Phase 3 trial failure can impart a death blow. Why? Because the company's share price is near historic lows and this means equity raise will be even more dilutive post any failure. Further, the market has doubts about the company's programs because Teva pulled out of sponsoring the heart failure treatment (it was a partner via purchase of Cephalon); Teva also sold out of its stake in Mesoblast. Now the market I am hypothesing has taken that to mean that Teva knows something more than what has been publicly disclosed but I believe the reality is elsewhere. Teva itself has made a bunch of acquisitions in its attempt to become a generic drugs leader and as a result it has to optimise its portfolio, more so in the context of its multi-billion dollar purchase of Allergan. Post the Allergan acquisition Teva has been busy paring back debt. 

But a botched NASDAQ listing and the pullout of Teva has knocked the sails out of Mesoblast's share price. That, in turn, has made raising cash and partnership deals harder. I believe minor holders like Celgene are in a wait and watch mode. If one of the phase 3 trials demonstrate further positive results I believe US giants like Celgene will make a move. 

Nonetheless, development stage biotechs are money sinks. They need lots of cash to keep their programs running and Mesoblast is in a situation where a stumble won't be pretty. 

Mesoblast has one of the most advanced cellular therapy platforms in the world. IThe key IP concerns the use of Mesenchymal Lineage Cells (MLCs) which have unique receptors that respond to activating inflammatory and damaged-tissue signals. t's pioneering MLC-based allogenic stem cell treaments where the idea is to harvest stem cells from donors to mass produce  treatments for ailments. These "off the shelf" product candidates can in theory be mass produced. 

The company already has a treatment for actute GVHD approved in Japan. It is currently running phase 3 trials for approval of the same treatment in the US. 

In addition, Mesoblast has two other products in phase 3 trials in the US, one for advanced/end-stage heart failure and another for chronic backpain.

The GVHD opportunity is modest but a good step towards getting a foothold for MLC treatments in the US. The bigger opportunities are in the backpain and heart failure markets. In the US alone, chronic heart failure related healthcare costs are estimated to be about US$ 60 billion annually. 

In the near-term, partnering opportunities can give a boast and provide much needed cash for bolestering the trial programs and starting commercialisation plans. If the company is successful with either backpain or heart failure programs, it would command a market capitalisation of at least an order of magnitude greater than it's current market cap. 

Mesoblast is a high risk, high reward opportunity.