll will be held at the end of each resolution. Before a vote is taken, I will inform the meeting of how many proxy votes have been received. As indicated in the Notice of Meeting, I will be voting all undirected proxies given to the Chair of the meeting in favor of all resolutions considered at this meeting. So for the administration of a poll, I appoint Jim Kompogiorgas of Link Market Services Limited as the company's share register who has examined the prepared summaries of the proxy forms received to act as returning officer and to conduct the poll. When you registered your attendance at the meeting, voting shareholders, attorneys, corporate representatives and proxy holders were given a yellow admittance card. On this card, you will find a series of boxes for voting. Please indicate on your card how you wish to vote by ticking or marking the appropriate square. You must mark either for or against or abstain boxes. You should vote all items set out on a yellow voting card. Please note that if you are a proxyholder, attorney or corporate representative, and your appointer has directed how you should vote on any item, you must follow that direction. Once you have finished marking your card after the completion of all items of business at this meeting, please place it in one of the ballot boxes at an exit. If there are any aspects regarding the voting on which you are uncertain, please do not hesitate to ask one of the returning officers' staff. The results of the polls will be made available later today and will be released to the market via the ASX website and will also be made available on our company website. I'll now move each of the resolutions separately and will provide an opportunity for questions on each resolution. So the company's annual report includes the financial statements and directors' declaration -- the directors' report and the auditor's report for the year-end 30 June 2022. I'll take these reports as read. While no resolution is required in relation to the financial statements and reports, shareholders or their corporate representatives, attorneys or their proxies are entitled today to ask questions of the directors or the auditor in relation to these reports. I ask that any questions concerning the remuneration report be raised at the next agenda item. Questions also be asked -- or may be asked of the auditor concerning the conduct of the audit, the preparation and content of the auditor's report, accounting policies adopted by the company and the independence of the auditor in carrying out the audit. I now invite the shareholders to ask any questions on this item of business. Paul, are there questions in the room?

Chair, there are no questions on this item.

Very good. So I'd like to move to item 2, which is the adoption of the remuneration report. The Board submits its 2022 Remuneration Report to shareholders for your consideration and approval. The Corporations Act requires companies to put to shareholders a nonbinding resolution to enable shareholders to voice their opinion on matters included in the remuneration report. I now invite shareholders to ask any questions on this item of business. Paul, are there questions in the room?

Chair, there are no questions on this item.

Very good. Proxy votes received for item 2 are displayed on the screen. I now propose item 2 as set out in the Notice of Meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this items on the yellow voting card, and then we will move to the next question. Please vote. [Voting]

Very good. I'd like to move to items 3 and 4 now, which relates to the election and reelection of directors. We will now move to the discussion of the election and reelection of the directors. Items 3a and 3b involve the election of 2 new directors, namely Dr. Philip Krause and Ms. Jane Bell. Items 4a and 4b involve the reelection of 2 directors, namely Dr. Eric Rose and Mr. William Burns, who are retiring in the accordance of the company's constitution. Both are eligible and wish to offer themselves for reelection. The Board recommends that shareholders vote in favor of the election and reelection of each of these candidates. Each candidate has not participated in the Board resolution relating to their own candidacy. I will now deal with each resolution separately. Item 3a deals with the election of Dr. Philip Krause. I now invite shareholders to ask any questions on this item. I will pause for a moment. Paul, are there any questions?

Chair, there are no questions on this item.

Very good. I now propose Item 3a as set out in the Notice of Meeting and put the resolution to a vote by poll. I now pause to allow you to complete your vote on this item on the yellow voting card, and then we will move on to the next resolution. So I will pause for a moment for you to vote. [Voting]

Very good. I'd like to now turn to item 3b, which deals with the election of Ms. Jane Bell. I now invite shareholders to ask any questions on this item. Paul, are there any questions in the room?

Chair, there are no questions on this item.

Very good. Proxy votes received for this item are displayed on the screen. I now propose item 3b as set out in the Notice of Meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then we will move on to the next resolution. So I pause now for you to vote. [Voting]

Moving to item 4a, which is the reelection of Dr. Eric Rose. I now invite shareholders to ask any questions regarding this item. Paul, are there any questions in the room regarding this item?

Chair, there are no questions on this item.

Very good. Proxy votes received for this item are displayed on the screen. I now propose 4a as set out in the Notice of the Meeting and put the resolution to a vote by poll. As before, I will pause to allow you to complete your vote on this item on the yellow voting card, and then we will move on to the next resolution. I pause for a moment for you to vote. [Voting]

Moving to item 4b, deals with the reelection of Mr. William Burns. I now invite shareholders to ask any questions on this item. I will pause for a moment for questions. Paul, are there any questions?

Chair, there are no questions on this item.

Very good. Moving to the vote. Proxy votes received for this item are displayed on the screen. I now propose 4b as set out in the Notice of Meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card and then we'll move on to the next resolution. I now pause for you to vote. [Voting]

I'd like to move to item 5a, which is a discussion concerning the proposed issue of options to Dr. Philip Krause in relation to his recent appointment as a Non-Executive Director of Mesoblast. I now invite shareholders to ask questions on this item. Paul, are there any questions?

Chair, there are no questions on this item.

Very good. Proxy votes received for this item are displayed on the screen. I now propose item 5a as set out in the Notice of the Meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item, again, on the yellow voting card, and then we'll move on to the next resolution. I now pause for you to vote. [Voting]

The next item of business, item 5b, concerns the proposed issue of options to Ms. Jane Bell in relation to her recent appointment as a Non-Executive Director of Mesoblast. I now invite shareholders to ask questions on this item. I now pause for questions. Paul, are there any questions in the room?

Chair, there are no questions on this item.

Okay. Proxy votes received for this item are displayed on the screen. I now propose item 5b as set out in the Notice of Meeting and put the resolution to a vote by poll. I will pause again to allow you to complete your vote on this item on the yellow voting card. And again, we will move on to the next resolution once the votes are cast. I now pause. [Voting]

We next move to the discussion on item 6a concerning the proposed issuance of options to the Chief Executive, Dr. Silviu Itescu, in relation to his remuneration for the 2023 fiscal year. I now invite shareholders to ask any questions on this item. I will pause for a moment. Paul, are there any questions in the room?

Chair, there are no questions on this item.

Therefore proxy votes received for this item are displayed on screen. I now propose 6a as set out in the Notice of Meeting and put the resolution to a vote by poll. I again will pause to allow you to vote by completion of the yellow voting card, and then we will move on to the next resolution. I now pause. [Voting]

We next move to a discussion of item 6b concerning the proposed issuance of options to Chief Medical Officer, Dr. Eric Rose, in relation to his remuneration for the 2023 fiscal year. I now invite shareholders to ask any questions about this item. Paul, are there any questions?

Chair, there are no questions on this item.

Very good. Therefore, proxy votes received for this item are displayed on the screen. I now propose 6b set out in the Notice of Meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on the yellow voting card. And then again, we will move to the next resolution. I'll pause for a moment. [Voting]

We now move to a discussion of item 7 concerning the ratification of the issue of shares in our successful placement to major shareholders earlier this year. I now invite shareholders to ask any questions on this item. Paul, are there any questions in the room?

Chair, there are no questions on this item.

Therefore, proxy votes received for this item are now displayed on the screen. We now propose item 7 as set out in the Notice of Meeting and put the resolution to a vote by poll. I'll pause for a moment to allow you to complete your vote on this item on the yellow voting card, and then we will move on to the next resolution. I'll pause for a moment. [Voting]

We next move to a discussion of item 8 concerning the approval of the company's employee share option plan. I now invite shareholders to ask any questions on this item. I now pause. Paul, are there any questions in the room?

Chair, there are no questions on this item.

Okay. Proxy votes received for this item are now displayed on the screen. I now propose item 8 as set out in the Notice of Meeting and put the resolution to a vote by poll. I'll pause to allow you to complete your vote on this item on the yellow voting card, and then we will move on to the next resolution. I now pause for you to vote. [Voting]

We next move to a discussion of item 9 concerning the adoption of certain amendments to the company's constitution. This is a special resolution and requires the approval of 75% of the votes cast by shareholders, proxies, attorneys or corporate representatives present and eligible to vote at this meeting. I now invite shareholders to ask any questions on this item. Paul, are there questions in the room regarding this item?

Chair, there are no questions on this item.

Okay. So proxy votes received for this item are displayed on the screen. I now propose item 9 as set out in the Notice of Meeting and put the resolution to a vote by poll. I will pause again to allow you to complete your vote on this item on the yellow. Voting card, and then we will move on to the next question. I now pause. [Voting]

Ladies and gentlemen, that concludes the formal business of this meeting. I would like to remind you that if you're intending to vote on the formal business of the meeting, you should complete your yellow voting card on all items of the business and place it in one of the ballot boxes at an exit. As I mentioned earlier, the results of the voting of this Annual General Meeting will be released to the ASX once the votes have been counted. I invite everyone attending the AGM in person to stay, enjoy light refreshments and take the opportunity to discuss with the directors and management present the operations and activities of the company. Thank you for your attendance and contribution today. We appreciate your ongoing support and loyalty and look forward to a rewarding year ahead. Thank you very much for your support.