Mesoblast Limited

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. 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 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. Silvio Itescu, Chief Executive of Mesoblast. Please go ahead.

Good afternoon. Good morning to the Mesoblast Financial Results and Operational Update for the full year ended June 30th, 2025. My name is Silvio Itescu. I'm Chief Executive of Mesoblast. On the line with me are Andrew Chaponelle, our Interim Chief Financial Officer, and Marcello Santoro, our Chief commercial officer. We can go to slide four, please. This slide is a snapshot of our company profile. VisaBlast has an FDA-approved product, Rioncil, 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 two additional assets in phase three trials. We have FDA commercial scale manufacturing capabilities, and we've built out a US 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 the 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 the Zancamil stromal cell product portfolio. We have two platform technologies. One is called RemiStemCell, our first-generation technology, and our second-generation technology, which is called RexLemiStroCell. Bryoncil, a branded product approved for pediatric steroid refractory acute graft-versus-host disease and launched in the past quarter, is a lead product on the RemiStemCell platform technology. It is also being developed for adult steroid refractory acute graft-based host disease and inflammatory bowel disease. The RexlimiStrem StroCell platform technology, which uses monoclonal antibodies to isolate a purer, more homogeneous cell population, is in Phase III in two large areas, inflammatory chronic heart failure and chronic low back pain. due to inflammation of the intervertebral discs. More about that later. Next slide, please. This slide identifies the addressable annual market opportunity for our product portfolio. Rioncil, the first mesenchymal stromal cell MSC therapy approved by the FDA, is on the market, has been launched for treatment of children with acute GVHD and with the potential for a label extension in adults with acute GVHD of high severity. This addressable market is approximately $1 billion. Biologic refractory inflammatory bowel disease, which represents an extension of the label opportunity, has more than $5 billion in an addressable market. Heart failure with reduced ejection fraction for our Rexlamy stro-cell product has a more than $10 billion addressable market. Chronic low back pain is similarly positioned for more than $10 billion as an annual market opportunity. And of course, we have multiple additional multi-billion opportunities from existing future product pipeline based on our technology platforms. Next slide, please. We're very pleased with a successful commercial launch to date of Rioncil. In December 2024, Rioncil became the first and only FDA-approved MSC product in the United States. Rioncel became commercially available for purchase March 28, 2025, within a quarter of receiving FDA approval. Since launch, we've onboarded 32 transplant centers across the United States. We aim to, by the end of this quarter, have onboarded the top 45 centers that account for 80% of pediatric bone marrow transplants in the United States. Coverage for Rioncel continues to expand, with over 250 million lives in the U.S., insured by commercial and government payers. Importantly, Medicaid coverage exists for both federal and all states and it was mandated on July 1 of this year. Next slide, please. Now I'd like to move to our financial results. The period ended June 30, 2025. Next slide. Financial highlights for this year are as follows. Revenue from self-therapy products was $17.2 million, up 191% on the prior year. We're delighted that this growth in revenue was driven by the successful launch of Rioncel in the final quarter of the year, with $13.2 million in gross sales and $11.3 million in reported net sales, after a 14.6% gross to net adjustment. Net operating cash spent for the year was $50 million, very similar to the prior year, and this is despite the fact that we've invested in costs related to the commercial team build-out and activities around product launch. Our cash on hand as of June 30th was $162 million US or $247 million Australian. Now I'd like to have Andrew take us through some details on the financial results.

Thanks, Phil. Next slide. Turning to slide 11, we have the financial results for the year ended June 30, 2025. All numbers are reported in US dollars. Total revenues on self-therapy products are up 191% on the prior year. Cost of revenues related to product sales for $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 amortisation of the intangible value of our prior MSC asset acquisition. Selling general and admin expenses were $39.3 million for FY2025, an increase of $14.3 million on FY2024. This increase related to our commercial team build and product launch. For revaluation of contingent consideration, we recognise the loss of $14.9 million in FY2025, a non-cash revaluation of potential future third-party payments. The re-evaluation of warrant liability as a result of FDA approval of RIONCIL and the consequential share price appreciation resulted in us recognising a warrant re-measurement loss of $5 million in FY2025 compared to a gain of $0.8 million for FY2024. Back to you, Sylvie.

Thank you.

Next slide. Let me take you through where we are with Ryonsol 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-based host disease patients do not respond to steroids, and for these in the pediatric age group, Rioncil is the only FDA-approved product for these children. Next slide, please. The results from our pivotal phase three trial that underpinned the successful approval of the product Rioncel is highlighted in this slide. In a 54-patient single-arm multicenter phase three 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 four and five years out, and only 14% had died due to acute graft-versus-host disease. In other words, the early response that we saw in the majority of patients translated into durable long-term survival and essentially cure of the underlying disease, GVHD. Next slide, please. Importantly to understand is that in patients with GVHD who ultimately die of this disease, the cost of treatment, inclusive of intensive care use, is very high. And in fact, a child who has acute GVHD and is treated well without therapy and is able to be discharged from the hospital costs about $1.8 million less than a child with acute GVHD who is untreated and ultimately dies, a substantial cost saving per patient. Next slide. These benefits are even more pronounced when one considers that this is a long-term cure of these patients. The total benefits of patient outcomes using Rioncil range from $3.2 million to $4.1 million when comprising long-term survival benefit cost offsets and cost savings, and this uses a quality of life years gained analysis. Next slide. Beyond pediatric GVHD, we actually have a very clear label extension strategy to expand the use of Rioncil in adult patients with GVHD. Most of the sites that have already onboarded Rioncil for use in children with the disease also perform adult bone marrow transplants. In fact, we have an active compassionate care program to provide RionCil to adults with steroid refractory acute GVHD who have failed other therapies. Adults with this disease have a high rate of non-responsiveness to second-line agents such as ruxolitinib. Survival in those with GVHD who have failed at least one additional agent, such as ruxolitinib, remains as low as 20% to 30% by 100 days. In our compassionate care program, in 25 patients aged 12 and older with serodefractory GVHD who failed ruxolitinib or other second-line agents, survival at 100 days was 76% when Rionsel treatment was used under expanded access. We recently met with FDA to discuss a pivotal trial design. for Rionsel in adults with severe acute GVHD, and we intend to conduct a pivotal study of Rionsel on top of approved second-line therapy, such as ruxolitinib, in patients with severe stereofractory GVHD, such as GRADE-CD or other characterization of severity. This trial will be conducted with the NIH-funded Bone Marrow Transplant Clinical Trials Network, BMT-CTM. The objective is to extend the product's label from children to adults with this devastating disease, enabling Riontel to be used in a population approximately three times larger than the pediatric population that it's currently approved for. Next slide, please. Beyond adults with acute GVHD, we intend to expand the label into other indications of inflammation. Next slide, please. Inflammatory bowel disease, notably ulcerative colitis and Crohn's disease, are two areas that we believe Rionsel has a place. More than 3 million people across the US alone have inflammatory bowel disease. Amongst these patients, 38,000 new cases of ulcerative colitis and 33,000 new cases of Crohn's disease are diagnosed every year. There is a substantial unmet need. of about 30% of patients who remain unresponsive to biologic agents, such as anti-TNF agents or some of the newer monoclonal antibodies. Up to 80% of patients with medically refractory Crohn's disease, 20% of patients with ulcerative colitis that's nonresponsive eventually require surgical treatment of their disease. What is really needed right now is early and durable remission, which remains a major objective for new therapies in order to avoid the longer-term complications and ultimately surgery in these patients. Next slide, please. Mesenchymal stromal cells have had a long history of being evaluated as potential therapeutic uses in patients with inflammatory bowel disease. More recently, local administration of mesenchymal stromal cells has been shown to be safe and to improve outcomes in diseases such as ulcerative colitis and proctitis. On this slide, I'll show you the summary of a pilot study performed in Europe using mesenchymal stromal cells in patients with ulcerative colitis, which occurs in about 30% of patients in isolated conditions in ulcerative colitis. In these 13 adult patients with biologic refractory inflammation, local administration into the rectal mucosa of 20 to 80 million allergen A bone marrow-derived ankylostromal cells was performed under endoscopic injection. As you can see on this slide, by six weeks, mean clinical and endoscopic scores significantly improved. The objective is to achieve remission as early as six weeks. Next slide, please. Local administration of Rioncil was shown to improve outcomes in patients with biologic refractory extensive colitis. In a 12-patient pilot study of biologic refractory inflammation of the colon, local administration of Rioncil, a single dose, resulted in clinical and endoscopic responses and remission by six weeks. You can see in the pictures on the right, in panels A and B, Significant inflammation of the mucosa in a patient with ulcerative colitis extensively involving the colon is clearly evident. In contrast, six weeks later, panels C and D, you can see that the inflammatory protrusions have disappeared. This is endoscopic evidence of remission. In addition, in patients with Crohn's, colitis of the large bowel. Improvement in endoscopic and clinical outcomes was accompanied by reduced serum biomarker of inflammation called calprotectin. The calprotectin levels are consistent with rapid mucosal healing and disease remission. And you can see in the pathologic figure at the bottom, on the left-hand side, the colonic mucosa in active disease is full of inflammatory cells and destruction of the crypts. Six months later, on the right, a repeat endoscopy and biopsy showed total resolution and healing of the mucosa in the patient with refractory colitis. The basis of these results and the fact that we've previously shown that intravenous Remy stem cell resulted in early remission within four weeks following multiple intravenous infusions in patients with prior biologic, we plan to initiate a pivotal study of Rioncil for early remission in patients with medically refractory inflammatory colitis, and we'll be updating the market in due course. Next slide, please. Now, let me move to our second-generation product, RexlimistroCell. This is based on monoclonal antibody isolation and extraction from bone marrow. Chronic low back pain due to degenerative disc disease is a major problem. It impacts more than 7 million people across the United States. There are minimal treatment options for patients who do not respond early to conservative treatments or to anti-inflammatory drugs. In fact, 50% of opioid prescriptions across the United States are for chronic lower back pain, exactly this patient population. We are very much aware of the opioid epidemic the many patients who are dying because of opioid abuse and overuse. There's an urgent need to have a durable improvement in pain and avoid the opioid use that is currently causing terrible pain and suffering across the United States. Next slide, please. Slide 25. This slide identifies a patient journey of patients with chronic low back pain refractory to standard treatment. As I've highlighted, there are minimal options available for these patients. After you've gone through physical therapy, chiropractic, acupuncture and non-serial anti-inflammatory drugs, there's only opioids. Other than opioids, the other potential treatments are interventional therapies that involve interventions with radiofrequency ablation, spinal cord stimulation, et cetera. Epidural steroids typically have short-term benefit only. Ultimately, these patients, after many years of suffering, come to spinal fusion or disc replacement surgery. We believe that Rexlimistrocell can target these patients very early, usually as early as six months after failure of conservative treatments, Although, of course, in our clinical trials, patients have been referred after years of struggling with severe pain. Slide 26, please. This slide summarizes the outcomes in our previous phase three trial based on a single injection of Rexlimistro cell together with a hyaluronic acid carrier to maintain the cells within the disc space. If you just focus on the green at the top, it's the mean change in pain from baseline in patients who received placebo at 6, 12, 18, 24 months, relatively static. In contrast, if you look at the red line at the bottom, you see quite a dramatic reduction in pain at 12 months, and then maintenance of that significant reduction. difference in pain modulation for as long as 36 months from a single injection. Next slide, please. Let me move to Rexlimistrosol for heart failure. Again, a snapshot of this in this space. Slide 28. Heart failure with low ejection fraction also continues to be a major problem with increasing in prevalence, risk of mortality, and heart attacks and strokes. Over 60% of patients with chronic heart failure have underlying ischemia, and these patients are at highest risk of recurrent major adverse events involving the large vessels such as hearts and strokes. Slide 29. This complex slide really just focuses on, again, the patient journey. Patients progress from early stage disease, class 1, moderate disease, class 2, and then to class 3 and class 4. We target the most severe patients where inflammation progresses to class 3 and class 4 and ultimately death. In these patients, we've completed two phase 3 trials, both randomized control trials with endpoints that have demonstrated that in patients with inflammation, we can reduce the endpoints of severity and reduced mortality. Next slide, please. Slide 30 demonstrates on the left-hand side that compared to controls, we significantly reduced in a pivotal phase three trial both in patients with inflammation on the left-hand side as measured by CRP, on the right-hand side as measured by IL-6, the severe risk of mortality quite dramatically over a five-year period of follow-up. Next slide, please, 31. And in this slide, we summarize the overall results in a 500-patient randomized controlled study where you see that on the left-hand side, the two-point MACE, heart attack or stroke, and on the right-hand side, heart attack, stroke, or death progressively decreased as you move from all patients to those patients at highest risk, those with ischemia and inflammation. And what this essentially tells you is that the patients who are at the greatest risk of mortality are precisely those patients who are most likely to respond to a single injection of Rexlimistrosaline to the left side of the heart. On the basis of these data, we met with the FDA last year. We met with the FDA again most recently this year in Type B meetings, and the FDA State that the totality of the trial results from these two studies could support an accelerated approval pathway under the existing RMAT designation of the program. We met recently and aligned on items required for filing a biologics license application for Revascor regarding chemistry, manufacturing controls, potency assays, and the proposed design and primary endpoint for a confirmatory trial should approval be obtained. We could now go to the final slide, slide 34. This identifies our corporate milestones and updates on expected deliverables in the coming 12-month period. For pediatric and adult inflammatory diseases, Ray Onsell will commence a registration trial for label expansion in adults, the GBHD, and will initiate a study for inflammatory colitis. For chronic heart failure in adults with low ejection fraction, we're preparing for an accelerated approval filing for Revascor. And finally, for rexalemic stress and chronic low back pain, a confirmatory phase three trial is actively enrolling across multiple sites in the US to confirm the data that we showed in the first trial, which is the reduced pain at 12 months as the trial's primary endpoint. And the placebo-controlled trial with a 12-month follow-up following the completion of the last patient enrolled which we expect to happen toward the end of this year or first quarter during the first quarter of next year. On that basis I think I'll say thank you for listening to us and I'd like to open this call to questions.

Thank you. If you wish to ask a question please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request please press star 2. If you're using a speaker phone, please pick up the handset to ask your question. Your first question today comes from Ted Tehoff with Piper. Please go ahead.

Great. Thank you very much, and congrats on all the progress. Really excited to see beyond sales coming off. I wanted to get a sense from you guys. You laid out how the opportunity in adult disclosure, how long do you think it might take for label extension into one that seems to travel. Thank you.

Thanks, Ed. I think you asked how long it might take for label extension to occur in adults. Yeah, 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. We'll 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 CD 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 this study this year and we'll come back with specific dates and duration.

Great, thank you. And then can you give us a little more color on how the BAC trial, the phase three chronic lower back pain trial is coming?

Sure. 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 two to three 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 three trial, we saw three times 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 enrolment criteria. And to date, we're enrolling well. There are no safety signals. Obviously, the trial is double-blind, so we don't know really how it's coming along, but we're confident that we'll complete enrolment. 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'll be a 12-month period of follow-up in order to read out the trial's primary endpoint of pain at 12 months.

That's very helpful, Silvio. Thank you.

The next question comes from Olivia Breyer with Cantor. Please go ahead.

Hi, guys. Congratulations on a really strong start to the launch, and thank you for the questions. 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, you know, 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 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 our inventory is constantly stocked to meet the needs of children at every weight balance. As we treat kids, it might be a 20-kilogram child and that gets replenished. If it's a 50-kilogram, a larger child, then that kid gets replenished. So we continue with each child that gets treated. They would be treated typically for eight to 12 kits for infusions. And as each infusion goes out, we replenish. Typically, we send two 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 discuss how many? treatment kits you guys have actually administered so far?

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 JAK-FI-naive patients, or will the entire study really be JAK-FI-refractory patient population for the adults?

Yeah, 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 expected to stay at. Yep. With respect to the adult trial, we've decided not to go to JAKIFI refractory patients, but rather on top of JAKIFI. 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 CD 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 JAKIFY. That's the market opportunity. And we believe that adding our cells on top of JAKIFY 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.

Okay, great. Thank you. Very helpful context.

The next question comes from Elise Shapiro with Canaccord. Please go ahead.

Hi guys, thanks for taking the questions. 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 Jackafee trials?

I think we updated through our release today in our slides the summary of our discussions with the FDA. The FDA and mesoblasts 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 Jaka-Fi with grade CD disease where Jaka-Fi only helps around 50% of patients and the other 50% don't respond. Rather than waiting for these patients to fail Jaka-Fi where the survival is an abysmal 20%, the best way to provide ourselves is in combination with Jaka-Fi 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 would 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 three times the current pediatric addressable population. And that's what 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, you know, 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 cryoncil as well as intravenous delivery in order to aim to achieve rapid remission as early as week six to week eight in patients who are otherwise refractory to other biologics. Remission remains a challenge. Remission remains a target that is not well addressed by any of the 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. Thanks. And just one more, if I may. You know, 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?

Yeah, we have no way of knowing specifically how much of the product is used for QGVHD versus for other indications because physicians and their licenses enable them to make their own judgments as to which patients are best and most suitable for Riontsel 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 QGBHD who've fallen between the cracks and have not been domiciled, they've 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-needed basis 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.

Great, thank you. The next question comes from Michael Oconowich with Maxim Group. Please go ahead.

Hi, Sylvia. Thank you so much for taking my question today. Congrats on a great start to the launch. I guess to start off, I'd just like to see the U.S. sense of how the initial sales were distributed over the period, where they weighted more towards the back end, and trying to get a sense of what sort of revenue trajectory we can expect going into the second half of calendar year 25. Yeah.

Look, I think it's a little bit early to make predictions right now. We've only had really one quarter of sales that we're reporting. 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, you know, over the coming quarters, we're going to see continuous strengthening of sales. But to provide guidance is a little bit early. Marcella, would you like to add?

Yeah, no, I think it's a good question, and thank you. 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, right? The performance today, 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 all the successful business launches, right? 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 That is super important for our future performance.

All right. Thank you. 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 six to 12 months, what sort of feedback have you gotten on the potential for 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?

Yeah, 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 Rionsel. I think getting alignment on that is really important ahead of the filing. And the other important issue is that we have total alignment on what a confirmatory study of you know, 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.

Thank you. I appreciate the update and looking forward to future progress. Thank you.

Your next question comes from John Hester with Bell Potter. Please go ahead.

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

Marcello, would you like to address that? I think the short answer is already there.

Yeah, I'm very happy to do it. 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 title of the experts of our team. We've engaged with more than 97 payers around clinical and value discussions. Lyons is now covered by insurance plans representing over 250 million lives across both the commercial and government payers, right? And I think importantly, Medicaid is covered and is in place everywhere in all states as of July 1st, right? And in addition to that, which I think addresses your part of the question, is that the commercial payer support has also been strong. All of the major players, and that includes Aetna, FIGNA, United, Anthem, Humana, Pride, which is the Blue Cross, Blue Shields, right, they have issued favorable coverage policies for re-onsets, right? And I think notably, these policies do not require a step therapy, which simplifies patient access significantly, right? All of this has occurred within the first six months post-launch. And then to further support the reimbursement, a specific J-code for re-onset is already in place. and goes into effect on October 1st, allowing for more efficient billing from our clients or from our customers and payers, you know, along the CMS publish rate, right? So that will be very important as we move forward. And, you know, October is around the corner, and that will be important not only for us but also for our clients.

Great. Thank you.

Thank you. That brings us to the end of today's call. I'll now hand to Dr. Teskew 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 Zincamyl 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.

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