Hello, and welcome to the Mesoblast Financial Results for the Full Year Ended June 30, 2025. An announcement and presentation have been lodged with the ASX and are also available on the home and investor pages at www.mesoblast.com. [Operator Instructions] As a reminder, this conference call is being recorded. Before we begin, let me remind you that during today's conference call, the company will be making forward-looking statements that represent the company's intentions, expectations or beliefs concerning future events. These forward-looking statements are qualified by important factors set forth in today's announcement and the company's filings with the SEC, which could cause actual results to differ materially from those in such forward-looking statements. In addition, any forward-looking statements represent the company's views only as of the date of this webcast and should not be relied upon as representing the company's views of any subsequent date. The company specifically disclaims any obligations to update such statements. With that, I would like to turn the call over to Dr. Silviu Itescu, Chief Executive of Mesoblast.

Good afternoon, good morning -- to the Mesoblast financial results and operational update for the full year ended June 30, 2025. My name is Silviu Itescu. I'm Chief Executive of Mesoblast. On the line with me are Andrew Chaponnel, our Interim Chief Financial Officer; and Marcelo Santoro, our Chief Commercial Officer. We can go to Slide 4, please. This slide is a snapshot of our company profile. Mesoblast has an FDA-approved product, Ryoncil, which is the first and only FDA-approved mesenchymal stromal cell in the United States. We have over 1,100 patents and patent applications globally for our platform technology. We have 2 additional assets in Phase III trials. We have FDA commercial scale manufacturing capabilities. And we've built out a U.S. commercial organization. Next slide, please. Our platform technology is based on a shared mechanism of action across all of our products. Our mesenchymal lineage stromal cells respond to and are activated by multiple inflammatory cytokines through surface receptors on these cells, which result in orchestration of an anti-inflammatory cascade as a result of multiple factors that mesenchymal stromal cells secrete. That's the basis for our products, which address major diseases of inflammation. Next slide, please. On this slide is a snapshot of our mesenchymal stromal cell product portfolio. We have 2 platform technologies. One is called remestemcel-L, our first-generation technology; and our second-generation technology, which is called rexlemestrocel- L. Ryoncil, a branded product approved for pediatric steroid-refractory acute graft-versus-host disease and launched in the past quarter is our lead product on the remestemcel-L platform technology. It is also being developed for adult steroid-refractory acute graft-versus- host disease and inflammatory bowel disease. The rexlemestrocel-L platform technology, which uses monoclonal antibodies to isolate pure and more homogeneous cell population is in Phase III in 2 large areas, inflammatory chronic heart…

Thanks, Silviu. Next slide. Turning to Slide 11. We have the financial results for the year ended June 30, 2025. All numbers are reported in U.S. dollars. Total revenues from cell therapy products are up 191% on the prior year. Cost of revenues related to product sales were $1.2 million, which is 10% of net product sales and a gross margin of 90%. Additionally, cost of revenues also included $3.9 million of expenses related to non-cash amortization of the intangible value of our prior MSC asset acquisition. Selling, general and admin expenses were $39.3 million for FY 2025, an increase of $14.3 million on FY 2024. This increase related to our commercial team build and product launch. For revaluation of contingent consideration, we recognized a loss of $14.9 million in FY 2025, a non-cash revaluation of potential future third-party payments. The revaluation of warrant liability as a result of FDA approval of Ryoncil and the consequential share price appreciation resulted in us recognizing a warrant remeasurement loss of $5 million in FY 2025 compared to a gain of $0.8 million for FY 2024. Back to you, Silviu.

Thank you. Next slide. Let me take you through where we are with Ryoncil for children with acute graft-versus-host disease. This is the first and only mesenchymal stromal cell therapy approved by the FDA. Next slide. More than 30,000 allogeneic bone marrow transplants are performed globally, of which 10,000 to 12,000 are performed in the U.S. About 20% of these transplants are pediatric. And about 40% to 50% of transplants, whether in children or adults, result in a devastating disease called acute graft-versus-host disease, which when it occurs involves the skin, gut and the liver and in the more severe forms involving severe liver and gut disease can be [ 70% to 90% ] -- associated with 70% to 90% mortality. About 50% overall of acute graft-versus-host disease patients do not respond to steroids. And for these, in the pediatric age group, Ryoncil is the only FDA-approved product for these children. Next slide, please. The results from our pivotal Phase III trial that underpinned the successful approval of the product Ryoncil is highlighted in this slide. In a 54-patient single-arm multi-center Phase III trial across the U.S., overall day 28 response rate, the primary endpoint of the trial, was 70%. This study enrolled almost 90% of patients with the most severe forms of disease, Grade C and Grade D, which typically does not respond to other agents and is associated with high mortality. Next slide, please. In fact, the long-term survival in a follow-up study from the International Blood and Bone Marrow Transplant Research Registry showed that despite the severity of the grade in most patients at baseline, as many as almost 50% of patients were alive at 4 and 5 years out and only 14% had died due to acute graft-versus-host disease. In other words, the early response that…

[Operator Instructions] Your first question today comes from Ted Tenthoff with Piper.

Congrats on all the progress. Really excited to see Ryoncil sales coming off. I wanted to get a sense from you guys, you laid out how the opportunity in adults is larger. How long do you think it might take for label expansion and to run that Phase III trial?

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

Yes. Sorry for the background noise.

So the objective is to commence an adult acute GvHD trial this quarter. We are working with the Bone Marrow Transplant CTN group, which is an NIH-funded organization. They will conduct the trial under their auspices will provide product. We will contribute to funding. And the objective is to add our product on top of existing second-line agents, ruxolitinib being the only approved therapy in patients with severe disease, those patients with Grade C/D disease where ruxolitinib does not adequately address the requirement of these patients where we think that our product will substantially add to the early responses and overall survival. We expect to initiate the study this year, and we'll come back with specific dates and duration.

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

Sure. So this is a huge opportunity for us and a tremendous unmet need, both from the point of view of disability, chronicity and the ability to generate a product that reduces or completely abolishes any pain in these patients for at least 2 to 3 years from a single injection. As important is the fact that as many as 40% of patients in this category are forced to take opioids as the only alternative. And if we can result in opioid avoidance, it's incredibly important at this moment in time. In fact, in our first Phase III trial, we saw 3x as many patients able to come off opioids in the treated patients as in the controls despite being told not to change their medication during that trial. So we're very optimistic that we will see the same sort of outcomes in this study. We've been ramping up the study over the past few months in terms of increasing the number of sites. We're now at almost 40 sites enrolling across the U.S. And as we increase sites, enrollment picks up. We've made various adjustments to the protocol design so that we're able to tweak the enrollment criteria. And to date, we're enrolling well. There are no safety signals. Obviously, the trial is double-blind. So we're not -- we don't know really how it's coming along. But we're confident that we will complete enrollment towards either by the end of the year or sometime in the first quarter of next year. We're very keen to accelerate the study as fast as we can. And following the last patient in, there will be a 12-month period of follow-up in order to read out the trial's primary endpoint of pain at 12 months.

The next question comes from Olivia Brayer with Cantor.

Congratulations on a really strong start to the launch. Are you guys able to disclose how many monthly treatment kits have been administered to date? And what can you tell us about inventory dynamics here? Was any of this net revenue actually related to inventory? And as you think about going forward with the launch, what level of inventory will you typically have to maintain going forward? And then I've got a couple of follow-up questions, if you don't mind.

Sure. So the way we treat the kids is on a weight band basis. And so we have infusion kits that are all priced at the same price, but they have progressively greater product per kit. And so we -- our inventory is constantly stocked to meet the needs of children at every weight band as we treat kids that might be a 20-kilogram child and that gets replenished. If it's a 50 kilogram, a larger child, then that kit gets replenished. So we continue with each child that gets treated, they would be treated typically for 8 to 12 kits for infusions. And as each infusion goes out, we replenish. Typically, we send 2 kits per week per child. So that's how we keep stocking our inventory, if that makes sense. Does that make sense, Olivia?

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

Well, I mean you can -- it's very easy. We're very transparent, right? So each kit costs -- so we know what each kit costs. You know what it costs. And we've told you what our gross to net discount -- gross to net adjustments are. So you can divide the total gross to net by the price per kit and you can figure out how many kits we've sold.

Okay, perfect. Helpful. And then you mentioned the gross to net dynamics, how do you expect those to evolve as the launch progresses or should they be pretty stagnant? And then one final question, just maybe a follow-up on the adult GvHD trial design. Will there be a subset of Jakafi-naive patients or will the entire study really be Jakafi-refractory patient population for the adult?

Yes. So with respect to gross to net, we expect that to be pretty stagnant, pretty flat. That's the sort of number that we've given you today is what we expect it to stay at. With respect to the adult trial, we've decided not to go to Jakafi-refractory patients, but rather on top of Jakafi. And the reason for that is that it provides us with the largest possible market entry. So in second line, in other words, straight after steroids where Jakafi is currently approved in patients with Grade C/D disease or Grade 3/4 disease, which is about 50% of the Jakafi-treated patients, day 28 response is only about 50%. In other words, 50% of patients do not respond to Jakafi. That's the market opportunity. And we believe that adding our cells on top of Jakafi in all patients with severe disease will have a major impact and a major increase in the proportion of patients who achieve response at day 28. And as you know, if you're a responder at day 28, you're likely to be a long-term survivor with our cells. So this is an opportunity to really make a major impact on severe patients as early as possible and make ourselves available to the largest possible patients who need it.

Your next question comes from Elyse Shapiro with Canaccord.

Just on the adult study, are you planning on disclosing a bit more detail from your FDA minutes now that you've probably gotten them? And do you have any -- are there any kind of surprises around trial design or will it be similar to what we've seen with the Jakafi trials?

I think we updated through our release today and our slides, a summary of our discussions with the FDA. The FDA and Mesoblast are aligned. We are in agreement that we want to see the product used as early as possible in the most severe adult population. That is the patient population who is on Jakafi with Grade C/D disease where Jakafi only helps around 50% of patients and the other 50% don't respond. Rather than waiting for these patients to fail Jakafi, where the survival is an abysmal 20%, the best way to provide ourselves is in combination with Jakafi in these patients as soon as they're diagnosed so that we would like to increase the responder rate from, say, 50% to 80% or more. That will be the objective, right? And that allows our product to be used as early as possible in the most severe patients, which is a market size that's about 3x the current pediatric addressable population. And that's where we'll be going into in the pivotal trial.

Got it. Understood. And then just good to see a bit more of a focus on IBD. I guess, what are the timelines to more detail on what a trial would look like? And do you need to do any additional kind of dose-finding work before commencing a pivotal registrational study?

So we've got a KOL group that's been assembled. These are experts in trial design and they've managed and run trials of the latest innovative therapies for ulcerative colitis and Crohn's disease, both in the U.S. and in Europe. These key opinion leaders are putting together right now the best possible trial design. We may very well use both local delivery of Ryoncil as well as intravenous delivery in order to aim to achieve rapid remission as early as week 6 to week 8 in patients who are otherwise refractory to other biologics. Remission remains the challenge. Remission remains a target that is not well addressed by any of the biologics. And in fact, the best available therapy in ulcerative colitis achieves a remission rate of only about 20%. So there's a very large unmet medical need. Our trial design is being worked on and we'll update the market this quarter.

Great. And just one more, if I may. Kind of stepping back, looking at the number of kits that have been sold, are they -- I mean, to your knowledge, are they all being used in pediatric GvHD or could that be inclusive of some additional indications, too?

Yes. We have no way of knowing specifically how much of the product is used for acute GvHD versus for other indications because really physicians and their licenses enable them to make their own judgments as to which patients are best and most suitable for Ryoncil treatment. Of course, we work closely with institutions. Our commercial group works very closely with the institutions as they enroll patients. So we're certainly aware of patients with acute GvHD that are being treated throughout the country. And there have been certain situations where children with acute GvHD who have fallen between the cracks and have not been domiciled, have not had insurance. And for those children, we provide product, obviously, free of charge. We also have a compassionate care use program for adults. And again, make our product available on an as-need basis from -- on a case-by-case basis. So in general, our product is being used predominantly on label for pediatric acute GvHD, where it's reimbursed federally and at every state level by Medicaid and it's reimbursed by the vast majority of commercial carriers. But more transparency than that, we don't really have on how it's being used by individual physicians.

Your next question comes from Michael Okunewitch with Maxim Group.

Congrats on a great start to the launch. I guess to start off, I'd just like to see if you can give us a sense of how the initial sales were distributed over the period? Were they weighted more towards the back end? I'm trying to get a sense of what sort of revenue trajectory we can expect going into the second half of calendar year '25.

Yes. Look, I think it's a little bit early to make projections right now. We've only had really 1 quarter of sales that we're reporting. So it's early. The commercial team has done a fantastic job in terms of getting insurance coverage, getting sites onboarded, getting us on formulary. I certainly expect that over the coming quarters, we're going to see continued strengthening of sales. But to provide guidance is a little bit early. Marcelo, would you like to add?

Yes. No, Silviu, I think it's a good question, and thank you. I think you mentioned that, right? So we're very pleased with the feedback that we've received so far from multiple treatment centers and the healthcare providers we serve right around. So it's certainly already making a meaningful impact in the treatment of these children. The performance to date, especially for the first quarter alone from launch has been outstanding, I would consider not only compared to our own expectations, but also when you benchmark that against other successful rare disease launches. And of course, I mean, I think we're all focused on building the infrastructure. You mentioned that in terms of payers, in terms of onboarding that is needed to ensure that we continue to reach our full potential. So yes, I mean, while we do expect growth, we also recognize that this baseline work is super important for our future performance.

All right. And then just one more for me and I'll hop back into the queue. I wanted to get a sense, in particular, in the context of the changes that we've seen at the FDA over the past 6 to 12 months. What sort of feedback have you gotten on the potential for a filing in heart failure based on your existing body of data? Have you gotten any additional follow-up since you last disclosed to the market?

Yes. We had a terrific meeting, and clearly, there was agreement on all of our manufacturing, our potency assays, which are really important given all of the learnings that we had with Ryoncil. I think getting alignment on that is really important ahead of a filing. And the other important issue is that we have total alignment on what a confirmatory study of somewhere between 250 to 350 patients would look like with an endpoint that aims to -- in patients with the greatest risk for MACE events, aims to reduce MACE events and mortality. So we're very pleased with the interactions with the FDA and we're working diligently to get our documents in.

Your next question comes from John Hester with Bell Potter.

Just a quick question there on market access and this might be one for Marcelo. What work is left to do with market access in terms of Medicare in the various states across the U.S.? And are you sort of halfway there or can you give us some sort of sense of your remaining market access activities?

Marcelo, would you like to address that? I think the short answer is…

Yes, very happy to do that. And the short answer, yes. We're already there for sure. I think on the payer side, we've made excellent progress, thanks to the tireless efforts of our team. We've engaged with more than 97 payers around clinical and value discussions. Ryoncil is now covered by insurance plans, representing over 250 million lives across both the commercial and government payers. And I think importantly, Medicaid is covered and is in place everywhere in all states as of July 1. And in addition to that, which I think addresses your -- part of your question, is that the commercial payer support has also been strong. All of the major players and that includes Aetna, Cigna, United, Anthem, Humana, Pride, which is the Blue Cross Blue Shields. They have issued favorable coverage policies for Ryoncil. And I think notably, this policy do not require step therapy, which simplifies patient access significantly. All of this has occurred within the first 6 months post launch. And then to further support the reimbursement, a specific J-Code for Ryoncil is already in place and goes into effect on October 1, allowing for more efficient billing from our clients or from our customers and payers along with CMS published rates. So that will be very important as we move forward and October is around the corner and that will be important not only for us but also for our clients.

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

Well, thank you, everybody, for being on this call. We are extremely, extremely excited and pleased by the way things have gone this whole year, actually, the fact that this has been a banner year for the company. We've received approval. We are the only company that has an FDA-approved mesenchymal stromal cell therapy in the U.S. and we're extremely pleased by the first quarter results. We will continue to work hard. We've got a growing commercial team in the United States. And we hope to continue to provide sales and updates to the market that continues to give the confidence as we transform this company from an R&D company to a fleet-footed commercial biotech organization. Thank you very much, everybody.

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