Mesoblast Limited (MESO) Q4 2026 Earnings Report, Transcript and Summary

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 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 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 the Orthopedic Musculoskeletal Program, Roger Brown. If we go to Slide #2, please. Mesoblast is a -- the leader in allogeneic cellular 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 stand-alone 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, adult 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 ourselves, 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 for new indications. We've completed multiple large U.S.-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 are 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 3x 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 -- it can be leveraged beyond GvHD. One of these indications is Duchenne's. 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 preclinical data plus the -- leveraging the approval of RYONCIL and its mechanism of action, the FDA cleared an IND to commence a Phase 3 trial with 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 cells, 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 the 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 billion, 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 U.S. 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, the 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 United 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. James 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 Silviu 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 continue to invest in our R&D programs. Product development costs for the year was $17.3 million, and our continued 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 in sales and marketing expenses of roughly about $18 million. We have 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, our 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. And with that, I'd like to turn it over to Silviu again to take you through our acute graft associated versus host disease programs and to address the accomplishments that we've 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're making in these children and their outcomes with 84% survival in -- 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 the $125 million since launch of last year. We've now got more than 50 centers onboarded. And importantly, insurance coverage shows that more than 98% of U.S. 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'll 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, 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. Now the adult form of this disease is a huge opportunity for RYONCIL growth. There are more than 2,000 adults annually in the U.S. with steroid refractory graft versus host disease. And of these 50% approximately have got Grade III/IV disease, which is associated with high mortality. Ruxolitinib is the only drug that's approved in the U.S. as second line for adults with acute GvHD. However, only about 42% of patients with the severe form of the disease, Grade III/IV, actually achieve a response at day 28 to ruxolitinib. And these patients who don't 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 or steroid refractory graft versus host disease. In these adults, mortality remains very high. Importantly, those are the very adults who have been enrolled under expanded IND and the 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 another second-line agent have then been offered RYONCIL under our compassionate care program. And what you can see here is on the left-hand side, the day 100 survival in the -- where the dotted line is, is a dismal 20% to 30%, roughly 25% in this particular report. But 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 III/IV 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 who develop Grade III/IV disease as part of their disease process after a bone marrow transplant. This is a market that's 3x 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 U.S. These patients in this trial are being randomized 1:1 to ruxolitinib alone versus ruxolitinib plus RYONCIL. We are hoping to see a significant benefit in terms of the 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 III/IV disease. This trial is expected to take a total of 18 months to complete with -- but it will have an interim analysis when approximately 57% of patients are enrolled or close to 100 patients. And 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 U.S. 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 USD 10 billion. 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 readout 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's where your immune cells come in to try to restore this 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 that inadvertently destroys healthy parts of the disc, you lose disc height and you have severe pain as your outcome. That's 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's 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 continued requirement for progressively increasing dosing. There's addiction behavior that is associated with it and unfortunately, accidental overdosing. Beyond opioids, there really isn't 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 radio frequency 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're 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, 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 a significant pain reduction was seen as early as six 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. But 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 this is -- 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 for 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. And when we've done a formal outreach, a commercial outreach to various types of physicians, what you see in this middle panel circle, 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're targeting the sickest end-stage patients because that's where the biggest unmet need is today as we move forward in the broader indications. Despite an artificial heart, the 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 #1 cause of death in these end-stage patients despite the fact that they've been checked 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 in 2021 and continues to -- in 2026 be supported by registry data. The #1 cause of both death, hospitalizations is right heart failure. 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 backup of blood in your liver and your gut and you have terrible bleeding. And so they die of multiple complications, including severe bleeding from the gastrointestinal tract. Next slide. Our randomized controlled trial was performed in conjunction with the investigators across the U.S. who performed these surgical procedures. And 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 side of 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're successful to gain FDA approval, then this approval can be extended into the much larger patient segment with Class II/III heart failure where there's approximately at least 1 million patients in the U.S. 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 3x bigger than the current pediatric market. Our focus beyond that is on additional inflammatory diseases both in pediatric patients and adult patients. And the first that we're targeting is Duchenne's which is a pediatric disease that's progressive without any cures today that begin 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 retain full value in the U.S. market for the blockbuster indication of chronic low back pain. The pivotal Phase 3 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 if a positive readout 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 II/III 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.

[Operator Instructions] Thank you. Your first question comes from Edward Tenthoff with Piper Sandler.

It's really exciting to see all the progress you guys are making. I have a question. I mean, great growth from RYONCIL in the current label. Would you hazard a guess to what kind of 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. And I guess my second question really came down to with so many different sort of pediatric inflammatory diseases and with the backdrop that DMD has 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?

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 will be -- we will assess it in due course. I know that Jim is very keen to review progress and by midyear we will have a better sense of continued growth. But we certainly expect to see double-digit growth in the coming 12-month period. I think your question pertains also to our potential areas of growth in new inflammatory conditions. Why Duchenne is a great question. Duchenne is 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 and that's when we believe the disease is very late. That's not where we think we can make the maximal difference in benefit. Maximal benefit, we think can be -- should be obtained in children as early as age three to 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 in these young children. And if we can turn off that disease early there won't be any need for product 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 preclinical 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.

Your next question comes from Olivia Saunders with Cantor.

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.

Yes. These are great questions. So 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 U.S., and it's performed in collaboration and partnership with the Bone Marrow Transplant Clinical Trials Network, BMT CTN, which is a network of 80% of all the top bone marrow transplant centers across the U.S. So it's being validated by this group, which is an NIH organization, which tells you where the unmet need is because they're driving this indication. The unmet need is in patients with Grade III/IV 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. And 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 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 III/IV disease, randomized 1:1 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. And so that's how the trial has been powered with powering approximately 85% to 90%. Your question was then -- actually, I'm sorry, I believe the expectation is that it will 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 the 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 of the full study, both of those would support an sBLA filing.

Okay. Great. And have you actually -- are you able to disclose the percent or the number of patients that you've enrolled at this point? -- suffice to say you're still feeling good about the interim...

Patients have been enrolled, treated. We expect the sort of 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. And we're on track to do that.

Your next question comes from Madeline Williams with Canaccord.

Just as it relates to just off the back of the expansion into the adult population, you have mentioned that you've treated adults and adolescents and there has obviously been some good data that has come out as it relates to that. I mean 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?

Yes. Look, as you can imagine, those discussions are very active. What I would say is that there's a new leadership at the FDA, and we're very pleased with the new leadership, both at the level of senior -- the most senior leadership of the FDA as well as at the CBER level as well as the cell and gene therapy level. And there has been evident flexibility shown by the new leadership in other areas of cell and gene therapy. And we're in discussions, and we will have meetings this quarter with the agency to discuss some of these new potential areas of label extension.

And just as it relates to the timeline associated with DMD, you sort of touched on it. But do you sort of have any sort of 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 U.S. 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. And as soon as all of that's in place, the study is ready to begin.

Great. And just finally for me, and I'll jump back in the queue. Just for the next 12 months and sort of growing RYONCIL in the pediatric business, I mean, do you foresee that there'll need to be additional spend in that sort of core business to continue growing it -- the revenue? James O’Brien: Madeleine, 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 utmost important in terms of achieving our milestones as we've 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.

[Operator Instructions] Your next question comes from John Hester with Bell Potter.

A question for Jim. Jim, just looking at balance sheet, 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? James O’Brien: 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. So we'll keep our options open. But at this time, our balance sheet is very supportive of it. 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'll always look to continue to invest in growth opportunities and be supportive of that from a financial standpoint.

And perhaps just a follow-up. At what quarter do you expect to go cash flow positive from operations? James O’Brien: Yes. I'd rather not -- 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.

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 clear trajectory of the company. We've had a terrific year in 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.