53. MESOBLAST: www.mesoblast.com

Mesoblast was established in 2004 to develop therapies for patients with bone and joint diseases, and has acquired the world-wide license to commercialise orthopaedic applications of proprietary adult stem cell technology developed by scientists at South Australia's Hanson Institute and Institute of Medical and Veterinary Science (IMVS). The technology is based on precise identification and efficient isolation of a population of adult stem cells called Mesenchymal precursor cells (MPC), which are found at various sites throughout the body, and which have the ability to transform into bone, cartilage, fat, and other tissues. The cells can also create new blood vessel networks and secrete molecules that 'tell' the body's own tissues to re-grow into regions damaged by disease. MPC are capable of both limiting the extent of the injury and increasing the repair of the injured area. When tissue injury persists, the body's own supply of MPC is unable to deal with the problem unassisted. Mesoblast's approach is to deliver large numbers of MPC to the injured site, providing the body with the means to fix itself by using the complex, natural pathways available to MPC. Work by the scientists at the Hanson Institute/IMVS has already achieved outstanding results in vivo, demonstrating that MPC implantation into bone defects large enough to affect weight bearing in sheep resulted in significant regeneration of the segmental defect area when compared to control animals over a twelve month time period. Mesoblast has also acquired a 33.3% interest in Angioblast Systems, Inc. (Angioblast), a United States-based biopharmaceutical company established in 2001 to develop and commercialise novel therapies for cardiovascular diseases. Angioblast has been assigned all the intellectual property relating to MPC from the Hanson Institute/IMVS, and will initially develop the MPC technology for cardiovascular applications. Cellular products represent a new class of medical therapeutics and as such the precise environment for regulating their commercial development and use is still evolving. In order to obtain Food and Drug Administration (FDA) approval to begin clinical trials in the United States, companies developing cellular therapies are required to submit rigorous pre-clinical safety data meeting the standards set by an investigational new drug (IND) application. Mesoblast is developing product manufacturing and scale-up processes to Good Manufacturing Practice (GMP) standards required for FDA and TGA approval which will enable safe and efficient large-scale MPC production for clinical use. Mesoblast and its partner, Angioblast, will seek approval from the FDA for IND applications to enable commencement of multi-centre clinical trials of MPCs for orthopaedic and cardiovascular clinical conditions which affect countless numbers of patients world-wide. It is anticipated that the clinical development program for a cell therapy product will fall somewhere in between that of a device and a drug, meaning that Mesoblast's time-to-FDA market approval for a cell therapy product is likely to be significantly shorter than that for a pharmaceutical product. Mesoblast will seek strategic corporate alliances with major industry players with market leadership positions who may be seeking pipeline extension or other competitive advantage in their markets. From these strategic corporate alliances, Mesoblast expects to potentially earn significant immediate, short-term and/or mid-term milestone payments. In the longer-term, Mesoblast expects to earn significant royalty revenue from the successful sale of its MPC products.