Hello, and welcome to Mesoblast's Financial Update and Operational Highlights Webcast for the Third Quarter Ended March 31, 2019. An announcement and slide presentation have been lodged with the ASX. These materials will also be available on the investor page at www.mesoblast.com. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. 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 announcements in the Company's filings with the SEC, which cause actual results to differ materially from those such as forward-looking statements. In addition, any forward-looking statements represent the Company's views only as of the data 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.

Thank you and welcome everybody to this call. On the call with me is our Chief Financial Officer, Josh Muntner. We can go straight to a Slide 5 please. Now recent corporate highlights, we're very excited to be able to say that we've initiated our BLA filing, which is a rolling submission for our product remestemcel-L in the treatment of steroid-refractory acute Graft Versus Host Disease. This follows the agreement with the FDA for a rolling Biologics Licence Application and their agreement to review the submission on a rolling basis. This process will provide the opportunity for ongoing communication with the FDA and during the process we expect to be able to adequately address any substantial matters that may be raised. In addition to the importance, this is really a historical importance of having filed our first BLA. We accomplished some significant advancements with our product candidate Revascor in for Advanced and End-Stage Heart Failure. We entered into a memorandum of understanding with our collaborators from the National Institutes of Health, at the Icahn Center Mount Sinai to conduct the confirmatory clinical trial using a product candidate Revascor for reduction of major gastrointestinal bleeding and end-stage heart failure patients who've received the left ventricular assist device. The same product candidate is currently in the Phase 3 trial for advanced heart failure. It's completed patient enrollment 566 patients in total have been randomized to receive either Revascor or placebo. That study conducted across 55 centers in North America continues to accrue primary end points and will complete when the full amount of primary endpoints have been collected. Regarding, back pain program in MPC-06-ID. That Phase 3 trial also completed enrollment more than 12 months ago 404 patients randomized to receive, a single injection intradiscally or placebo. All assessable patients have now…

Thanks Silviu. And thanks everyone for joining the call today. This is an exciting time for Mesoblast as we've now achieved an important milestone with the initiation of our rolling BLA submission for remestemcel-L for the treatment of steroid-refractory acute Graft Versus Host Disease. We're looking forward to providing updates to the market as we make progress with the FDA. So, the information that’s found on Slide 11, we'll start with, for the nine month period ended March 31, 2019, we're able to report a 29% reduction in net operating cash outflow. The significant decrease was largely driven by an increase in milestone payments in the current period relative to the prior period. We completed the quarter ending March 31, with just over $70 million of cash. I want to remind everyone that upon meeting certain milestones, we may be able to access additional cash through our non-dilutive capital arrangements with Hercules and NovaQuest. Taking a look Slide 12, we’ll now review our revenue. Total revenues were $14.8 million for the nine months ended March 31, 2019 compared to $15.6 million for the prior period. Off note is that our commercialization revenue, which is primarily composed of royalties from JCR, continues to show strong growth, increasing 28% in the recent nine-month period compared to the prior period. As we discussed when we reviewed last quarter's results, the current period contains a milestone payment of $10 million related to our partnering transaction with Tasly. The prior period includes $11.8 million of milestone revenue from our licensing transaction with TiGenix, now part of Takeda. Moving on to Slide 13, I'll walk through the remainder of the P&L line items. You'll notice for the nine-month period of fiscal 2019 we incurred a higher after tax loss relative to the year prior period. As…

Thanks Josh. If could move to Slide 15 please. Acute graft as a host disease is a significant market opportunity for Mesoblast and for our product candidate, remestemcel-L. The burden of illness for this disease is very significant with mortality rates as high as 90% in that 50% of patients who have great CD disease. There's only one approved treatment, for steroid-refractory disease in Japan. And there are no approved treatments, particularly for children outside of Japan. In Japan, our licensee JCR, has received the only product for approval in both children and adults. And their ability to sell and market this product and the adoption by the physician community in Japan, gives us very good insight as to how this product would be accepted in the United States. Globally, there are more than 30,000 allogeneic bone marrow transplants. And steroid-refractory GVHD in children and adults represents a very significant market opportunity driven primarily from the U.S. market. Slide 16 provides the significant burden of illness assessment of children with this very bad disease. And I think I would simply point out that this is, I think, a very conservative roadmap of the costs incurred by a large medical center in the U.S. for a child with severe graft versus host disease, particularly given the extensive in hospital, intensive care requirements. So based on our own qualitative U.S. market research on Slide 17, we believe we've got very significant value drivers for this product, which includes an excellent day 28 overall response rate, particularly in those hardest to treat great CD disease patients. We have excellent day 100 and day 180 survival rates. Very importantly, we have no evidence of any kind of major adverse events, including infections or other complications, typically seen with a whole range of immunosuppressive drugs.…

Thank you. [Operator Instructions] Your first question today comes from Mark Breidenbach with Oppenheimer. Please go ahead.

Hey Silviu, good morning, and thanks for taking the questions and congrats on getting the rolling BLA submission started. Two quick – a couple of questions on the graft versus host disease program. Given that Ruxolitinib was recently approved here in steroid-refractory GVHD at least in the adolescents and adults. And there’s obviously going to be a, to some degree, an overlapping label in the future is remestemcel is approved. Can you just comment on what you think will primarily be driving a physician’s choice if they have multiple new options to choose from in steroid refractory graft versus host. Thanks.

Thank you very much. I think it’s a very important question. So I think I’d like to point out again that 89% of our Phase 3 trial was in Grade C/D disease. And we achieved 69% Day 28 overall response. Grade C/D disease continues to be the area where there’s a high mortality and where there is a need for effective treatment in the public presentations for Ruxolitinib, the responder rates for Grade C/D disease, we believe we’re up the order of 41% to 43%. So substantially lower than what we’ve achieved in our Phase 3 results. About 50% of patients, children and adults have Grade C/D disease. And I think that is the important area that needs of us, we’ll be focusing, particularly in adults where we believe that we will be first line after steroids in patients with such severe disease, given not just the efficacy, but the very, very good safety record of the drug. In terms of children in particular, safety is paramount. And the great experience that we’ve had with children and the safety dossier together with the efficacy that I just showed you, I think means that children in particular will receive these cells as first line after steroids. But look, we have on the line, while they stood in this field, professor Joanne Kurtzberg had really like – Joanne would you provide us with your view of, from a clinician’s perspective?

Sure. Hi guys, I’m happy to be here. Yes, as a clinician who treats the children regularly, we would definitely go to MSC as the first line therapy after treat such a steroid-refractory in this. And also we – first of all, there’s no, I think toxicity with other agents were using with the Jakafi product and there is myelosuppression, leucopenia, thrombocytopenia, and these are children’s who just had a transplant or recovering their blood counts and they have unstable blood cancer to give them a drug that suppresses their blood counts at that critical stage is risky. In addition, children, particularly the children who are having diarrhea, they don’t want to take all medication and they don’t work of oral medication. And when you’re in that critical stage of the Grade C/D disease, you really want to give them the therapy. I really let you know got into their body and has a chance to have an effect. And totally – generally, in my hospital, I’m giving the IV medication is preferred. Going down in a year at a clinical point there, he’s got to get control with sort of tell me that. So the MSC still provide better vehicle of administration and more guarantee that the therapy will get delivered appropriately, a good – an excellent safety profile, no overlapping toxicities because they don't suppress blood counts, they don't suppress the immune system, they don't cause [indiscernible] toxicity, which is another clinical problem in these kids because of the other drugs they receive before the transplant. So, I think there's no question that, the doctors who are familiar with them, have seen them more, we'll go to the MSCs first. And maybe go to [indiscernible] response, that's going to be a much less likely situation to occur.

Okay. Okay. That's actually very helpful. And as far as I understand it, Ruxolitinib is administered on top of a backbone of steroid therapy. The activity you're seeing with remestemcel-L as a single agent therapy or is that also on top of steroids in the steroid-refractory pediatrics.

I think – go ahead, Joan.

No, I had trouble hearing the whole question. Can you repeat it?

The question was whether MSC is like a given in conjunction with steroids or after steroids are left with that steroids being on board.

The usual scenario is, how it is developed is [indiscernible]truly give a few days of steroids, they either respond or they're getting worse or not responding and it’s at that point, as the energy taper with steroids, because those steroids have a whole set of its first reaction that make them not an ideal choice to continue. So these steroids are being used as the MSCs are given.

Okay. Understood. And maybe one last one for Silviu and it might be too early to comment on pricing and reimbursement issues, but what would you expect remestemcel-L reimbursement to be fumbled with transplant costs in the U.S., or would you expect this to be reimbursed up early? Thank you.

Yes, I mean – clearly that it's a little bit early for us to address that with full information in hand, but given that we can get patients out of the hospital relatively fast. And certainly well ahead of completing the full week induction therapy that we would expect that it could be a combination of both bundling as well as out of hospital add on costs that would support the overall process.

Okay. Well, thank you very much for taking the questions and congrats on the progress.

Thank you.

Thank you. The next question comes from Jason McCarthy with Maxim Group. Please go ahead.

Hey guys, thanks for taking the question and congratulations on the progress. So for remestemcel-L like to see if you could give us a bit more color on how long we could expect the rolling BLA submission to take and then if you could remind us of the path towards expanding the label into the adult population.

Yes. So we expect to complete the filing process second half of this year. And then we have a fast track designation which enables us and we will seek a priority review, which then if accepted by the FDA means that there's a maximum of six month review process. The advantage of a rolling review is that as these modules go in there's an interaction with the agency that allows for an ongoing dialogue and question and answers that hopefully will further shorten the review process. What was the second question, Jason?

If you could give us an overview of the path to expand the label to include adults.

Sure. Well we're now pleased that there is a – at least one product that's available as an approved product and an immunosuppressive product in adults. I've said to you that the – our outcomes in great CD disease where there's a real need for survival benefit, we believe is excellent. And a relatively small trial, comparing against any approved standard of care would be focusing on great CD disease day 28 overall survival, showing we hope a superior outcome both on response day 28 response and overall survival at day 100, day 180. And we will be focusing on starting that program as soon as practicable.

Okay. Thank you. And then on Revascor and end-stage heart failure, you guys reduce GI bleed related hospitalizations by 65%. So my question is how does that transfer to total reduction in hospitalizations due to heart failure related events? As in like, how large is the burden placed on patients by GI bleeding in stage-4 heart failure.

Yes. look, it's not stage-4 heart failure, right. It’s stage-4 heart failure, it’s end-stage heart failure with an LVAD in place. So these patients have a very unique trajectory. They don't have heart failure, they're being kept alive by pump that maintains pressures and takes all of the load off their existing heart that causes for hospitalization and not are all to do with cardiac. The hospitalization causes are due to primarily two major things, infections and GI bleeding. GI bleeding occurs in about, as I said up to 40% of patients are perhaps a little bit less than that with some improved new devices. But it is a major component of the hospitalization. We did not impact infection rates at all. That's not that – that is outside of the mechanism of action of the cells, but we did impact hospitalizations by about 65% from GI bleeding. And so the cost implications of hospitalization from bleeding has significant, but beyond that, there are also a barrier to the agreement of families and the patients to take on these devices. I mean, it’s a significant challenge when you’re in and out of hospital with major bleeding in intensive care requiring transfusions, to ask people to be agreeable to taking on that kind of lifestyle problem is a major barrier to the growth of this industry. And I think, if we can impact that through reduction of bleeding, reduction in hospitalizations, we will have a significant market opportunity.

All right. Thank you. And then just one more quick one on degenerative disc disease. I would like to know what sort of improvement in the VAS pain score we would need to see in order for it to be comfortable in terms of efficacy to other methods such as opioids or surgery.

Yes, look the bar that we have put is a 50% improvement in VAS score, right? These patients come in at VAS score zero to a 100 where that means VAS scores were around 70. So that’s a pretty severe pain score. Just to put into context opioids, improve pain scores from meta-analysis of opioid studies by no more than about 10 to 15 points. We are looking at a 50% improvement, which from a mean of 70, means that 35 point improvement. So if we’re successful in this study and we reproduce the data from our Phase 2 results, the data should be significantly superior to anything that’s been reported with opioids. But beyond that, we’re talking about a very safe technology. We have not seen any cellular adverse events to-date. There’s no risks of long-term abuse, et cetera, et cetera. So and the bar around that 50% reduction in pain is as high as any device for total disc replacement or surgery. And we’re talking about the very large patient population where maybe at most 5% over a three year period would even be candidates for surgery. So there’s a very, very large patient population segment that is dependent on opioids today that are not candidates for surgery. And given the high risks of opioids, in the very near future, we’ll have no alternatives other than the type of approach that we are providing or other innovative technologies.

Well, thank you very much and again, congrats in the progress on the BLA.

Thank you.

Thank you. Your next question comes from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.

Well, hi Silviu and Josh. How are you?

Hi.

So I guess I have about three questions, one for Silviu. I guess I’ll start where you left off as far as the Phase 3 involved back pain you talked about with percent of patients that have thus far been completed. What do you expect for the next two or three quarters as far as data in the public domain? Do you expect any readouts or do expect any presentations?

Look, I think we want this trial to complete without any interim data readouts in order to maintain the integrity of the study as per our discussions with the FDA. We will be putting more of the Phase 2 data in the public domain both in manuscript form and in presentations. And I think we look forward to further disclosures in due course.

Okay. Got it. And then as far as some of the timing on the vascular for advanced heart failure, you indicated about 85% of the [indiscernible] already could we expect to see something out there in the public domain in the next couple of quarters as far as completion on the events or perhaps in some preliminary data of the conference later in the year.

So again what we’re seeing is that as patients are now three, four years out from initial enrollment. We’re seeing an increase in event rate as patients are progressing over time to end stage disease. And so we’re accelerating our event accrue, which is good. It means that we’ve got a high risk population that is having events and it will mean that we will be able to come close out this study in due course and perhaps sooner than we had anticipated, but we’ll just have to see how the next few months go.

Okay. And then lastly, a quick one for Josh, on the R&D for the quarter, it seems a little [indiscernible] million based in comparison to our estimates. Is that just a lumpiness in function or general trend or the timing of some of the patients on few of the trials?

I solely due to speed of some of different expenditures that we’re making. So I would not necessarily be a trend into it.

I would add Josh that I think a lot of our spend was heavy previously in the ramp up of the Phase 3 trials in heart failure and back pain and those trials now winding down. So I think that reduction in R&D reflects that. I think what you’re going to see over time and have seen is a shift in spend from clinical R&D to manufacturing and the manufacturing is in building up inventory for aGVHD launch.

Okay. Perfect. That sounds great. Thanks for taking the questions.

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

Again, I’d like to thank everybody for today. We are very excited as I said at the asset, this is historic for Mesoblast. Our first BLA filing has been initiated and we will update the market in due course as we progress with our submission and the plans for rollout. Thank you everybody.

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