4.A History and Development of Mesoblast Mesoblast Limited Mesoblast Limited was incorporated on June 8, 2004 as a public company in Australia under the Corporations Act 2001 with an indefinite duration. On December 16, 2004 we became listed on the Australian Securities Exchange (the “ASX”). On November 13, 2015, we became listed on the Nasdaq Global Select Market (“Nasdaq”) and from this date we have been dual-listed in Australia and the United States. Our registered office is located at the following address: Mesoblast Ltd Level 38 55 Collins Street Melbourne VIC 3000 43 Table of Contents Australia Telephone: +61 3 9639 6036 Web: www.mesoblast.com Our agent for service of process in the United States is Mesoblast Inc., W.R. Grace Building, 1114 6th Avenue, 4th Floor, New York, NY 10036. All information we file with the SEC is available through the SEC's Electronic Data Gathering, Analysis and Retrieval system, which may be accessed through the SEC's website at www.sec.gov. For a list of our significant subsidiaries, see Exhibit 8.1 to this Annual Report. Important Corporate Developments Fiscal year 2026 to date of annual report August 2026 Completed patient treatment in the MSB-DR004 pivotal randomized controlled Phase 3 trial of rexlemestrocel-L for chronic low back pain ("CLBP") associated with the inflammatory condition of degenerative disc disease. The major milestone was achieved with 350 patients randomized and treated with either an intra-discal injection of rexlemestrocel-L or sham injection. July 2026 Achieved the target of at least 300 patients treated in the pivotal Phase 3 randomized controlled trial of rexlemestrocel-L for CLBP associated with degenerative disc disease. June 2026 Mesoblast received a BLA filing number from the United States Food and Drug Administration ("FDA") and requested a modular review of its BLA for rexlemestrocel-L in prevention of life-threatening gastrointestinal bleeding due to right ventricular dysfunction in end-stage heart failure patients with a left ventricular assist device ("LVAD"). Mesoblast drew down US$50.0 million from its five-year facility retiring the higher cost NovaQuest Capital Management LLC debt facility eliminating the short-term debt obligations. April 2026 Pivotal Phase 3 clinical trial evaluating rexlemestrocel-L for the treatment of CLBP associated with degenerative disc disease achieved its patient recruitment target. Announced acquisition of an exclusive worldwide license to a patented chimeric antigen receptor ("CAR") technology platform for precision-enhanced augmentation of therapeutic mesenchymal lineage stromal cell ("MSC") products. Hosted inaugural R&D Day in New York City providing an update on its near- and mid-term blockbuster opportunities, showcasing its leadership in allogeneic cell therapy innovation, and outline commercial strategies for continued revenue growth. The U.S. FDA granted Investigational New Drug ("IND") clearance to directly proceed for a registrational clinical trial evaluating Ryoncil® (remestemcel-L-rknd) in Duchenne muscular dystrophy ("DMD"), which affects approximately 15,000 children in the US. March 2026 Appointed Teresa Montagut as Clinical Development & Medical Affairs Head. February 2026 Provided data presented at the February 2026 Tandem Meetings. The study results showed that Ryoncil® achieved similarly high survival outcomes in SR-aGvHD irrespective whether used in children or adults, as second or third line, and in ruxolitinib naive or resistant patients. January 2026 Mesoblast provided an update on use of Ryoncil® since commercially available in March 2025 for the approved label in children 2 months and older with steroid-refractory acute graft-versus-host disease. Mesoblast provided feedback received from the FDA on potential filing of a BLA for rexlemestrocel-L in patients with chronic discogenic low back pain. Announced changes to Board of Directors’ leadership roles. Mr Philip Facchina was appointed to the role of non-executive Chair and Ms Lyn Cobley as Chair of the Audit and Risk Committee. 44 Table of Contents December 2025 Mesoblast repaid in full the existing senior secured loan from Oaktree Capital Management, Inc. and in part the subordinated royalty facility from NovaQuest Capital Management LLC by drawing down US$75 million from a new five-year credit-line facility. A second tranche of up to US$50 million was available to be drawn at Mesoblast’s option until June 30, 2026. November 2025 Mesoblast and the U.S. National Institutes of Health (NIH)-funded Blood and Marrow Transplant Clinical Trials Network (BMT CTN) will collaborate on a pivotal trial of Ryoncil® as part of first-line regimen in adults with severe aGvHD refractory to corticosteroids. Appointed James M. O’Brien as Chief Financial Officer. Announced that the U.S. FDA scheduled a meeting in early December to discuss Mesoblast's data on opioid reduction and cessation from its first Phase 3 study (MSB-DR003) of rexlemestrocel-L in patients with CLBP. October 2025 Announced that a specific Healthcare Common Procedure Coding System (HCPCS) J-Code assigned to Ryoncil® by U.S. Centers for Medicare & Medicaid Services ("CMS") became active for billing and reimbursement on October 1, 2025. September 2025 Mesoblast entered into a convertible note subscription agreements to issue, at Mesoblast’s sole discretion, up to US$50.0 million of unsecured convertible notes. July 2025 Mesoblast provided a commercial launch update for Ryoncil® (remestemcel-L-rknd). More than 25 transplant centers have been onboarded since product launch. Coverage for Ryoncil® continues to expand with over 250 million US lives insured by commercial and government payers. Federal Medicaid coverage by CMS is in place and mandatory fee-for-service Medicaid coverage for Ryoncil® became effective July 1 in all US states. Mesoblast received the FDA minutes from its Type B meeting for Revascor® (rexlemestrocel-L) confirming alignment on items regarding chemistry, manufacturing & controls (CMC), potency assays for commercial product release, and proposed design and primary endpoint for the confirmatory trial post approval in ischemic heart failure with reduced ejection fraction (HFrEF). Environmental, Social and Governance (“ESG”) Statement Introduction: Our Approach to Sustainability Mesoblast's most significant contribution to sustainability lies in its core mission: expanding access to innovative treatments for patients with serious and often underserved medical conditions. These include steroid-refractory acute graft versus host disease (SR-aGvHD), cardiovascular diseases, immune-mediated and inflammatory conditions, oncology and haematology disorders, and spine and orthopaedic diseases – subject to regulatory approvals. This purpose delivers not only substantial social impact and potential financial value, but also underpins how the Company operates. Mesoblast places high value on its people, recognizing them as critical assets and investing in their development. Given the current scale of our operations and our limited manufacturing activities, we believe our direct environmental footprint is relatively modest compared with many large pharmaceutical manufacturers. Together, these elements are intended to support Mesoblast's ability to deliver on its mission effectively over the medium to long term. Our commitment to sustainability is embedded in Mesoblast’s five key corporate values which define who we are and what we stand for. These values reflect our commitment to our customers, our colleagues, and the patients we serve. Integrity is at the heart of everything we do, supported by accountability for our commitments, collaborative teamwork, a relentless pursuit of excellence, innovation and outside the-box thinking. These principles guide every business decision we make and all Mesoblast personnel are expected to demonstrate and uphold these values each and every day. 45 Table of Contents Integrity - We act with integrity in all of our dealings, with the best interest of patients, care givers and our people as our guide. What we do we do with conviction.Accountability - We hold ourselves and each other responsible and ensure that our words and actions support Mesoblast’s vision and valuesTeamwork - We believe in what we can achieve collectively and have an appreciation of our shared and unique ability to collaborate with our people and our partners, while focused on our patients and their families.Excellence - We engage in continual learning so that we, as individuals and as an organization, can reach our highest potential.Innovation - We are focused on the bold pursuit of developing and delivering novel treatments to improve patient outcomes through cutting edge science. Recognizing that sustainability is a broad and overarching concept that can be applied to all aspects of our business including finance, operations and impact, this Statement, focuses specifically on key environmental, social and governance (“ESG”) matters. In assessing and reporting our ESG initiatives and performance, we take into account: •Mesoblast’s size and stage in its growth cycle: it is a commercial stage biotechnology company with 108 employees as of June 30, 2026, limited manufacturing and a recently FDA approved product in the United States. This means that some reporting topics will be less relevant for us and our stakeholders until we grow our product portfolio and operations; and •Appropriate sustainability standards: for example, the Sustainability Accounting Standards Board’s (“SASB”) Biotechnology & Pharmaceuticals Sustainability Accounting Standard, the Global Reporting Initiative’s (“GRI”) Universal Standards, and the Biopharma Investor ESG Communications Guidance 4.0 are relevant. The following ESG topics have been identified as areas of strategic focus based on an assessment of their impact on the business and our understanding of their importance to stakeholders: 1.Corporate Governance 2.Business Ethics, Integrity, and Compliance 3.Risk Management 4.Human Capital Management 5.Product Quality and Patient Safety 6.Ethical Marketing 7.Supply Chain Management 8.Access to Healthcare 9.Environment These are dealt with in turn below. 1.Corporate Governance Mesoblast is committed to implementing and achieving an effective corporate governance framework to ensure that the Company is managed effectively, honestly and ethically. More information on our corporate governance practices is set out in Mesoblast’s Corporate Governance Statement, available at www.mesoblast.com. The Company references and reports against ASX Corporate Governance Council’s (Council) Corporate Governance Principles and Recommendations. 46 Table of Contents Mesoblast’s Board of Directors (the “Board”) provides oversight of the Company’s ESG-related risks and opportunities on a regular basis at Board meetings, and in particular through the following three committees: •Nomination and Remuneration Committee (“NRC”) •Audit and Risk Committee (“ARC”) •Clinical Committee The NRC assists the Board in the discharge of its responsibilities, and in particular to ensure that there is an environment where the Board can carry out effective and responsible decision-making and oversight, including on ESG matters such as fair remuneration and health & safety. Since June 2022, all independent Non-Executive Directors of the Board are members of the NRC, reflecting the importance the Board places on ESG. In addition to its main financial reporting responsibilities, the ARC is tasked with overseeing the effective operation of Mesoblast’s risk management framework, in which certain ESG matters are considered. The Clinical Committee supports our ESG objectives by strengthening the governance and oversight of our clinical development programs, including monitoring their efficient execution and progress. In doing so, it reinforces our commitment to responsible innovation in the interests of patients and the wider community. Management is responsible for assessing and managing ESG-related risks and opportunities within the board approved control framework, and for reporting progress against goals and targets to the Board. 2.Business Ethics, Integrity, and Compliance We are committed to the highest standards of ethical conduct and transparency in the way we deal with our patients, healthcare providers, employees, strategic partners, and other important stakeholders. We comply with all national and local laws and regulations applying to our Company. Zero cases of material non-compliance occurred in FY26. Mesoblast has established a Code of Business Conduct & Ethics (“Code”) to promote honest and ethical conduct, comprehensive disclosures of business dealings, compliance with government laws and regulations, and a positive work environment. All Mesoblast personnel, including Directors, officers, employees, contractors, and consultants, are expected to comply with the principles set out in the Code. The Code covers the following topics: •Our Values •Ethical business practices •Safe workplace and respectful workplace conduct •Fair competition •Conflicts of interest •Social media use •Confidentiality and protection of assets •Quality assurance •Price reporting •Financial reporting •Securities trading •Ethical research •Interactions with the patient community •Ensuring product quality and patient safety •Interactions with healthcare professionals •Ethical marketing and advertising •Compliance with laws and regulations 47 Table of Contents The Code also states that it is against Mesoblast policy for personnel to use illegal drugs or be under the influence of or impaired by alcohol or drugs while on company property or performing company work. No issues of Code material non-compliance have been brought forward to the Board in FY26. Mesoblast has an Anti-Bribery and Anti-Corruption Policy and complies with global and regional laws preventing corrupt business practices and bribery, including the U.S. Foreign Corrupt Practices Act and the United Kingdom Bribery Act. We have a Disclosure of Complaints and Concerns Policy which addresses, among other things, breaches under the Company’s Code, Anti-Bribery and Anti-Corruption Policy, or other Company policies. Under the Disclosure of Complaints and Concerns Policy, Mesoblast personnel are entitled to robust employment protections if they report concerns and suspected violations covered under the policy. Personnel can report to Legal, Chair of the Board, or other officers or senior managers, and may do so anonymously. Further, Mesoblast’s Fair Treatment Policy requires personnel to report incidents of workplace harassment and prohibits any form of retaliation against individuals who do so in good faith. During FY26, Mesoblast remained in compliance with the Fair Treatment Policy and is satisfied that it adhered to the requirements of the policy in all material respects. In addition, Mesoblast has an ‘Ethics Hotline’ that is managed by a third-party, where our personnel and other stakeholders may make a report anonymously, 24 hours a day, seven days a week. There have been no whistle-blower reports to this hotline in the reporting period. All Mesoblast personnel are required to acknowledge the Code and other key policies and are required to participate in annual compliance training. The Company has a process in place to inform the Board or a committee of the Board of any material breaches of the Code, the Anti-Bribery and Anti-Corruption Policy, and material incidents reported under the Disclosure of Complaints and Concerns Policy. A copy of the Code and other key policies can be found at www.mesoblast.com. 3.Risk Management The Board is responsible for satisfying itself annually, and more frequently where required, that management has established and implemented an effective system of risk management and internal control framework. Management is responsible for maintaining appropriate policies, processes and systems to support effective risk management, compliance, and internal control systems. The Audit and Risk Committee (ARC) supports the Board in overseeing Mesoblast’s risk management framework by monitoring management’s actions in the identification, evaluation, management, monitoring, and reporting of material operational, financial, compliance, strategic, and certain ESG risks. Mesoblast’s risk management group is part of executive management and is responsible for designing, implementing, monitoring, and reporting of Mesoblast’s approach to managing material business risks as well as the effectiveness of its risk management and internal control system. ESG risks are integrated into and are considered as part of Mesoblast’s broader risk management system. Mesoblast's risk management group regularly reviews Mesoblast’s risks across its business and operations, and Mesoblast’s material business risks and risk management framework are reviewed by the ARC at least annually. As part of the process of continual improvement, we introduced a standardized tool to assess our portfolio and corporate risk and since the commercial launch of Ryoncil® in March 2025 we have updated the standardized tool to incorporate commercial product risks. For cybersecurity management, see Item 16K of this Annual Report. 4.Human Capital Management 4.1Diversity and Inclusion Mesoblast is committed to fostering a diverse, inclusive and equitable workplace. Our Diversity Policy recognizes and values differences in ethnicity, gender, language, age, sexual orientation, religion, socioeconomic status, physical and mental ability, thinking styles, experience, and education. We believe a broad range of perspectives arising 48 Table of Contents from a diverse workforce drives innovation and contributes to long-term business success. Diversity enhances our creativity, adaptability and productivity. Consistent with this policy commitment, Mesoblast seeks to engage the most appropriate and relevant partner organizations, consultants, experts, and personnel. Our recruitment and engagement practices focus on attracting and retaining individuals who are well-qualified for their position and who are aligned to Mesoblast’s five core values. We seek people who will embrace the Mesoblast culture and work ethic. In order to meet and comply with our Diversity Policy, Mesoblast employs the following principles: •Mesoblast seeks and encourages diversity in current and potential employees; •Mesoblast promotes equal employment opportunities based on capability, performance and potential for growth and progression; •Recruitment, professional development, succession management, promotion, and remuneration decisions are all based on performance and capability aligned to the specific job role, salary ranges, and a pre-set criteria prior to the activities to ensure any biases are reduced; •Mesoblast seeks to build a safe working environment by recognizing and taking action against inappropriate workplace behavior, including bullying, discrimination, harassment, victimization, and vilification; •Mesoblast promotes flexible work practices where possible and reasonable in the circumstances, to meet the differing needs of our employees; and •Mesoblast ensures appropriate policies and procedures exist that encourage diversity and meet legislative requirements. Line management is supported to manage diversity to ensure that employees are treated fairly and objectively. We have clear reporting procedures for any type of discrimination or harassment, combined with follow-up procedures to prevent future incidents. The Board, through the NRC, is responsible for overseeing our Diversity Policy. Mesoblast’s Head of Human Resources, with the support of the Chief Executive Officer and the executive team, is responsible for implementing the Diversity Policy. The Board, through the NRC, is responsible for approving and reviewing measurable objectives for achieving gender diversity in the workplace. Mesoblast has set the following measurable objectives: i)Increase the number of women on the Board as vacancies arise and circumstances permit; ii)Increase the number of women who hold senior executive positions as vacancies arise and circumstances permit; and iii)Ensure the opportunity exists for equal gender participation in all levels of professional development programs. All Mesoblast employees are provided access to the same development programs. A copy of Mesoblast’s Diversity Policy can be found at www.mesoblast.com. Table – Gender diversity statistics* Gender FY26 Senior Executives** FY26 Total Workforce FY25 Senior Executives** FY25 Total Workforce Male 7 46 7 36 Female 3 62 3 45 Other — — — — % Female 30 % 57 % 30 % 56 % *Based on number of employees as at June 30. Excludes contractors and consultants. **A senior executive position is one held by an executive who reports directly to the Chief Executive. Every employee, consultant and service provider has the right to work with Mesoblast in an environment that is safe, and free from intimidation, harassment, and abuse. The company maintains a zero-tolerance approach to harassment 49 Table of Contents and inappropriate workplace behavior, including veteran status, uniform service member status, or any other protected class under federal, state, or local law. Inappropriate behavior, including verbal or physical conduct by any individual that harasses another, disrupts another’s work performance, or creates an intimidating, offensive, abusive, or hostile workplace, is not tolerated. In addition, we will not tolerate comments, jokes, or materials, including emails, which others might consider offensive. To reinforce these standards all Mesoblast personnel are required to complete annual mandatory training to help recognize, prevent and deal with inappropriate behavior in our workplaces. This training includes the New York City Commission on Human Rights – Accredited Program: Confronting Sexual Harassment; Tools & Strategies to Create a Harassment Free Workplace and Mesoblast’s Fair Treatment policy. Through these initiatives, Mesoblast seeks to foster an inclusive, respectful, and professional workplace culture for all personnel. 4.2Health and Safety Mesoblast is committed to providing a workplace that is safe for all associates and one that complies with health and safety laws. As an organization whose activities are predominantly office and laboratory based, Mesoblast chooses to track its safety record using total recordable incident frequency rate (“TRIFR”) i.e., number of recorded injuries for each one million hours worked. No incidents were recorded for FY26. An Environment Health and Safety Management System and supporting policies have been developed and aligned for each jurisdiction in preparation for company wide training. Mesoblast continued to implement hybrid/flexible working arrangements, and the employee assistance program was made available across all sites. 4.3Recruitment, Development and Retention Mesoblast operates at the forefront of a highly specialized industry, and we recognize that our talented people are key to developing our cell therapy technology. Our policies and procedures follow equal employment opportunities principles for fair treatment, including diversity and compensation. Our employees are given equal access to job opportunities and promotions based on capability, performance and potential for growth and progression as part of our retention program. Mesoblast’s recruitment process enables our line managers to prepare a job description that outlines accountabilities and selection criteria that emphasize the skills, knowledge and experience. Job criteria and interview guides are prepared for each role advertised to ensure consistency across all the interviews. Jobs are advertised through multiple channels based on the specialization of the job role. All job roles are published on the Mesoblast intranet site providing transparency to all employees within the company and an equal opportunity to apply. Job descriptions are prepared in a way that enables employees to consider lateral moves based on competence rather than expertise in years of service. In FY26, the overall voluntary turnover rate was approximately 14%. Of that amount, 42% were male and 58% were females departing the Company. Exit interviews are conducted with all departing employees and trends are monitored so that actions to minimize the turnover can be taken. While acting and higher duty opportunities were minimal during this period, job profiles were prepared to enable existing employees to consider lateral moves based on competence rather than years of service, where appropriately credentialed. We provide opportunities for all colleagues to participate in professional training and education so they can enhance their skill sets and career. During FY26, employees were given the opportunity to participate in a development program that is linked to the annual Performance Management System. During the reporting period, Mesoblast continued to use an online performance and merit management program and further integrated an online professional development platform that records and tracks participation in role-relevant learning and development opportunities. The online performance management program enables employees to monitor their progress, set objectives and receive regular feedback from their manager. The formal annual review process evaluates each employee’s performance against objectives and quantifiable criteria that are aligned to the Mesoblast business plan, supporting a fair and consistent assessment process and helping to minimize the risk of bias. All employees below the executive level participated in this program during the period. 50 Table of Contents 5.Product Quality and Patient Safety 5.1Scientific Research and Innovation Over the past decade there has been a surge of interest internationally in the cutting-edge science of cellular medicines and their use in treating a wide range of diseases. Mesoblast is a commercial stage biotechnology company with a significant clinical pipeline of advanced staged product candidates. We work in close collaborative associations with leading cell therapy research centers, as well as having our own in-house R&D laboratories and specialists. We ensure rigorous scientific investigations are performed with well-characterized cell populations in order to understand mechanisms of action for each potential medical application. We undertake extensive pre-clinical translational studies to guide subsequent clinical trials. 5.2Use of Stem Cells Mesoblast’s novel allogeneic product candidates are based on rare (approximately 1:100,000 in bone marrow) mesenchymal lineage cells that respond to tissue damage, secreting mediators that promote tissue repair and modulate immune responses. Mesenchymal lineage cells are collected from the bone marrow of healthy adult donors, and proprietary processes are utilized to expand them to a uniform, well-characterized, and highly reproducible cell population. This enables manufacturing at an industrial scale for commercial purposes. Mesoblast’s cells can be administered to patients without the need for donor-recipient matching or recipient immune suppression. The distinction between embryonic stem cells (“ESCs”) and non-ESCs, such as our mesenchymal lineage cells, can be easily misunderstood by the public and has the potential to create negative public attitudes toward cell therapy. As Mesoblast’s cells are not ESCs, we minimize the risk of being exposed to ethical, legal, or social concerns that have arisen in relation to the collection and use of ESCs. 5.3Use of Animals in Research Mesoblast is committed to the welfare and humane treatment of animals and only undertakes development studies in animal models where required by applicable regulatory bodies. These studies are undertaken by expert third-party providers who are specialists in the management of animals and their welfare. Mesoblast’s approach to product development is to ensure rigorous scientific investigations are performed with well-characterized cell populations in order to understand mechanisms of action for each potential indication. Extensive preclinical translational studies guide clinical trials that are structured to meet stringent safety and efficacy criteria set by international regulatory agencies. In the United States, where the majority of our clinical development takes place, all of our product candidates are regulated as biological products by the Center for Biologics Evaluation and Research (“CBER”) in the FDA. Biological products are subject to federal regulation under the Federal Food, Drug, and Cosmetic Act (“FDCA”), the Public Health Service (“PHS”) Act, and other federal, state, local and foreign statutes and regulations. Both the FDCA and the PHS Act, as applicable, and their corresponding regulations govern, among other things, the testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping, distribution, import, export, reporting, advertising and other promotional practices involving drugs and biological products. The process required by the FDA before a biological product may be marketed in the U.S. generally involves years of studies and many complex steps. The first of these is completion of nonclinical laboratory studies, meaning in vivo and in vitro experiments in which an investigational product is studied prospectively in a test system under laboratory conditions to determine its safety, must be conducted according to Good Laboratory Practice (“GL”) regulations, as well as, in the case of nonclinical laboratory studies involving animal test systems, in accordance with applicable requirements for the humane use of laboratory animals and other applicable regulations. Some of the manufacturing materials and/or components that we use in, and which are critical to, implementation of our technology involve the use of animal-derived products. Our media is sourced from fetal bovine serum (“FBS”), and is the main consumable used in our manufacturing process. 51 Table of Contents While FBS is commonly used in the production of various marketed biopharmaceuticals, our suppliers of FBS must meet our strict quality standards are thus limited in number and region. 5.4Product Quality The Company has a Quality Management Department with appropriate controls in place for monitoring and compliance of clinical and non-clinical studies as well as manufacturing operations. Our quality assurance processes align with the widely accepted quality standards from the ICH Guidelines created by The International Conference on Harmonization of Technical Requirements for Pharmaceuticals for Human Use (“ICH”) as well as FDA Regulations. All Mesoblast personnel are responsible for identifying and promptly reporting actual or potential adverse events and product quality complaints. This includes any reported problem with a finished product, its packaging, inappropriate healthcare professional use, or unintended patient reaction. As part of our regulatory obligations all adverse events and product complaints must be reported in accordance with serious adverse events reporting notification within 24 hours of awareness. To support compliance with these obligations, Mesoblast provides personnel with regular training in relation to our obligations and responsibilities. 5.5Clinical Trials and Patient Safety Mesoblast collaborates with healthcare professionals, academic organizations, and contract research organizations (“CRO”) to conduct company-sponsored pre-clinical and clinical research. The Company may also provide financial support or drug product for independent third-party studies such as Investigator Initiated Trials (IITs) via grant requests. All studies must be scientifically valid and designed to generate data that address defined product development or other clinical and/or business need. Research funding, product support and other support are provided solely to advance legitimate scientific and clinical research. These research initiatives are never intended to influence, induce or reward healthcare professionals or healthcare organization to use for recommending, or purchasing Mesoblast products, or to encourage any off-label use of marketed products. Each potential study subject/study subject legal guardian is provided with an Informed Consent Form (“ICF”) by the clinical trial site study team. The ICF contains information that must be provided to each possible study candidate, such as an explanation of the purpose of the research, possible risks/benefits as well as statements describing the confidentiality of information collected, how the information may be used and who may view this information. Each potential study subject/legal guardian is given time to read the ICF and to ask questions about anything they don’t understand. In addition, the ICF provides the Primary Investigator’s (“PI”) and Independent Review Board’s (“IRB”) contact information to the subject to ask questions and/or report any study related concerns. Once all questions are answered, signatures are obtained to record consent. Mesoblast, as the Sponsor, together with the CRO, monitors the sites for any protocol deviations throughout the course of the study. If and when protocol deviations are identified, we will work with the CRO and site(s) to address them as quickly as possible. Study subject safety is front and foremost in our conduct of all our clinical studies. Between our Therapeutic Area Heads, Quality Assurance (“QA”), and Safety and Clinical Operations, we monitor the conduct of our clinical trials extremely thoroughly and work to protect the well-being of the study subjects as well as the integrity of the trial. Company exploration of innovative therapies, including research projects, database reviews, and pre-clinical and clinical trials, are designed to first and foremost protect the rights and safety of study subjects and to maintain the integrity of research data. We do this by complying with all regulatory standards regarding research programs and encouraging all involved persons to report any deviations, including inaccurate reporting of study data, inappropriate use of study funds or pharmaceutical product, falsification of study reports, or failure to obtain Independent Review Board or other required approval prior to conducting a study. This process includes all clinical trial investigators attesting that they’ve read and understood the contents of the clinical trial protocol and agree to conduct the trial in compliance with the protocol, good clinical practice and applicable regulatory requirements. 6.Ethical Marketing Mesoblast is committed to conducting all marketing and communication activities by adhering to applicable laws, regulations, relevant industry codes (including the Pharma Guidelines) and internal policies and procedures, ensuring that all aspects of our marketing and communications reflect the highest standards of ethics, transparency, and responsibility. Mesoblast provides regular training to all employees, consultants and contractors on the Global Business Conduct and 52 Table of Contents Ethics, which explicitly prohibits off-label promotion, and provides a wide range of additional internal and external educational activities around appropriate marketing practices for employees and healthcare professionals (HCPs). We recognize that as a biotechnology company developing innovative, cell-based medicines, our stakeholders – including patients, HCPs, regulators, investors, and the broader community – place significant trust in the accuracy and integrity of the information we provide. Our ethical marketing principles are guided by the following commitments: i.Patient-Centered Focus •All marketing activities place patient welfare, safety, and access to care at the center of decision-making. •We avoid any practices that could misrepresent benefits, understate risks, or create unrealistic expectations of outcomes. •Mesoblast prioritizes the patient regardless of their ability to pay for the product. Our Patient Assistance Program supports on-label patients with access to our products as needed. ii.Transparency and Accuracy •We provide clear, evidence-based and balanced information that accurately reflects the scientific data, clinical trial outcomes, and regulatory status of our products and pipeline therapies. •Communications are designed to support informed decision-making by patients, caregivers, and healthcare professionals. iii.Compliance with Regulations •All marketing and promotional activities comply with the laws, codes of practice, and ethical guidelines in the jurisdictions in which we operate. •We proactively monitor evolving regulatory standards to ensure our practices remain best-in-class. iv.Integrity in Engagement •We foster respectful, responsible relationships with healthcare providers, patient groups, and industry stakeholders, ensuring interactions are free from undue influence. •Sponsorships, collaborations, and educational activities are disclosed and aligned with our mission to improve patient outcomes. v.Sustainability and Social Responsibility •Our marketing approach reflects Mesoblast’s broader ESG commitments by supporting equitable access to medicines, encouraging responsible resource use, and advancing long-term social good. •We are mindful of the impact of our communications across diverse communities and strive for inclusivity in all engagements. Through these principles, Mesoblast upholds ethical marketing as a core part of our ESG strategy, ensuring that our innovations are promoted responsibly and with integrity, in line with our purpose to deliver transformative cell-based therapies for patients with serious and life-threatening diseases. 7.Supply Chain Management Mesoblast has an established vendor assurance program through which suppliers are audited for purposes of being qualified and added to an approved suppliers list. All approved suppliers are audited on a routine basis. Our Supplier Management procedure describes the detailed process for qualifying and managing suppliers which includes quality agreements, supply agreements, due diligence activities, and audits. 7.1Manufacturing Safe Products Given the current scale of our operations, certain business functions including manufacturing are outsourced to third-party providers. Mesoblast has established a strategic alliance with Lonza, a global leader in biopharmaceutical 53 Table of Contents manufacturing. Performance and compliance of Lonza and other third-party providers are monitored through our vendor assurance program. In addition, all entities involved in the preparation of therapeutics for clinical studies or commercial sale, are subject to extensive external regulation. Components of a finished therapeutic product approved for commercial sale or used in late-stage clinical studies must be manufactured in accordance with current international Good Manufacturing Practice (“GMP”) and other international regulatory requirements. These regulations govern manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Mesoblast, our collaborators, and our suppliers as appropriate must supply all necessary documentation in support of any application for product approval and must adhere to current GLP and current GMP regulations enforced by the FDA and other regulators through their facilities inspection program. Before we can begin commercial manufacture of our products for sale in the United States, we must obtain FDA regulatory approval for the product. In addition, the processes and quality systems associated with the manufacturing of such product must also be approved, which requires a successful FDA inspection of the manufacturing facilities, including Lonza’s manufacturing facilities. As part of the FDA’s approval of Ryoncil®, the agency conducted a Pre-License Inspection (PLI) of the manufacturing process for Ryoncil®. The inspection did not result in the issuance of a Form 483, which must be provided at the conclusion of an inspection if investigators have observed any conditions that in their judgment may constitute violations of the Food Drug and Cosmetic Act and related Acts. In addition, regulatory authorities may audit or inspect at any time manufacturing facilities involved with the preparation of our product candidates, raw materials, or the associated quality systems. While Mesoblast does not directly control the manufacturing process of its contract manufacturers, and relies on these partners to comply with the regulatory requirements, we maintain oversight through our vendor assurance program. As part of this program Mesoblast monitors the performance and conduct annual audits of each contract manufacturer involved in the production of our product candidates. Lonza as a strategic manufacturing partner is monitored through an established governance structure with multiple feedback loops to ensure compliance to established contracts, specifications, and policies. In addition to maintaining staff onsite and personnel in the plant to oversee ongoing activities, Mesoblast and Lonza regularly review a range of manufacturing, quality and operational metrics to ensure consistent product manufacture, compliance and reliable product supply. Through these oversight and governance processes, Mesoblast seeks to maintain high standards of manufacturing quality and compliance while supporting patient safety and the integrity of its products. 7.2Bone Marrow The initial stage of manufacturing involves obtaining mesenchymal lineage cell-containing bone marrow from healthy consenting donors. The process of identifying new donor tissue, testing and verifying its validity in order to create new cell banks is tightly regulated and validated with the FDA and other regulators. For example, U.S. federal and state governments and other jurisdictions impose restrictions on the acquisition and use of tissue, including those incorporated in federal Good Tissue Practice regulations. Our manufacturing partner Lonza also has a dedicated U.S. facility for bone marrow acquisition. Lonza maintains all documents and records generated during the lifecycle of donor screening and bone marrow aspiration in a donor-specific file under its site quality system. 7.3Storage and Distribution Storage and distribution of our product candidates are contracted to Integrated Commercialization Solutions (ICS), CryoSite, and CryoPort Solutions who are experts in innovative storage and/or distribution solutions for pharmaceutical manufacturers. Performance is monitored through established contractual agreements, and the interactions of our joint project teams, as well as through regular supplier audits and qualifications. 8.Access to Healthcare In December 2024, FDA approved Ryoncil® (remestemcel-L-rknd) in the treatment of children 2 months and older with SR-aGVHD. We acknowledge and support the social importance of providing access to healthcare across all geographic regions, regardless of socio-economic status and recognize this is frequently regarded as one of the top ESG topics for the Biopharma sector. Treatment for rare conditions such as pediatric SR-aGvHD comes with unique challenges, and the path to access varies in each region. Following this first approval in the U.S., we are exploring partnerships that can facilitate paths to care, taking into account our current size, financial status, and early stage of commercializing Ryoncil®. 54 Table of Contents In the United States, coverage for Ryoncil® continues to expand with over 280 million US lives insured by commercial and government payers. Federal Medicaid coverage by Centers for Medicare and Medicaid (CMS) is in place and mandatory fee-for-service Medicaid coverage for Ryoncil® became effective July 1, 2025 in all U.S. states. To assist patients and institutions, Mesoblast has established MyMesoblast™, a comprehensive, single-source support hub designed to help treatment centers and families successfully navigate the Ryoncil® treatment journey. From early treatment consideration to investigating insurance coverage and addressing affordability concerns, MyMesoblast™ provides personalized support every step of the way, so patients can focus on what matters most. Help with insurance navigation and benefit verification: •Enrollment in co-pay assistance and patient assistance programs •Financial support for eligible patients •Support transitioning patients from inpatient to outpatient treatment and reimbursement •Logistics, Shipping and Delivery coordination with transplant centers •Coordination with Specialty Pharmacy on request Mesoblast’s Patient Assistance Program is designed to support equitable access to our therapies for eligible commercial patients who may face financial barriers to treatment. The program offers financial assistance or free product to patients who meet defined criteria, particularly for patients without insurance or underinsured or out-of-pocket costs are prohibitive. This initiative reflects our commitment to patient care and access, ensuring that financial hardship does not prevent eligible individuals from receiving potentially life-saving therapies. 8.1Expanded Access Programs Prior to FDA approval, Mesoblast made remestemcel-L available to children, under a compassionate use protocol in the U.S. as ‘salvage therapy’ where all other treatment avenues have been exhausted and the risk of mortality is high. More than 250 children received remestemcel-L under these circumstances, provided by us at no cost. Following approval of Ryoncil® in the U.S. by FDA for children 2 months and older, we have received requests from HCPs caring for adult patients with SR-aGvHD despite the utilization of other treatment avenues, including the only approved agent for adults. Since approval, Mesoblast has provided access to adult patients seeking treatment for SR-aGvHD under FDA’s emergency IND pathway that allows a physician to request access to an unapproved drug for a single patient in a life-threatening situation. 8.2Product Pricing In the United States, federal and state government agencies may purchase Mesoblast products and provide reimbursement through public healthcare programs such as Medicare, Medicaid, 340B, Veterans Administration, and Federal Supply Schedule Pricing programs. Under various federal laws and government contracting requirements, these purchasers and reimbursing entities are entitled to discounts, rebates, or other price concessions on eligible products to enhance access to Ryoncil® to patients participating in government sponsored programs. Mesoblast is committed to full compliance with all applicable federal and state pricing and reporting obligations. This includes accurately reflecting all elements that may impact pricing—such as discounts, rebates, up-front payments, coupons, goods-in-kind, free or reduced-price services, grants, or other price concessions that may be considered inducements to purchase. We ensure that these factors are properly accounted for in our price reporting and government submissions, in accordance with all relevant regulations. 9.Environment Mesoblast is committed to protecting the environment and minimizing the impact of its operations. We continue to aim in minimizing our impact on the wider environment and its component parts. As a company with 108 employees operating primarily from office and laboratory facilities, our direct environmental footprint is currently limited. Nonetheless, we continue to implement initiatives aimed at reducing our environmental impact, including sourcing our electricity from green energy providers and managing office waste recycling programs. In addition, as noted above, many 55 Table of Contents of our employees and consultants are dispersed and spend limited time in our office locations further reducing our operational footprint. We are also focused on improving sustainability of our manufacturing processes through our investment in research and development that focuses on the scaling of technologies and minimizing waste. We are developing a 3D bioreactor process to expand our cell product which will replace our current 2D process involving plates. This will reduce the amount of plastic and bio-hazardous waste that will be generated by our manufacturing processes. As elements of our operations rely on third-party providers, we work with our partners to comply with environmental laws and regulations, including those relating to the discharge of materials into the air, water and ground, the manufacture, storage, handling, use, transportation and disposal of hazardous and biological materials, and the health, wellbeing and safety of employees with respect to laboratory activities required for the development of products and technologies. 4.B Business Overview Mesoblast is a commercial-stage biotechnology company and a world leader in developing allogeneic (off-the-shelf) cellular medicines for the treatment of severe and life-threatening inflammatory conditions. The therapies from our proprietary mesenchymal lineage cell therapy technology platform respond to severe inflammation by releasing anti-inflammatory factors that counter and modulate multiple effector arms of the immune system, resulting in significant reduction of the damaging inflammatory process. Mesoblast received FDA approval in December 2024 for Ryoncil® (remestemcel-L-rknd) for the treatment of SR-aGvHD in pediatric patients 2 months and older, including adolescents and teenagers. Ryoncil® is the first mesenchymal stromal cell ("MSC") product approved by FDA for any indication. Mesoblast is developing a range of late-stage product candidates, derived from our first and second generation proprietary mesenchymal lineage cell therapy technology platforms therapies for distinct indications. Ryoncil® is being developed for additional inflammatory diseases with high unmet need in children and adults including SR-aGvHD in adults, Duchenne Muscular Dystrophy ("DMD"), and biologic-resistant inflammatory bowel disease. Rexlemestrocel-L is being developed for heart failure and chronic low back pain. Ryoncil® (remestemcel-L-rknd) is our first-generation MSC product platform and is FDA approved and commercialized for treatment of children 2 months and older with SR-aGHVD. In addition, Mesoblast has a label expansion strategy for Ryoncil® for treatment of other systemic inflammatory diseases including: •Steroid refractory acute graft versus host disease in adults; •Duchenne muscular dystrophy; and •Biologic refractory inflammatory bowel disease, including ulcerative colitis and Crohn's disease. Rexlemestrocel-L is our second generation mesenchymal lineage precursor cell product platform and is in late stage development for treatment of: •Chronic low back pain (CLBP) due to degenerative disc disease; and •Chronic heart failure (CHF). Both platforms have life cycle management strategies with promising emerging pipelines. The Company’s proprietary manufacturing processes yield industrial-scale, cryopreserved, off-the-shelf, cellular medicines. These cell therapies, with defined pharmaceutical release criteria, are planned to be readily available to patients worldwide upon receiving marketing authorizations. Mesoblast’s immuno-selected, culture expanded cellular medicines are based on mesenchymal precursor cells (“MPCs”) and their progeny, MSCs. These are rare cells (approximately 1:100,000 in bone marrow) found around blood vessels that are central to blood vessel maintenance, repair and regeneration. These cells have a unique immunological profile with immunomodulatory effects that reduce inflammation allowing healing and repair. This mechanism of action enables the targeting of multiple disease pathways across a wide spectrum of complex diseases with significant unmet medical needs. 56 Table of Contents Mesenchymal lineage cells are collected from the bone marrow of healthy adult donors and proprietary processes are utilized to expand them to a uniform, well characterized, and highly reproducible cell population. This enables manufacturing at industrial scale for commercial purposes. Another key feature of Mesoblast’s cells is they can be administered to patients without the need for donor–recipient matching or recipient immune suppression. Mesoblast’s approach to product development is to ensure rigorous scientific investigations are performed with well-characterized cell populations in order to understand mechanisms of action for each potential indication. Extensive preclinical translational studies guide clinical trials that are structured to meet stringent safety and efficacy criteria set by international regulatory agencies. All trials are conducted under the continuing review of independent Data Safety Monitoring Boards comprised of independent medical experts and statisticians. These safeguards are intended to ensure the integrity and reproducibility of results, and to ensure that outcomes observed are scientifically reliable. Allogeneic, Off-the-Shelf, Commercially Scalable Products Our technology platform enables development of a diverse range of products derived from the mesenchymal cell lineage in adult tissues. MPCs constitute the earliest known cell type in the mesenchymal lineage in-vivo. MPCs can be isolated using monoclonal antibodies and culture-expanded using methods that enable efficient expansion without differentiation. MSCs are defined biologically in culture following density gradient separation from other tissue cell types and following culture by plastic adherence. MSCs presumably represent culture-expanded in-vitro progeny of the undifferentiated MPCs present in-vivo. The functional characteristics of each cell type enable product development for specific indications. Our proprietary mesenchymal lineage cell-based products have distinct biological characteristics enabling their use for allogeneic purposes. Immune Privilege: Mesenchymal lineage cells are immune privileged, in that they do not express specific cell surface co-stimulatory molecules that initiate immune allogeneic responses. Expansion: We have developed proprietary methods that enable the large-scale expansion of our cells while maintaining their ability to produce the key biomolecules associated with tissue health and repair. This allows us to produce a cellular product intended to demonstrate consistent and well-defined characterization and activity. Commercial Products Ryoncil® Ryoncil® (remestemcel-L-rknd) is an allogeneic bone marrow-derived mesenchymal stromal cell (MSC) therapy. Ryoncil® was approved by the FDA on December 18, 2024 as the first MSC therapy in the United States. Ryoncil® is the only MSC therapy approved in the U.S. for any indication, and the only approved therapy for steroid-refractory acute graft versus host disease (SR-aGvHD) in children 2 months and older, including adolescents and teenagers. Annually in the United States approximately 10,000 patients undergo an allogeneic bone marrow transplant, 1,500 of whom are children. Approximately 50% develop aGvHD and almost half of those do not respond to steroids, the recognized first-line treatment. In a single-arm multi-center Phase 3 trial of children with SR-aGvHD, 89% of whom had high severity Grade C or Grade D disease, 70% achieved an overall response by Day 28 of treatment with Ryoncil®, a measure that predicts survival in aGvHD. Ryoncil® treatment was not discontinued or interrupted in any patient for any laboratory abnormality, and the full course was completed without interruption in more than 85% of patients. The full Phase 3 clinical study results are available in Biology of Blood and Marrow Transplantation. The recommended dosage of Ryoncil® for treatment of pediatric SR-aGvHD is 2×106 MSC/kg body weight per intravenous infusion given twice per week for 4 consecutive weeks. U.S. Commercial Launch We have established a commercial organization starting in 2025 focused on promoting Ryoncil® to physicians at U.S. transplant centers. Our commercial team of approximately ten sales representatives and managers, a medical affairs team including three medical science liaisons, payor access specialists, and supporting staff is structured around targeting 64 priority transplant centers that account for more than 90% of U.S. pediatric transplants. Ryoncil® became available for 57 Table of Contents purchase in the U.S. on March 27, 2025. Since commercial launch, Mesoblast has onboarded more than 50 of these U.S. transplant centers. Coverage for Ryoncil® by commercial and government payers extends to approximately 280 million lives with Federal Medicaid coverage by US Centers for Medicare and Medicaid ("CMS") in place and mandatory fee-for-service Medicaid coverage in all US states. The Company has entered into the National Drug Rebate Agreement with Medicaid and on October 1, 2025, was issued a specific Healthcare Common Procedure Coding System (HCPCS) J-Code by CMS. To assist patients and institutions with insurance coverage, financial assistance, and access programs, ensuring that no patient is left behind in receiving this potentially life-saving therapy, Mesoblast has established a patient access hub termed MyMesoblast™, where Ryoncil® is now available for ordering. Additional information is available on ryoncil.com, where valuable resources for healthcare providers, patients and caregivers can be found. We utilize third-party companies for logistics to store and distribute our products, including a specialty pharmacy option, to provide patient access services, and to assist with our commercial activities. Additionally, we use third-party vendors, such as advertising agencies, suppliers of marketing and other sales support-related services, patient and health care provider support, and payer engagement. Competition Ryoncil® received seven years of orphan-drug exclusive approval from FDA for treatment of SR-aGvHD in pediatric patients 2 months of age and older. This period of statutory exclusivity means that the FDA will not approve another MSC product for this indication during the 7-year period from the approval of Ryoncil®. Separately, Mesoblast has biologic exclusivity preventing another sponsor from referencing the Ryoncil® biologic license application (BLA) until December 2036, twelve years from its first approval which would prevent market entry by a biosimilar. These statutory exclusivities are in addition to Mesoblast’s strong U.S. intellectual property position on MSC composition of matter, manufacturing and indications, including SR-aGvHD, that provide a commercial barrier to entry against competitors through 2044 Prior to the FDA approval of Ryoncil® there were no FDA approved therapies for pediatric patients 2 months and older with steroid-refractory acute GvHD. The only other FDA approved agent for SR-aGvHD is ruxolitinib, which is approved in patients 12 years and older. Ryoncil® Lifecycle Extension in Pediatric & Adult Inflammatory Diseases For adult patients with severe SR-aGvHD, Mesoblast is collaborating with Blood and Marrow Transplant Clinical Trials Network (BMT CTN) in the US, a body that is funded by the National Institutes of Health (NIH) and is responsible for approximately 80% of all US allogeneic BMTs, to conduct a pivotal trial. Survival in adults with SR-aGvHD who have failed at least one additional agent, such as ruxolitinib, remains as low as 20-30% by 100 days. In contrast, 100-day survival was 73% after Ryoncil® treatment was used under expanded access in 25 adults with SR-aGvHD who failed to respond to at least one additional agent, such as ruxolitinib. Duchenne muscular dystrophy affects approximately 15,000 children in the U.S alone. FDA has granted Mesoblast Investigational New Drug (IND) clearance to directly proceed for a registrational clinical trial evaluating Ryoncil® (remestemcel-L-rknd) in DMD. Inflammatory bowel disease (IBD), including ulcerative colitis (UC) and Crohn’s disease (CD), remains a major unmet need across the adult and pediatric population where early and durable remission remains especially challenging. In the U.S. more than three million people have inflammatory bowel disease, with approximately 38,000 new cases of ulcerative colitis and 33,000 new cases of Crohn’s disease diagnosed every year. A pilot study in adults demonstrated positive outcomes (rapid mucosal healing and disease remission) in biologic refractory patients receiving Ryoncil® by direct endoscopic injection to areas of inflammation. This extends Mesoblast data 58 Table of Contents showing that intravenously delivered remestemcel-L can induce early remission in CD adults who have failed a single anti-TNF agent. Given the effectiveness of Ryoncil® in treating children with gastrointestinal-related (GI) SR-aGvHD, and the existing data on adult CD, Mesoblast plans to further evaluate the immunomodulatory effects of Ryoncil® on GI inflammation in treating medically-refractory IBD patients. For this and other indications, Mesoblast is evaluating its mesenchymal lineage cells to express chimeric antigen receptor (“CAR”) constructs aiming to further boost the effectiveness of its products. CAR-MSCs offer substantially enhanced targeting and potency compared to existing unmodified mesenchymal lineage cells, allowing for potentially better patient outcomes, broader options for targeted diseases, and lower cost of goods. The most advanced product being developed by Mesoblast with this technology is E-cadherin-targeted chimeric antigen receptor mesenchymal stromal cells ("ECAD-CAR-MSC"), which express a molecule on the surface that binds to e-cadherin, a protein expressed on inflamed gut tissue. ECAD-CAR-MSC has been shown to be superior to unmodified cells in reducing inflammation of the gut tissue in animal models, providing great promise for the treatment of ulcerative colitis or Crohn's disease. Products Commercialized by Licensees Two allogeneic mesenchymal stromal cell (MSC) products developed and commercialized by Mesoblast licensees have been approved in Japan and Europe, with both licensees the first to receive full regulatory approval for an allogeneic cellular medicine in these major markets. Mesoblast’s licensee in Japan, JCR Pharmaceuticals Co. Ltd. (“JCR”), is marketing its MSC-based product in Japan for the treatment of aGvHD in children and adults. TEMCELL® HS Inj. (“TEMCELL”) was the first allogeneic cellular medicine to receive full regulatory approval in Japan. Mesoblast receives royalty income on sales of TEMCELL® in Japan. Mesoblast Product Candidates 59 Table of Contents Ryoncil® (remestemcel-L-rknd) for Steroid Refractory Acute Graft Versus Host Disease in Adults Overview Ryoncil® is an intravenously delivered product for the treatment of steroid-refractory acute graft versus host disease, or SR-aGvHD, following an allogeneic bone marrow transplant (“BMT”). Ryoncil® is approved by FDA in children 2 months and older, including adolescents and teenagers. In a bone marrow transplant, donor cells can attack the recipient, causing acute GvHD. The donor T-cell mediated inflammatory response involves secretion of TNF-alpha and IFN-gamma, resulting in activation of pro-inflammatory T-cells and tissue damage in the skin, gut and liver, which can be fatal. Ryoncil® is suggested to have immunomodulatory properties to counteract the cytokine storm that is implicated in various inflammatory conditions. The mechanism of action is thought to involve down-regulating the production of pro-inflammatory cytokines, increasing production of anti-inflammatory cytokines, and enabling recruitment of naturally occurring anti-inflammatory cells to involved tissues. This life-threatening disease occurs in approximately 50% of patients who receive an allogeneic BMT. Over 30,000 patients worldwide undergo an allogeneic BMT annually, primarily during treatment for blood cancers, and these numbers are increasing. In patients with the most severe form of SR-aGvHD (Grade C/D or III/IV) mortality can be as high as 70-90% despite optimal best available therapy. For adults with SR-aGvHD, the only approved agent is ruxolitinib which is approved in patients 12 years and older. Survival in adults with SR-aGvHD who have failed at least one additional agent, such as ruxolitinib, remains as low as 20-30% by 100 days. In contrast, 100-day survival was 73% after Ryoncil® treatment was used under expanded access in 25 adolescents and adults with SR-aGvHD who failed to respond to at least one additional agent, such as ruxolitinib. Current Status and Anticipated Milestones Mesoblast has commenced a targeted, controlled registrational study in 180 Grade III/IV SR-aGvHD second-line adults randomized to Ryoncil® + ruxolitinib versus ruxolitinib alone. The strategy to gain a label extension for Ryoncil® as part of the second-line treatment regimen in adults with severe SR-aGvHD, a population approximately three times the size of the pediatric SR-aGvHD population. This adult study is in line with our overall commercial strategy, with a sequenced progression from pediatric to adult SR-aGvHD indications. Mesoblast is collaborating with Blood and Marrow Transplant Clinical Trials Network (BMT CTN) in the US, a body that is funded by the National Institutes of Health (NIH) and is responsible for approximately 80% of all US allogeneic BMTs, to conduct a pivotal trial in adults with SR-aGvHD. We have commercialized Ryoncil® in the US for treatment of pediatric SR-aGvHD and believe our existing sales force will be an appropriate foundation for the US adult SR-aGvHD market. The target call point for SR-aGvHD will primarily be physicians in hematology/oncology who perform hematopoietic stem cell transplants. In the US, there are approximately 80 centers that perform pediatric transplants, with 50% of all transplants occurring at approximately 15 centers. Similarly, there are approximately 110 centers that perform adult transplants with half of those transplants occurring at approximately 20 centers. There is a substantial cross-over between these centers for adults and children. The Company has put in place a lifecycle extension strategy to generate evidence-based clinical outcomes to maximize the value of remestemcel-L in other pediatric and adult rare diseases that do not require large distribution channels. In addition, we plan to expand investigator-initiated clinical trials for chronic GvHD and other indications that are currently underway or planned for the near future. Ryoncil® for Duchenne muscular dystrophy (DMD) Overview Duchenne Muscular Dystrophy ("DMD") is an X-linked genetic disorder characterized by progressive muscle degeneration affecting the skeletal, respiratory, and cardiac muscles. It is caused by the absence of functional dystrophin, a key structural protein in muscle cells. DMD affects approximately 15,000 individuals in the United States and primarily impacts boys. Over time, deterioration of the muscle leads to loss of ambulation, respiratory failure and cardiomyopathy ultimately leading to death by the third decade. 60 Table of Contents Current Status In 2026, the US FDA granted Mesoblast Investigational New Drug (IND) clearance to directly proceed for a registrational clinical trial evaluating Ryoncil® (remestemcel-L-rknd) in DMD. Mesoblast is planning a trial randomizing 76 patients aged 5 to 9 years to either Ryoncil® (7 infusions of 2 x 106 cells/kg over 12 months) or placebo, on top of standard of care. The trial’s primary endpoint will be time-to-stand at nine months, a validated FDA endpoint for approval. Ryoncil® for Inflammatory Bowel Disease (IBD) – Ulcerative Colitis (UC) and Crohn’s Colitis Overview According to recent estimates, more than three million people (1.3%) in the United States alone have inflammatory bowel disease, with more than 33,000 new cases of Crohn’s disease and 38,000 new cases of ulcerative colitis diagnosed every year. Despite recent advances, approximately 30% of patients are primarily unresponsive to anti-TNFα agents and even among responders, up to 10% will lose their response to the drug every year. Up to 80% of patients with medically refractory Crohn’s disease eventually require surgical treatment of their disease, which can have a devastating impact on quality of life. Current Status A small investigator-initiated randomized, controlled study of Ryoncil® delivered by an endoscope directly to the areas of inflammation and tissue injury with medically refractory Crohn’s disease and ulcerative colitis was undertaken at Cleveland Clinic. The study is the first in humans using local cell delivery in the gut and will enable Mesoblast to compare clinical outcomes using this delivery method with results from an ongoing randomized, placebo-controlled trial in patients with biologic-refractory Crohn’s disease where remestemcel-L was administered intravenously. Results from the randomized, controlled study of Ryoncil® by direct endoscopic delivery to areas of inflammation in patients with medically refractory Crohn’s colitis were published in the peer-reviewed journal British Journal of Surgery. Strategically, Mesoblast views UC and Crohn’s colitis as a potentially important label extension for Ryoncil® given the gastrointestinal involvement common to acute graft versus host disease and inflammatory bowel disease. Gastrointestinal damage is the major driver of aGvHD mortality and is linked to systemic inflammation in aGvHD. Biomarkers that predict high mortality in aGvHD, such as blood levels of soluble suppression of tumorigenicity 2 (ST2) have shown to be significantly reduced in patients treated with remestemcel-L. ST2 has also been shown to be associated with active IBD (UC & Crohn’s). For this and other indications, Mesoblast is evaluating its mesenchymal lineage cells to express chimeric antigen receptor (“CAR”) constructs aiming to further boost the effectiveness of its products. CAR-MSCs offer substantially enhanced targeting and potency compared to existing unmodified mesenchymal lineage cells, allowing for potentially better patient outcomes, broader options for targeted diseases, and lower cost of goods. The most advanced product being developed by Mesoblast with this technology is E-cadherin-targeted chimeric antigen receptor mesenchymal stromal cells ("ECAD-CAR-MSC"), which express a molecule on the surface that binds to e-cadherin, a protein expressed on inflamed gut tissue. ECAD-CAR-MSC has been shown to be superior to unmodified cells in reducing inflammation of the gut tissue in animal models, providing great promise for the treatment of ulcerative colitis or Crohn's disease. Rexlemestrocel-L for Chronic Low Back Pain (CLBP) associated with Degenerative Disc Disease (DDD) Overview Rexlemestrocel-L (MPC-06-ID) for CLBP consists of a unit dose of 6 million MPCs administered by syringe directly into a damaged disc. In CLBP, damage to the disc is the result of a combination of factors related to aging, genetics, and micro-injuries, which compromises the disc’s capacity to act as a fluid-filled cushion between vertebrae and to provide anatomical stability. Damage to the disc also results in an inflammatory response with ingrowth of nerves which results in chronic pain. This combination of anatomic instability and nerve ingrowth results in CLBP and functional disability. 61 Table of Contents With respect to mechanisms of action in CLBP, extensive pre-clinical studies have established that MLCs have anti-inflammatory effects and secrete multiple paracrine factors that stimulate new proteoglycan and collagen synthesis by chondrocytes in vitro and by resident cells in the nucleus and annulus in vivo. It is estimated that over 7 million people in the U.S. alone suffer from CLBP associated with DDD, of which 3.2 million patients have moderate disease. This market is projected to have annual growth rate similar to that of the US population annual growth rate. After failure of conservative measures (medication, injections, physical therapy etc.), there is a need for non-opioid treatments that are effective over a sustained period of time. When disc degeneration has progressed to a point that pain and loss of function can no longer be managed by conservative means, major invasive surgery such as spinal fusion is the most commonly offered option. All non-surgical therapies for progressive, severe and debilitating pain due to degenerating intervertebral discs treat the symptoms of the disease. However, they do not address the underlying cause of the disease. Surgical intervention is not always successful in addressing the patient’s pain and functional deficit. It has been estimated that the incidence of failed back surgery is as high as 50% for standard procedures and may increase for more complex surgeries. Total costs of low back pain are estimated to be between $100.0 billion and $200.0 billion annually with two thirds attributed to patients’ decreased wages and productivity. As a result, we believe that the most significant unmet need and commercial opportunity in the treatment of CLBP is a therapy that treats the underlying cause of the disease to reduce pain, improve function, and quality of life. Current Status and Anticipated Milestones Mesoblast is undertaking a confirmatory Phase 3 trial at multiple sites across the United States of rexlemestrocel-L in patients with CLBP associated with degenerative disc disease, with pain of less than five years duration. The FDA has previously confirmed alignment with Mesoblast on the design of the 300-patient randomized, placebo/sham-controlled trial and the 12-month primary endpoint of pain reduction as an approvable indication. Key secondary measures include improvement in quality of life, function, and cessation of pain medication, including opioids. In August 2026, the trial completed patient treatment with 350 patients randomized and treated with either an intra-discal injection of rexlemestrocel-L or sham injection. Total patient numbers treated increased from 300 to 350 after strong demand from trial investigators to have their patients enrolled in the innovative program. The trial's primary endpoint is powered to show a significant difference in reduction of low back pain at 12 months between rexlemestrocel-L and sham controls. Top-line results are expected in mid-CY2027 after the last treated patient has completed 12 months follow-up. In February 2023, FDA granted Regenerative Medicine Advanced Therapy ("RMAT") designation for rexlemestrocel-L in the treatment of CLBP associated with disc degeneration, in combination with HA as delivery agent for injection into the lumbar disc. RMAT designations aim to expedite the development of regenerative medicine therapies intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition where preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for the disease or condition. An RMAT designation for rexlemestrocel-L provides all the benefits of Breakthrough and Fast Track designations, including rolling review and eligibility for priority review on filing of a BLA. The first Phase 3 clinical trial for CLBP completed enrollment in March 2018 with 404 patients enrolled across 48 centers in the United States and Australia randomized 1:1:1 to receive either 6 million MPCs with hyaluronic acid (MPC+HA), 6 million MPCs without hyaluronic acid (MPC) or saline control. Although the trial's composite outcomes of pain reduction together with functional responses to treatment were not met by either MPC group; the MPC+HA treatment group achieved substantial and durable reductions in pain compared to control through 24 months across the entire evaluable study population (n=391) compared with saline controls. Greatest pain reduction was observed in the pre-specified population with CLBP of shorter duration than the study median of 68 months (n=194) and subjects using opioids at baseline (n=168) with the MPC+HA group having substantially greater reduction at all time points (1, 3, 6, 12, 18 and 24 months) compared with saline controls. There was no appreciable difference in the safety of MPC groups compared to saline control over the 24-month period of follow-up in the entire study population. In subjects using opioids at baseline, the MPC+HA demonstrated a reduction in the average opioid dose over 24 months, while saline control subjects had essentially no change. 62 Table of Contents Revascor® (rexlemestrocel-L) for Chronic Heart Failure with Reduced Ejection Fraction (HFrEF) Overview Mesoblast is developing Revascor® to fill the treatment gap for chronic heart failure (CHF). Patients with CHF continue to represent high unmet medical need despite recent advances in new therapeutic agents for chronic heart failure. The American Heart Association (AHA) estimated in 2017 that prevalence is expected to grow 46% by 2030 in the U.S., affecting more than 8 million Americans. CHF causes severe economic, social, and personal costs. In the U.S., it is estimated that CHF results in direct costs of $60.2 billion annually when identified as a primary diagnosis and $115.0 billion as part of a disease milieu. Mesoblast believes that targeting high-risk chronic patients with the highest unmet clinical needs provides the company with the most efficient path to market. Revascor® (rexlemestrocel-L) for HFrEF consists of 150 million mesenchymal precursor cells (MPCs) administered by direct cardiac injection. MPCs release a range of factors when triggered by specific receptor-ligand interactions within damaged tissue. Based on preclinical data, we believe that the factors released from the MPCs induce functional cardiac recovery by simultaneous activation of multiple pathways, including induction of endogenous vascular network formation, reduction in harmful inflammation, reduction in cardiac fibrosis, and reversal of endothelial dysfunction through activation of intrinsic tissue precursors. CHF is classified in relation to the severity of the symptoms experienced by the patient. The most commonly used classification system for functional severity of heart failure, established by the New York Heart Association ("NYHA"), is: •Class I (mild): patients experience none or very mild symptoms with ordinary physical activity •Class II (mild/moderate): patients experience fatigue and shortness of breath during moderate physical activity •Class III (moderate/severe): patients experience shortness of breath during even light physical activity •Class IV or end-stage (severe): patients are exhausted even at rest Risk for recurrent heart failure-related hospitalizations, occurrence of non-fatal myocardial infarction (MI, heart attack) or non-fatal stroke, or death increases progressively with increases in left ventricular volumes, reduction in left ventricular ejection fraction (LVEF), and progression in NYHA functional class. Approximately 50% of all CHF patients have heart failure with reduced ejection fraction (HFrEF) defined as LVEF <40%, and are at considerable risk of repeated hospitalizations and death despite maximal drug therapy. Program in End Stage Heart Failure Patients Requiring Mechanical Support Revascor® is being evaluated in patients with end-stage HFrEF implanted with a left ventricular assist device (“LVAD”). Every year in the United States over 100,000 patients progress to end-stage HFrEF. In these patients, more than 2,500 life prolonging LVADs are implanted in the U.S. annually, of whom approximately 80% undergo the procedure as destination or permanent therapy. Most patients receiving LVADs as destination therapy have an ischemic HFrEF etiology. Compared to patients with non-ischemic HFrEF, patients with ischemic HFrEF have a 76% lower likelihood of LV functional recovery following LVAD implantation, and increased mortality over the initial 1-2 years. Resistance to functional recovery in ischemic HFrEF patients is thought to be due to excessive inflammation and microvascular insufficiency in the ischemic myocardium. A Phase 2 trial was conducted by a multi-center team of researchers within the United States National Institutes of Health (“NIH”)-funded Cardiothoracic Surgical Trials Network (“CTSN”), led by Icahn School of Medicine at Mount Sinai, New York. The National Institute of Neurological Disorders and Stroke, and the Canadian Institutes for Health Research also supported this trial. Results of this Phase 2 trial were released in November 2018. The trial was a prospective, multi-center, double-blind, placebo controlled, 2:1 randomized (MPC to placebo), single-dose cohort trial to evaluate the safety and efficacy of injecting a dose of 150 million MPCs into the native myocardium of LVAD recipients. Patients with advanced CHF, implanted with an FDA-approved LVAD as bridge-to-transplant or destination therapy, were eligible to participate in the trial. All patients were followed until 12 months post randomization. Across the 159 patients in this Phase 2 trial, the trial did not show a significant difference in the ability for patients to tolerate a wean for a period of 60 minutes. In the, 70 patients with end-stage ischemic HFrEF the key findings were: 63 Table of Contents •Ischemic controls were characterized by persistently elevated levels of the inflammatory cytokine IL-6, by reduced ability to be weaned from LVAD support, and by high mortality. •In contrast, in ischemic patients treated with rexlemestrocel-L, IL-6 levels returned to normal by 2 months and remained low through 12 months. •63% of ischemic patients who received a single administration of rexlemestrocel-L successfully underwent temporary weaning from full LVAD support as early as month 2 as compared with 36% of controls (p = 0.008). •The cumulative incidence of successful temporary weans off the LVAD device over 6 months was also increased by 1.55-fold over control in ischemic patients who received rexlemestrocel-L ([95% CI 1.01, 2.36]; p=0.02). •Only 4.9% of ischemic patients treated with a single administration of rexlemestrocel-L died from month 2 through month 12, as compared with 26.9% of ischemic controls, an 82% reduction (p = 0.02). Current Status and Anticipated Milestones In November 2024 a publication in the prestigious peer-reviewed European Journal of Heart Failure (EJHF) reported that a single intramyocardial injection of Revascor® results in improved survival in high-risk NYHA Class II/III patients with ischemic heart failure and inflammation. This identifies the HFrEF population that is responsive to Revascor® and will be the target of a confirmatory trial. In June 2025, Mesoblast held a Type B meeting with FDA under its RMAT designation for Revascor® to discuss components of filing for a potential accelerated approval of a Biologics License Application (BLA) for ischemic HFrEF. There was alignment with FDA on items regarding chemistry, manufacturing & controls (CMC), potency assays for commercial product release, and proposed design and primary endpoint for the confirmatory trial post-approval. Rexlemestrocel-L also has regenerative medicine advanced therapy (RMAT) designation from the FDA for treatment of chronic heart failure with left ventricular systolic dysfunction in end stage HFrEF patients with an LVAD. In this patient population, Mesoblast has generated new data showing that a single administration of rexlemestrocel-L at the time of open heart surgery and device implantation to support the left ventricle in end-stage patients with HFrEF, reduces right heart failure hospitalizations, mortality from right heart failure, and portal hypertension with major bleeding events. With these new data, an existing Orphan Drug designation for treating this group of patients, and FDA’s stated preference for randomized controlled trials, Mesoblast is moving from filing for accelerated approval to filing for full FDA approval. Mesoblast has now received a Biologics License Application (BLA) filing number from FDA and has requested a modular review of its BLA for rexlemestrocel-L in prevention of life-threatening gastrointestinal bleeding due to right ventricular dysfunction in end-stage heart failure patients with a left ventricular assist device LVAD. Program for Class II/III CHF patients A multicenter, double-blinded, 1:1 randomized, sham-procedure-controlled Phase 3 study of remestemcel-L was completed across North America with 565 NYHA Class II/III patients at high risk of repeated heart failure hospitalizations or a terminal cardiac event (cardiac death, LVAD placement, heart transplant or insertion of an artificial heart). The enrollment criteria for this trial included a prior decompensated heart failure event (e.g. hospitalization) within the previous nine months and/or very high level of NT-proBNP, a protein used in diagnosis and screening of CHF. These inclusion criteria were designed for enrichment in patients with substantial left ventricular contractile abnormality, advanced CHF due to left ventricular systolic dysfunction and higher risk of recurrent decompensated heart failure hospitalizations and TCEs. This target patient population was shown to respond effectively to treatment with rexlemestrocel-L in our previous Phase 2 trial. Topline results from the 537 patients who met the criteria which allowed for treatment to occur on a 1:1 randomization basis between rexlemestrocel-L and sham control were announced in December 2021. Over a mean 30 months of follow-up, patients with advanced chronic heart failure who received a single endomyocardial treatment with rexlemestrocel-L on top of maximal therapies had 60% reduction in incidence of heart attacks or strokes and 60% reduction in death from cardiac causes when treated at an earlier stage in the progressive disease process. Despite significant reduction in the pre-specified endpoint of cardiac death, there was no reduction in study primary end point of recurrent non-fatal decompensated heart failure events, which was the trial’s primary endpoint. 64 Table of Contents The combination of the three pre-specified outcomes of cardiac death, heart attack or stroke into a single composite outcome - called the three-point major adverse cardiovascular event (MACE) is a well-established endpoint used by the FDA to determine cardiovascular risk. Rexlemestrocel-L reduced this three-point MACE by 30% compared to controls across the population of 537 patients. In the NYHA class II subgroup of 206 patients, rexlemestrocel-L reduced the three-point MACE by 55% compared to controls. DREAM-HF Phase 3 trial results were published in the premier peer-reviewed journal for cardiovascular medicine, the Journal of the American College of Cardiology (JACC) in February 2023. In November 2024 a publication in the prestigious peer-reviewed European Journal of Heart Failure (EJHF) reported that a single intramyocardial injection of Revascor® results in improved survival in high-risk NYHA Class II/III patients with ischemic heart failure and inflammation. Revascor® for Pediatric Congenital Heart Disease - Hypoplastic Left Heart Syndrome FDA has granted Revascor® both Rare Pediatric Disease Designation (RPDD) and Orphan-Drug Designation (ODD) for the treatment of hypoplastic left heart syndrome (HLHS), a condition responsible for up to 40% of all neonatal cardiac mortality. Results from a randomized, placebo-controlled prospective trial of Revascor® conducted in the United States in children with HLHS were published in the December 2023 issue of the peer reviewed The Journal of Thoracic and Cardiovascular Surgery Open (JTCVS Open). A single intramyocardial administration of Revascor® at the time of staged surgery resulted in the desired outcome of significantly larger increases in left ventricular (LV) end-systolic and end-diastolic volumes over 12 months compared with controls as measured by 3D echocardiography (p=0.009 & p=0.020 respectively). These changes are indicative of clinically important growth of the small left ventricle, facilitating the ability to have a successful surgical correction, known as full biventricular (BiV) conversion, which allows for a normal two ventricle circulation. Without full BiV conversion the right heart chamber is under excessive strain with increased risk of heart failure and death. FDA has also granted Revascor® a RMAT designation following submission of results from the randomized controlled trial in children with HLHS. On FDA approval of a BLA for Revascor® for the treatment of HLHS, if received, Mesoblast may be eligible to receive a Priority Review Voucher (PRV) that can be redeemed for any subsequent marketing application or may be sold or transferred to a third party. Complementary Technologies In addition to having the most mature and diverse allogeneic cell therapy product pipeline and technology platform in the field of cellular medicines, we have strategically targeted the acquisition of rights to technologies that are complementary to and synergistic with our mesenchymal lineage cell technology platform. The aim of this activity is to maintain our technology leadership position in the regenerative medicine space, while simultaneously expanding our targeted disease applications and managing the life-cycle of our current lead programs. Our complementary technologies and additional product candidates include other types of mesenchymal lineage cells, cell surface modification technologies, pay-loading technology and protein and gene technologies. Next Generation Technologies Mesoblast is expanding and diversifying its pipeline by developing products emanating from two next generation technology platforms: chimeric antigen receptor ("CAR") modified mesenchymal lineage cells ("CAR-MSCs") and oncolytic virus loaded mesenchymal lineage cells ("OV-MSCs"). Chimeric antigen receptor mesenchymal stromal cells (CAR-MSC) Mesoblast is genetically engineering its mesenchymal lineage cells to express chimeric antigen receptor constructs aiming to further boost the effectiveness of its products. More specifically, the engineered CAR-MSCs express a molecule on their surface that binds to a targeted antigen on diseased tissues. That binding not only enhances targeting of the cells, but when the cells bind to the targeted antigen, an 65 Table of Contents internal pathway in the cell is triggered in a manner that enhances its innate immunosuppressive and regenerative properties. In short, CAR-MSCs offer substantially enhanced targeting and potency compared to existing unmodified mesenchymal lineage cells, allowing for potentially better patient outcomes, broader options for targeted diseases, and lower cost of goods. The most advanced product being developed by Mesoblast with this technology is E-cadherin-targeted chimeric antigen receptor mesenchymal stromal cells ("ECAD-CAR-MSC"), which express a molecule on the surface that binds to e-cadherin, a protein expressed on inflamed gut tissue. ECAD-CAR-MSC has been shown to be superior to unmodified cells in reducing inflammation of the gut tissue in animal models, providing great promise for the treatment of ulcerative colitis or Crohn's disease. In addition, Mesoblast is advancing CD19-CAR-MSC, which has been engineered to express a molecule in the surface of the cells that binds to CD19, a protein expressed on rogue B cells in a variety of autoimmune diseases. The binding of CD19-CAR-MSC to rogue B cells suppresses the B cells’ damaging activity. Mesoblast is targeting the development of CD19-CAR-MSC to induce remission in Lupus Nephritis and other B cell autoimmune diseases where durable, effective and safe immunomodulation is highly desirable. This CAR-MSC technology is also protected by a broad patent estate that has been exclusively licensed to the Company by Mayo Clinic, where the foundational work on the technology was developed and published in Nature Biomedical Engineering: Mesenchymal stromal cells with chimaeric antigen receptors for enhanced immunosuppression. Oncolytic virus loaded mesenchymal stromal cells (OV-MSC) Mesoblast intends to develop oncologic therapies based on its Mesenchymal lineage stromal cells delivering highly potent Oncolytic Viruses (OV) systemically to distant tumors. Mesenchymal lineage stromal cells can cloak oncolytic viruses from rapid elimination by the immune system and can deliver them precisely to the sites of distant primary and metastatic tumors via tumor homing properties. To develop therapeutic cell-oncolytic virus combination products, Mesoblast has exclusively licensed a best-in-class oncolytic virus technology platform from Baylor College of Medicine (BCM). The lead oncolytic virus has been engineered to produce IL-12, which stimulates the immune system to attack tumor cells, a PD-L1 blocking antibody that unblinds the tumor from the human immune system, and a bispecific T cell engager (BITE) that binds to the targeted tumor and the patient’s own T cells for enhanced anti-cancer activity. In a first-in-man human trial, direct intra-tumoral injection of the oncolytic virus without the BITE resulted in five of seven patients achieving complete or partial responses at a dose that was one-hundredth of those of other oncolytic viruses. The inclusion of the BITE provides added potency by harnessing a patient's own T cells in a similar vein to in vivo CAR-T cell therapies. BCM researchers have already shown their oncolytic viruses can be effectively delivered intravenously by mesenchymal stromal cells to destroy lung tumors, and are currently working on IND-enabling studies to support Mesoblast's objectives in progressing to the clinic. Manufacturing and Supply Chain Our manufacturing strategy for our cellular product candidates focuses on the following important factors: (i)ability for product delineation to protect pricing and partner markets by creating distinct products using discrete manufacturing processes, culture conditions, formulations, routes of administration, and/or dose regimens; (ii)establishing proprietary commercial scale-up and supply to meet increasing demand; (iii)implementing efficiencies and yield improvement measures to reduce cost-of-goods; (iv)maintaining regulatory compliance with best practices; and (v)establishing and maintaining multiple manufacturing sites for product supply risk mitigation. The cell therapy manufacturing and distribution process generally involves five major steps: •Procure bone marrow—acquire bone marrow from healthy adults with specific FDA-defined criteria, which is accompanied by significant laboratory testing to establish the usability of the donated tissues. •Create master cell banks—isolate MLCs from the donated bone marrow and perform a preliminary expansion to create master cell banks. Each individual master cell bank comes from a single donor. 66 Table of Contents •Expand to therapeutic quantities—expand master cell banks to produce therapeutic quantities, a process that can yield thousands of doses per master cell bank, with the ultimate number depending on the dose for the respective product candidate being produced. •Formulate, package and cryopreserve. •Distribute—our cellular products are cryopreserved at the manufacturer and shipped to storage sites in the U.S. and other jurisdictions via cryoshippers. Those distribution centers then re-package and send the products on to treatment centers in cryoshippers. Treatment centers will either move the products into their own freezers or receive the cryoshipper in “real time” and the product stays in the cryoshipper until thawed for patient use within a well-defined window. We intend to continue utilizing this approach in the future. To date, our product candidates have been manufactured in two-dimensional, or 2D, planar, 10-layer cell factories, using media containing fetal bovine serum, or FBS. The relatively small patient numbers and orphan drug designation for remestemcel-L lead us to believe that 2D manufacturing will be adequate to meet demand for this product candidate. We also believe that 2D manufacturing process and facilities are commercially feasible for Phase 3 trial supply and the initial launch of MPC-06-ID for CLBP. However, to build up commercial supply for certain of our product candidates long-term, we are developing novel manufacturing processes using three-dimensional, or 3D, bioreactors with greater capacity to improve efficiency and yields, with resulting lower-cost of inventory. We intend to evaluate products produced in 3D bioreactors in pre-clinical and potentially clinical studies, which may serve as FDA required comparability studies to 2D if successful. We are also focusing on the introduction of FBS-free media which has the potential to result in efficiency and yield improvements to the current 2D process. We intend to conduct comparability studies to illustrate that products produced with this media are equivalent to those produced using FBS based media. While we remain confident in our ability to deliver successful outcomes from each of these activities, any unexpected issues or challenges faced in doing so could delay our programs or prevent us from continuing our programs. Our manufacturing activities to date have met stringent criteria set by international regulatory agencies, including the FDA. By using well-characterized cell populations, our manufacturing processes promote reproducibility and batch-to-batch consistency for our allogeneic cell product candidates. We have developed robust quality assurance procedures and lot release assays to support this reproducibility and consistency. Intellectual Property We have a large patent portfolio of issued and pending claims covering compositions of matter, uses for our mesenchymal lineage cell-based technologies and other proprietary regenerative product candidates and technologies, as well as for elements of our manufacturing processes. As of July 2026, the patent portfolio comprises approximately 1,163 patents and patent applications across 78 patent families, with protection which could extend through to at least 2045 in all major markets. One of our major objectives is to continue to protect and expand our extensive estate of patent rights and trade secrets, which we believe enables us to deliver commercial advantages and long-term protection for our product candidates based on our proprietary technologies, and support our corporate strategy to target large, mature and emerging healthcare markets for our exploratory therapeutic product candidates. More specifically, our patent estate includes issued patent and patent applications in major markets, including, but not limited to, the United States, Europe, Japan and China. The patents that we have obtained, and continue to apply for, cover mesenchymal lineage cell technologies and product candidates derived from these technologies, irrespective of the tissue source, including bone marrow, adipose, placenta, umbilical cord and dental pulp. These patents cover, among other technology areas, a variety of MLCs (including MPCs and MSCs), and the use of MLC for expansion of hematopoietic stem cells, or HSCs. Among the indication-specific issued or pending patents covering product candidates derived from our mesenchymal lineage cells are those which are directed to our Ryoncil®, for steroid-refractory pediatric aGvHD and lead product candidates: adult aGvHD, CLBP, CHF and chronic inflammatory conditions such as RA. We also have issued and pending patents covering other pipeline indications, including diabetic 67 Table of Contents kidney disease, inflammatory bowel disease (e.g., Crohn’s disease), neurologic diseases, eye diseases and additional orthopedic diseases. In addition, we have in-licensed patents covering complementary technologies, such as other types of mesenchymal lineage cells, pay-loading technology and protein and gene technologies, as part of our strategy to expand our targeted disease applications and manage the life-cycle of our current lead programs. Our patent portfolio also includes issued and pending coverage of proprietary manufacturing processes that are being used with our current two-dimensional manufacturing platform as well as the 3D bioreactor manufacturing processes currently under development. These cell manufacturing patents cover isolation, expansion, purification, scale up, culture conditions, aggregates minimization, cryopreservation, release testing and potency assays. In addition, we maintain as a trade secret, among other things, our proprietary FBS-free media used in our 3D bioreactor manufacturing processes. We maintain trade secrets covering a significant body of know-how and proprietary information relating to our core product candidates and technologies. We protect our confidential know-how and trade secrets in a number of ways, including requiring all employees and third parties that have access to our confidential information to sign non-disclosure agreements, limiting access to confidential information on a need-to-know basis, maintaining our confidential information on secure computers, and providing our contract manufacturers with certain key ingredients for our manufacturing process. In addition, in many major jurisdictions there are other means that may be available to us by which we would be able to extend the period during which we have commercial exclusivity for our product candidates, which include, but are not limited to the exclusive right to reference our data, orphan drug exclusivity and patent term extensions. As part of our strategy, we seek patent protection for our product candidates and technologies in major jurisdictions including the United States, Europe, Japan, China, and Australia and file independent and/or counterpart patents and patent applications in other jurisdictions globally that we deem appropriate under the circumstances, including India, Canada, Hong Kong, Korea and Singapore. As of July 2026, our patent portfolio includes the following patents and patent applications in the following major jurisdictions: 56 granted U.S. patents and 68 pending U.S. patent applications; 62 granted Japanese patents and 43 pending Japanese patent applications; 31 granted Chinese patents and 40 pending Chinese patent applications; 44 granted European patents and 49 pending European patent applications; and 52 granted Australian patents and 39 pending Australian patent applications. Our policy is to patent the technology, inventions and improvements that we consider important to the development of our business, only in those cases in which we believe that the costs of obtaining patent protection is justified by the commercial potential of the technology and associated product candidates, and typically only in those jurisdictions that we believe present significant commercial opportunities to us. In those cases where we choose neither to seek patent protection nor protect the inventions as trade secrets, we may publish the inventions so that it defensively becomes prior art in order for us to secure a freedom to operate position and to prevent third parties from patenting the invention. We also seek to protect as trade secrets our proprietary and confidential know-how and technologies that are either not patentable or where we deem it inadvisable to seek patent protection. To this end, we generally require all third parties with whom we share confidential information and our employees, consultants and advisors to enter into confidentiality agreements prohibiting the disclosure of confidential information. These agreements with our employees and consultants engaged in the development of our technologies require disclosure and assignment to us of the ideas, developments, discoveries and inventions, and associated intellectual property rights, important to our business. Additionally, these confidentiality agreements, among others, require that our employees, consultants and advisors do not bring to us, or use without proper authorization, any third party’s proprietary technology. License and Collaboration Agreements All of our revenue relates to upfront, royalty and milestone payments recognized under the license and collaboration agreements below. For further information on the categorical revenue breakdown during the last three fiscal years, see “Item 18. Financial Statements – Note 3”. Grünenthal arrangement In September 2019, Mesoblast entered into a strategic partnership with Grünenthal GmbH (Grünenthal) to develop and commercialize MPC-06-ID, the Company’s Phase 3 allogeneic cell therapy candidate for the treatment of chronic low back pain due to degenerative disc disease in patients who have exhausted conservative treatment options. The agreement 68 Table of Contents was amended by the parties in June 2021. Under the partnership, Grünenthal will have exclusive commercialization rights to MPC-06-ID for Europe and Latin America. Mesoblast may receive up to $112.5 million in upfront and milestone payments prior to product launch, inclusive of $17.5 million already received, if certain clinical and regulatory milestones are satisfied and reimbursement targets are achieved. Cumulative milestone payments could exceed $1.0 billion depending on the final outcome of Phase 3 studies and patient adoption. Mesoblast will also receive tiered double-digit royalties on product sales. There cannot be any assurance as to the total amount of future milestone and royalty payments that Mesoblast will receive nor when they will be received. JCR Pharmaceuticals Co., Ltd.—Hematological Malignancies and Hepatocytes Collaboration in Japan In October 2013, we acquired all of Osiris Therapeutics, Inc.’s business and assets related to culture expanded MSCs. These assets included assumption of a collaboration agreement with JCR (“JCR Agreement”), which will continue in existence until the later of 15 years from the first commercial sale of any product covered by the agreement and expiration of the last Osiris patent covering any such product. JCR is a research and development oriented pharmaceutical company in Japan. Under the JCR Agreement we assumed from Osiris, JCR has the right to develop our MSCs in two fields for the Japanese market: exclusive in conjunction with the treatment of hematological malignancies by the use of HSCs derived from peripheral blood, cord blood or bone marrow, or the First JCR Field; and non-exclusive for developing assays that use liver cells for non-clinical drug screening and evaluation, or the Second JCR Field. Under the JCR Agreement, JCR obtained rights in Japan to our MSCs, for the treatment of aGVHD. JCR also has a right of first negotiation to obtain rights to commercialize MSC-based products for additional orphan designations in Japan. We retain all rights to those products outside of Japan. JCR received full approval in September 2015 for its MSC-based product for the treatment of children and adults with aGVHD, TEMCELL. TEMCELL is the first culture-expanded allogeneic cell therapy product to be approved in Japan. It was launched in Japan in February 2016. Under the JCR Agreement, JCR is responsible for all development and manufacturing costs including sales and marketing expenses. With respect to the First JCR Field, we have received all sales milestone payments, a total of $3.0 million. Ongoing we are entitled to escalating double-digit royalties in the twenties. These royalties are subject to possible renegotiation downward in the event of competition from non-infringing products in Japan. With respect to the Second JCR Field, we are entitled to an approximately 50% profit share. Intellectual property is licensed both ways under the JCR Agreement, with JCR receiving exclusive and non-exclusive rights as described above from us and granting us non-exclusive, royalty-free rights (excluding in the First JCR Field and Second JCR Field in Japan) under the intellectual property arising out of JCR’s development or commercialization of MSC-based products licensed in Japan. JCR has the right to terminate the JCR Agreement for any reason, and we have a limited right to terminate the JCR Agreement, including a right to terminate in the event of an uncured material breach by JCR. In the event of a termination of the JCR Agreement other than for our breach, JCR must provide us with its owned product registrations and technical data related to MSC-based products licensed in Japan and all licenses of our intellectual property rights will revert to us. We expanded our partnership with JCR in Japan for two new indications: for wound healing in patients with EB in October 2018, and for neonatal hypoxic ischemic encephalopathy ("HIE"), a condition suffered by newborns who lack sufficient blood supply and oxygen to the brain, in June 2019. We will receive royalties on TEMCELL product sales for these licensed indications, if and when such indications receive marketing approval in Japan. We have the right to use all safety and efficacy data generated by JCR in Japan to support our development and commercialization plans for our MSC product candidate remestemcel-L in the United States and other major healthcare markets, including for GVHD, EB and HIE. Lonza—Manufacturing Collaboration In June 2025, we entered into a manufacturing services agreement, or MSA, with Lonza Biosciences Singapore Pte. Ltd. (Lonza), a global leader in biopharmaceutical manufacturing, and replaced our prior MSAs with Lonza and its 69 Table of Contents affiliates. Under the MSA, we pay Lonza on a fee for service basis to provide us with manufacturing and supply capabilities for our MPC and MSP products, including records preparation, process validation, quality control, quality assurance, manufacturing and other related services. We have agreed to order certain quantities of our clinical and commercial MPC products and MSC products from Lonza. One manufacturing suite in Lonza’s manufacturing facility has been exclusively reserved for manufacture of our MPC products, MSC products or cell banks for either MPC products or MSC products until at least July 1, 2027. We can trigger a process requiring Lonza to build out one or more additional suite(s) within its manufacturing facility to provide additional production capacity for such purposes. The MSA will expire on January 31, 2032, unless it is sooner terminated. We have the option of extending the MSA for two additional two-year periods. We may terminate the MSA with 18 months prior written notice, and Lonza may terminate with three years prior written notice. In the event additional manufacturing suite(s) are built out at the manufacturing facility, we may terminate the MSA for any additional suite on 18 months prior notice following a minimum of four years and six months after commencement of manufacturing in the suite of a MPC product, MSC product or cell bank for either MPC or MSC product. Either party may terminate the MSA for uncured, material breach of the other. Upon termination of the MSA due to Lonza’s breach or Lonza’s termination without cause, Lonza will execute a technology transfer to our affiliate, a third party manufacturer or to us, at our sole discretion, and at Lonza’s expense. We currently rely, and expect to continue to rely, on Lonza for the manufacture of our MSC products for commercial manufacture. Central Adelaide Local Health Network Incorporated—Mesenchymal Precursor Cell Intellectual Property In October 2004, we, through our wholly-owned subsidiary, Angioblast Systems Inc., now Mesoblast, Inc., acquired certain intellectual property relating to our MPCs, or Medvet IP, pursuant to an Intellectual Property Assignment Deed, or IP Deed, with Medvet Science Pty Ltd, or Medvet. Medvet’s rights under the IP Deed were transferred to Central Adelaide Local Health Network Incorporated, or CALHNI, in November 2011. In connection with our use of the Medvet IP, we are obligated to pay CALHNI, as successor in interest to Medvet, (i) certain aggregated milestone payments of up to $2.2 million and single-digit royalties on net sales of products covered by the Medvet IP, for cardiac muscle and blood vessel applications and bone and cartilage regeneration and repair applications, subject to minimum annual royalties beginning in the first year of commercial sale of those products and (ii) and single-digit royalties on net sales of the specified products for applications outside the specified fields. Additionally, we are obligated to pay CALHNI a double-digit percentage in the teens of any revenue that we receive in exchange for a grant of a sublicense to the Medvet IP in the specified fields. Under the IP Deed, we also granted to Medvet a non-exclusive, royalty-free license to the Medvet IP for non-commercial, internal research and academic research. Pursuant to the IP Deed, we were assigned the rights in three U.S. patents or patent applications (including all substitutions, continuations, continuations-in-part, divisional, supplementary protection certificates, renewals, all letters patent granted thereon, and all reissues, reexaminations, extensions, confirmations, revalidations, registrations and patents of addition and foreign equivalents thereof) and all future intellectual property rights, including improvements, that might arise from research conducted at CALHNI related to MPCs and methods of isolating, culturing and expanding MPCs and their use in any therapeutic area. We also acquired all related materials, information and know-how. Osiris Acquisition—Continuing Obligations In October 2013, we and Osiris entered into a purchase agreement, as amended, or the Osiris Purchase Agreement, under which we acquired all of Osiris’ business and assets related to culture expanded MSCs. Pursuant to the Osiris Purchase Agreement, we also agreed to make certain milestone and royalty payments to Osiris pertaining to remestemcel-L for the treatment of aGVHD and Crohn’s disease. Each milestone payment is for a fixed dollar amount and may be paid in cash or our ordinary shares or ADSs, at our option. In January 2025, we issued 10,228,239 ordinary shares to Osiris as payment for a $20.0 million milestone following the FDA approval of Ryoncil® in the United States. The maximum amount of future milestone payments we may be required to make to Osiris is $20.0 million. The shares issued in January 2025 and any other ordinary shares or ADSs we issue as consideration for a milestone payment are subject to a contractual one year holding period, which may be waived in our discretion. In the event that the price of our ordinary shares or ADSs decreases between the issue date and the expiration of any applicable holding period, we will be required to make an additional payment to Osiris equal to the reduction in the share price multiplied by the amount of issued shares under that milestone payment. This additional payment can be made either wholly in cash or 50% in cash and 50% in our ordinary shares, in our discretion. We have also agreed to pay varying earnout amounts as a percentage of annual net sales of acquired products, ranging from low single-digit to 10% of annual sales in excess of $750.0 million. These royalty 70 Table of Contents payments will cease after the earlier of a ten year commercial sales period and the first sale of a relevant competing product. The first royalty payments were made in 2016. Tasly Pharmaceutical Group — Cardiovascular Alliance for China In July 2018, we entered into a Development and Commercialization Agreement with Tasly. The Development and Commercialization Agreement provides Tasly with exclusive rights to develop, manufacture and commercialize Revascor® in China for the treatment or prevention of CHF and MPC-25-IC for the treatment or prevention of AMI. Tasly will fund all development, manufacturing and commercialization activities in China for Revascor® and MPC-25-IC. On closing, we received a $20.0 million upfront technology access fee. Further, we will receive $25.0 million upon product regulatory approvals in China. Mesoblast will receive double-digit escalating royalties on net product sales. Mesoblast is eligible to receive six escalating milestone payments upon the product candidates reaching certain sales thresholds in China. Tasly can terminate the Development and Commercialization Agreement with a specified amount of notice, on the later of (a) third anniversary of the agreement coming into effect and (b) receipt of marketing approval in China for each of Revascor® or MPC-25-IC. Mesoblast has termination rights with respect to certain patent challenges by Tasly and if certain competing activities are undertaken by Tasly. Either party may terminate the agreement on material breach of the agreement if such breach is not cured within the specified cure period or if certain events related to bankruptcy of the other party occur. TiGenix NV – patent license for treatment of fistulae In December 2017, we entered into a Patent License Agreement with TiGenix, now a wholly owned subsidiary of Takeda, which granted Takeda exclusive access to certain of our patents to support global commercialization of the adipose-derived MSC product Alofisel®, previously known as Cx601, a product candidate of Takeda, for the local treatment of fistulae. The agreement includes the right for Takeda to grant sub-licenses to affiliates and third parties. In March 2018 the European Commission granted EU marketing authorization for Alofisel for the local treatment of fistulae and the product was marketing in the EU up until December 2024 at which time it was withdrawn from the market after review of the totality of efficacy data given the results of the confirmatory phase 3 ADMIRE-CD II clinical study in US patients. As part of the agreement, we received $5.9 million (€5.0 million) before withholding tax as a non-refundable upfront payment, a further payment of $5.9 million (€5.0 million) before withholding tax 12 months after the patent license agreement date, and a further $1.2 million (€1.0 million) product regulatory milestone payment in the year ended June 30, 2022. We are entitled to further payments of up to €9.0 million when Takeda reaches certain product regulatory milestones. Additionally, we receive single digit royalties on net sales of Alofisel®. The agreement will continue in full force in each country (other than the United States) until the date upon which the last issued claim of any licensed patent covering Alofisel® expires in such country (currently expected to be 2029) or, with respect to the United States, until the later of (i) the date upon which the last issued claim of any licensed patent covering Alofisel® in the United States expires (currently expected to be around 2031) or (ii) the expiration of the regulatory exclusivity period in the United States with an agreed maximum term. Either we or Takeda may terminate the agreement for any material breach that is not cured within 90 days after notice thereof. We also have the right to terminate the agreement, with a written notice in the event that Takeda file a petition in bankruptcy or insolvency or Takeda makes an assignment of substantially all of its assets for the benefit of its creditors. Takeda have the right to terminate their obligation to pay royalties for net sales in a specific country if it is of the opinion that there is no issued claim of any licensed patent covering Alofisel® in such country, subject to referral of the matter to the joint oversight/cooperation committee established under the agreement if we disagree. Competition The biotechnology and pharmaceutical industries are highly competitive and are characterized by rapidly advancing technologies and a strong emphasis on proprietary products. Any product candidates that we and our 71 Table of Contents collaborators successfully develop and commercialize will compete with existing products and new products that may become available in the future. A number of our potential competitors, particularly large biopharmaceutical companies, have significantly greater financial resources and general expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Our market has been characterized by significant consolidation by pharmaceutical and biotechnology companies, which is likely to result in even more resources being concentrated among a smaller number of our potential competitors. Government Regulation We are developing cellular therapy product candidates. These products are subject to extensive legislation. Governmental authorities around the world, including the FDA, are charged with the administration and enforcement of numerous laws and regulations that impact all aspects of the development, production, importing, testing, approval, labeling, promotion, advertising, and sale of products such as ours. Such governmental authorities are also charged with administering what is often a lengthy and technical review and approval process before candidate therapies such as ours may be marketed for any use. Authorization or approval for marketing must generally be obtained from the local health authorities in each country in which the product is to be sold. Approval and authorization procedures may differ from country to country, as may the requirements for maintaining approvals. It is typical however for these procedures to require evidence of rigorous testing and documentation regarding the candidate therapy, which may include significant non-clinical and clinical evaluations. Extensive controls and requirements apply to the non-clinical and clinical development of our therapeutic candidates. Those requirements and their enforcement and implementation by local regulatory authorities around the world significantly impact whether a product candidate can be developed into a marketable product, and notably impact the cost, resources and timing for any such development. Changes in regulatory requirements and differences in requirements from country to country may also increase the costs of bringing new technologies such as ours to market and maintaining approvals, if obtained. To obtain marketing approval of a new product, an extensive dossier of evidence establishing the safety, efficacy and quality of the product must be submitted for review by regulatory authorities. Dossier form and substance, while often similar may have notable differences in different countries. Submission of an application to regulators does not guarantee approval to market that product, despite the fact that criteria for approval in many countries may be quite similar. Some regulatory authorities may require additional data and analyses, and may have standards that apply that are more stringent than others for review of the submitted dossier and content. Additionally, the review process, risk tolerance, and openness to new technologies may vary from country to country. Obtaining marketing approval can take several months to several years, depending on the country, the quality of the data, the efficiencies and procedures of the reviewing regulatory authority and their familiarity with the product technology. Some countries, like the U.S., may have accelerated approval processes for certain categories of products, for example products which represent a breakthrough in the field, or which meet certain thresholds and have obtained certain designations of particular interest. Nevertheless, ultimate availability to patients may be affected, even post approval, by requirements in some countries to negotiate selling prices and reimbursement terms with government regulators or other payors. Maintaining marketing approval may require the conduct of additional post-approval studies in some situations, and the continued capture, monitoring and assessment of safety and other information about the product, as well as adherence to requirements to ensure the purity and integrity of manufactured product. The process for obtaining and maintaining regulatory authorizations and approvals to market our products and the subsequent compliance with appropriate federal, state, local and foreign laws and regulations require the expenditure of substantial time and the commitment of significant financial and other resources, and we may not be able to obtain the required regulatory approvals. Product Development Process All of our product candidates are regulated as biological products by the Center for Biologics Evaluation and Research in the FDA. In the United States, biological products are subject to federal regulation under the Federal Food, Drug, and Cosmetic Act (“FDCA”), the Public Health Service (“PHS”) Act, and other federal, state, local and foreign statutes and regulations. Both the FDCA and the PHS Act, as applicable, and their corresponding regulations govern, among other things, the testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping, distribution, 72 Table of Contents import, export, reporting, advertising and other promotional practices involving drugs and biological products. Before clinical testing of a new drug or biological product may commence, the sponsor of the clinical study must submit an application for investigational new drug (“IND”) application to FDA, which must include, among other information, the proposed clinical study protocol(s). To obtain marketing authorization once clinical testing has concluded, a BLA must be submitted for FDA approval. The process required by the FDA before a biological product may be marketed in the U.S. generally involves the following: •completion of nonclinical laboratory studies, meaning in vivo and in vitro experiments in which an investigational product is studied prospectively in a test system under laboratory conditions to determine its safety, must be conducted according to cGLP (good laboratory practice) regulations, as well as, in the case of nonclinical laboratory studies involving animal test systems, in accordance with applicable requirements for the humane use of laboratory animals and other applicable regulations; •submission to the FDA of an application for an IND, which must become effective before human clinical studies may begin; •performance of adequate and well-controlled human clinical studies according to the FDA’s cGCPs (good clinical practices) and all other applicable regulatory requirements for the protection of human research subjects and their health information, to establish the safety, purity and potency of the proposed product for its intended use and to ensure the product has an appropriate risk-benefit profile; •development and demonstration of a manufacturing process that can produce product of consistent and adequate quality; •submission to the FDA of a BLA for marketing approval demonstrating the quality, safety, and efficacy of the product which must be supported by substantial evidence from adequate and well-controlled clinical investigations as well as demonstration of mode of action through non-clinical studies, evidence to support appropriate manufacturing capabilities and controls, and evidence of the stability of the product in the form it is intended to be provided; •negotiation with FDA of proposed product labeling (and determination of appropriate risk mitigation strategies and programs, if any required), as well as participation in any required advisory committee proceedings; •satisfactory completion of an FDA inspection of all manufacturing, testing and distribution facilities where the product is produced, tested or stored and distributed, to assess compliance with cGMP (good manufacturing practices) to assure that the facilities, methods and controls for production are adequate to preserve the product’s identity, strength, purity and potency; •potential FDA inspection of nonclinical facilities and likely inspection of select clinical study sites that generated the data in support of the BLA; and •FDA review and approval of the BLA. Human testing of a biological product candidate is preceded by preclinical testing, including nonclinical laboratory studies in which the product candidate is studied prospectively in a test system under laboratory conditions to determine its safety. A test system may include any animal, plant, microorganism, or subparts thereof to which the test or control article is administered or added for study. The clinical study sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA places the clinical study covered by the IND on a clinical hold within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical study can begin. The FDA may also impose clinical holds on a product candidate at any time during clinical studies due to safety concerns or non-compliance. If the FDA imposes a clinical hold, studies may not recommence unless FDA removes the clinical hold and then only under terms authorized by the FDA. Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical studies to begin, or that, once begun, issues will not arise that suspend or terminate such studies. 73 Table of Contents Clinical studies involve the administration of the product candidate to subjects under the supervision of qualified independent investigators, generally physicians or other qualified scientists and medical personnel who are not employed by or under the study sponsor’s control. Clinical studies are conducted under protocols detailing, among other things, the objectives of the clinical study, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety, including stopping rules that assure a clinical study will be stopped if certain adverse events, or AEs, should occur. Each new protocol and certain amendments to the protocol must be submitted to the FDA. Clinical studies must be conducted in accordance with the FDA’s cGCP regulations and guidance, and monitored to ensure compliance with applicable regulatory requirements. These include the requirement that written informed consent is obtained from all subjects who participate in the study. Further, each clinical study must be reviewed and approved by an independent Institutional Review Board, or IRB, at or servicing each institution at which the clinical study will be conducted. An IRB is charged with protecting the welfare and rights of study participants and considers such items as whether the risks to individuals participating in the clinical studies are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the form and content of the informed consent document that must be signed by each clinical study subject or his or her legal representative and must monitor the clinical study until completed. Throughout the study, certain information about certain serious adverse events must be reported to the IRB, in some cases on an expedited basis, and to FDA (as well as to regulators in other countries in which studies of the product are also being conducted). Human clinical studies are typically conducted in three sequential phases that may in some cases overlap or be combined: •Phase 1. The product candidate is initially introduced into a small number of human subjects. In the case of cellular therapy products, the initial human testing is conducted in patients with the disease or condition targeted by the biological product candidate. Phase 1 studies are intended to determine the metabolism and pharmacologic actions (including adverse reactions), the side effects associated with increasing doses, immunogenicity, and, if possible, to gain early evidence of effectiveness. The information obtained in Phase 1 should be sufficient to permit the design of well-controlled, scientifically valid Phase 2 studies. •Phase 2. Controlled clinical studies are conducted in a larger number of human subjects to evaluate the effectiveness of the drug for a particular indication or indications in patients with the disease or condition under study. Phase 2 studies are intended to assess side effects and risks, and to examine exposure–response relationships, and to further explore pharmacologic actions and immunogenicity associated with the drug. These studies also provide helpful information for the design of phase 3 studies. •Phase 3. Assuming preliminary evidence suggesting effectiveness has been obtained in phase 2 (generally considered to be “proof of concept”), controlled studies are conducted in a larger group of subjects to gather additional information about effectiveness and safety in order to evaluate the overall benefit-risk relationship of the drug and to provide an adequate basis for physician labeling. Post-approval clinical studies, sometimes referred to as Phase 4 clinical studies, may be conducted after initial marketing approval. In some cases, FDA may require a Phase 4 study to be performed as a condition of product approval. Sponsors also can voluntarily conduct Phase 4 studies to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up or in select populations. FDA regulations extend to all phases of clinical development and apply to sponsors and investigators of clinical studies. FDA oversight includes inspection of the sites and investigators involved in conducting the studies. Concurrent with clinical studies, companies usually complete additional animal studies, and must also develop additional information about the physical characteristics of the biological product as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. To help reduce the risk of the introduction of adventitious agents with use of biological products, the PHS Act emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things; the sponsor must develop methods for testing the identity, purity and potency of the final biological product. All such testing and controls requires the application of significant human and financial resources. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the biological product candidate does not undergo unacceptable deterioration over its shelf life. 74 Table of Contents U.S. Review and Approval Processes After the completion of clinical studies of a product candidate, FDA approval of a BLA must be obtained before commercial marketing of the biological product. The BLA must include results of product development, laboratory and animal studies, human studies, information on the manufacture and composition of the product, proposed labeling and other relevant information. In addition, under the Pediatric Research Equity Act (“PREA”), a BLA or supplement to a BLA must contain data to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may grant deferrals for submission of data or full or partial waivers. Unless otherwise required by regulation, PREA does not apply to any biological product for an indication for which orphan designation has been granted. The testing and approval processes require substantial time and effort and there can be no assurance that the FDA will accept the BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all. Under the Prescription Drug User Fee Act (“PDUFA”), as amended, each BLA must be accompanied by a substantial user fee. PDUFA also imposes an annual product fee for biologics and an annual establishment fee on facilities used to manufacture prescription biologics. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business. Additionally, an application fee is not assessed on BLAs for products designated as orphan drugs, unless the product also includes a non-orphan indication. Within 60 days following submission of the application, the FDA reviews the BLA submitted to determine if it is substantially complete before the agency accepts it for filing. The FDA may refuse to file any marketing application that it deems incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the BLA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the BLA. The FDA reviews the application to determine, among other things, whether the proposed product is safe and effective, for its intended use, and has an acceptable purity profile, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, safety, potency and purity. The FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. During the product approval process, the FDA also will determine whether a Risk Evaluation and Mitigation Strategy, or REMS, is necessary to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS; the FDA will not approve the application without a REMS, if required. Before approving a BLA, the FDA will typically inspect the facilities at which the product is manufactured. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure that the clinical studies were conducted in compliance with IND study and cGCP requirements. To assure cGMP and cGCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production, and quality control. Notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the BLA does not satisfy its regulatory criteria for approval and deny approval. Data obtained from clinical studies are not always conclusive and the FDA may interpret data differently than we interpret the same data. If the agency decides not to approve the marketing application, it will issue a complete response letter describing specific deficiencies in the application identified by the FDA. Additionally, the complete response letter may recommend actions that the applicant might take to place the application in a condition for approval. Such recommended actions could include the conduct of additional studies. If a complete response letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application. If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. The FDA may impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a risk management plan, or otherwise limit the scope of any approval. In addition, the FDA may require post-approval clinical 75 Table of Contents studies, to further assess a product’s safety and effectiveness, and testing and surveillance programs to monitor the safety of approved products that have been commercialized. One of the performance goals agreed to by the FDA under the PDUFA is to complete its review of 90% of standard BLAs within 10 months from filing and 90% of priority BLAs within six months from filing, whereupon a review decision is to be made. The FDA does not always meet its PDUFA goal dates and its review goals are subject to change from time to time. The review process and the PDUFA goal date may be extended by three months if the FDA requests or the application sponsor otherwise provides additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date. Post-Approval Requirements Maintaining substantial compliance with applicable federal, state, and local statutes and regulations requires the expenditure of substantial time and the commitment of substantial human and financial resources. Rigorous and extensive FDA regulation of biological products continues after approval, particularly with respect to cGMP. We will rely, and expect to continue to rely, on third parties for the production of clinical and commercial quantities of any products that we may commercialize. Manufacturers of our products are required to comply with applicable requirements in the cGMP regulations, including quality control and quality assurance and maintenance of records and documentation. Other post-approval requirements applicable to drug and biological products include reporting post marketing surveillance to continuously monitor the safety of the approved product. This is done through the collection of spontaneous reports of adverse events and side effects, the assessment of safety signals, if any, and prescription event monitoring, among other methods. The FDA maintains a system of postmarketing surveillance because all possible side effects of a new drug may not be evident in preapproval studies, which involve only several hundred to several thousand patients. Through postmarketing surveillance and risk assessment programs, FDA and sponsors seek to identify adverse events that did not appear during the drug approval process. In addition, FDA monitors adverse events such as adverse reactions and poisonings. FDA may use this information for a variety of purposes to identify safety signals not previously identified with the product, to update drug labeling, and, on rare occasions, to reevaluate the approval or marketing decision with respect to a product. In addition, post-approval regulatory requirements include reporting of cGMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping requirements, and complying with electronic record and signature requirements. After a BLA is approved, the product also may be subject to official lot release. As part of the manufacturing process, the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot. The FDA also may perform certain confirmatory tests on lots of some products before releasing the lots for distribution by the manufacturer. In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency, and effectiveness of drug and biological products. The FDA will also conduct routine scheduled and unannounced inspections of drug production and control facilities and processes, using field investigators and analysts, to assure ongoing safety and effectiveness of approved marketed products. Inspections may be made in conjunction with regulators from other jurisdictions and in certain cases, inspection findings and observations may be made public or may impair our ability to use the inspected facility, or to continue to produce and market a product. We also must comply with the FDA’s advertising and promotion requirements, such as those related to direct- to-consumer advertising, the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet and notably, social media. In addition, discovery of previously unknown problems or the failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant or manufacturer to administrative or judicial civil or criminal sanctions and adverse publicity. Sanctions authorized under FDA’s legal authorities could include refusal to approve pending applications, withdrawal of an approval, clinical hold, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties. 76 Table of Contents Violations of the FDCA may serve as a basis for the refusal of, or exclusion from, government contracts, including federal reimbursement programs, as well as other adverse consequences including lawsuits and actions by state attorneys general. Any agency or judicial enforcement action could have a material adverse effect on us. Drug and biological product manufacturers and other entities involved in the manufacture and distribution of approved drug or biological products are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMPs and other laws. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance. Discovery of problems with a product after approval may result in restrictions on a product, manufacturer, or holder of an approved BLA, including withdrawal of the product from the market. In addition, changes to a manufacturing process or facility generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval. U.S. Patent Term Restoration and Marketing Exclusivity Depending upon the timing, duration and specifics of the FDA approval of the use of our product candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a new drug application, or NDA, or BLA plus the time between the submission date of an NDA or BLA and the approval of that application. Only one patent applicable to an approved product can be extended and the application for the extension must be submitted prior to the expiration of the patent. The U.S. Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. A drug or biological product can obtain pediatric market exclusivity in the U.S. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study. The Biologics Price Competition and Innovation Act of 2009 created an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference biological product. Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical study or studies. Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. A new biologic is granted 12 years of exclusivity from the time of first licensure during which a biosimilar may not be launched. Government Regulation Outside of the U.S. European Union Regulation In addition to regulations in the U.S., we will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical studies and any commercial sales and distribution of our products. In particular, we view the EU and Japan as important jurisdictions for our business. For purposes of developing our products, we must obtain the requisite approvals from regulatory authorities in each country prior to the commencement of clinical studies or marketing of the product in those countries. Certain countries outside of the U.S. have a similar process that requires the submission of a clinical study application much like the IND prior to the commencement of human clinical studies. In the EU, for example, a clinical trial application (“CTA”), must be submitted to each country’s national health authority and an independent ethics committee, much like the FDA and 77 Table of Contents the IRB, respectively. Once the CTA is approved in accordance with a country’s requirements, clinical study development may proceed. The EU has two main procedures for obtaining marketing authorizations in the EU Member States: a centralized procedure or national authorization procedure, under the latter of which one can seek to go through the mutual recognition procedure or the decentralized procedure. All biotechnology products are assessed through the centralized procedure. Under the centralized authorization procedure, sponsors submit a single marketing-authorization application to the EMA. This allows the marketing-authorization holder to market the product and make it available to patients and healthcare professionals throughout the EU on the basis of a single marketing authorization. EMA's Committee for Medicinal products for Human Use (“CHMP”) carries out a scientific assessment of the application and gives a recommendation on whether the medicine should be marketed or not. Once granted by the EMA, the centralized marketing authorization is valid in all EU Member States as well as in the European Economic Area countries Iceland, Liechtenstein and Norway. The centralized procedure is mandatory for biotechnology products. Any product candidates we seek to commercialize in the EU are subject to review and approval by the European Medicines Authority (“EMA”). Submissions for marketing authorization to the EMA must be received and validated by that body which appoints a Rapporteur and Co-Rapporteur to review it. The entire review process must be completed within 210 days, with a “clock-stop” at day 120 to allow the submitting company to respond to questions set forth in the Rapporteur and Co-Rapporteur’s assessment report. Once the company responds in full, the clock for review re-starts on day 121. If further clarification is needed, the EMA may request an Oral Explanation on day 180, and the company submitting the application must appear before the CHMP to provide the requested information. On day 210, the CHMP will vote to recommend for or against the approval of the application. The final decision of EMA for marketing authorization following a positive CHMP recommendation is typically made within 60 days, with a draft decision within 15 days of the CHMP recommendation. After Marketing Authorizations have been granted, the company must submit periodic safety reports to the EMA (if approval was granted under the Centralized Procedure) or to the National Health Authorities (if approval was granted under the DCP or the MRP). In addition, pharmacovigilance measures must be implemented and monitored to ensure appropriate adverse event collection, evaluation and expedited reporting, as well as timely updates to any applicable risk management plans. For some medications, post approval studies may be required to complement available data with additional data to evaluate long term effects or to gather additional efficacy data. European marketing authorizations have an initial duration of five years. After this time, the marketing authorization may be renewed by the competent authority on the basis of re-evaluation of the risk/benefit balance. Any marketing authorization which is not followed within three years of its granting by the actual placing on the market of the corresponding medicinal product ceases to be valid. United Kingdom Marketing authorization in the United Kingdom is administered by the Medicines and Healthcare products Regulatory Agency (MHRA) and is separate from the European Medicines Agency (EMA) centralized authorization procedure. Products intended to be marketed in both the European Union and the United Kingdom generally require separate regulatory authorizations, although the MHRA provides certain recognition and reliance pathways that may allow applicants to leverage approvals from other trusted regulatory authorities. EU Exclusivity Periods To obtain regulatory approval of an investigational biological product under EU regulatory systems, we must submit a marketing authorization application. The application used to file the BLA in the U.S. is similar to that required in the EU, with the exception of, among other things, country-specific document requirements. The EU also provides opportunities for market exclusivity. For example, in the EU, upon receiving marketing authorization, new chemical entities generally receive eight years of data exclusivity and an additional two years of market exclusivity. If granted, data exclusivity prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic application. During the additional two-year period of market exclusivity, a generic marketing authorization can be submitted, and the innovator’s data may be referenced, but no generic product can be marketed until the expiration of the market exclusivity. However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical entity, and products may not qualify for data exclusivity. Products receiving orphan designation in the EU can receive 10 78 Table of Contents years of market exclusivity, during which time no similar medicinal product for the same indication may be placed on the market. An orphan product can also obtain an additional two years of market exclusivity in the EU for pediatric studies. No extension to any supplementary protection certificate can be granted on the basis of pediatric studies for orphan indications. The criteria for designating an “orphan medicinal product” in the EU are similar in principle to those in the U.S. Under Article 3 of Regulation (EC) 141/2000, a medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either (a) such condition affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the EU to justify investment; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to those affected by the condition, as defined in Regulation (EC) 847/2000. Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers and are, upon grant of a marketing authorization, entitled to 10 years of market exclusivity for the approved therapeutic indication. The application for orphan drug designation must be submitted before the application for marketing authorization. The applicant will receive a fee reduction for the marketing authorization application if the orphan drug designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The 10-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity. Additionally, marketing authorization may be granted to a similar product for the same indication at any time if: •the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; •the applicant consents to a second orphan medicinal product application; or •the applicant cannot supply enough orphan medicinal product. In addition to law and regulation specific to drug development, we note that new data protection regulations that have gone into effect in Europe are likely to have a significant impact on our activities, personnel, and may have an impact on our ability to timely complete clinical trials and effectively develop and commercialize our product candidates. The General Data Protection Regulation (the “GDPR”) was approved and adopted by the EU Parliament in April 2016 and went into effect on May 25, 2018. Unlike a Directive, the GDPR does not require any enabling legislation to be passed by any government. The GDPR not only applies to organizations located within the EU but may also apply to organizations located outside of the EU if they offer goods or services to, or monitor the behavior of, EU data subjects or if they process the personal data of subjects residing in the European Union. The implications of this regulation are therefore far reaching and may impose significant burdens on the Company and its processes and systems. Additionally, the UK government has implemented data protection legislation, which also went into effect on May 25, 2018, that substantially implements the GDPR. For other countries outside of the EU, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical studies, product licensing, coverage, pricing and reimbursement vary from country to country. In all cases, again, the clinical studies are conducted in accordance with cGCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. Pharmaceutical Coverage, Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we obtain regulatory approval. In the U.S. and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend, in part, on the availability of coverage and adequate reimbursement from third-party payors. Third-party payors include government programs such as Medicare or Medicaid, managed care plans, private health insurers, and other organizations. These third-party payors may deny coverage or reimbursement for a product or therapy in whole or in part if they determine that the product or therapy was not medically appropriate or necessary or if another less expensive potential alternative exists. Third-party payors may attempt to control costs by limiting coverage to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drug products for a particular indication, and by limiting the amount of reimbursement for particular procedures 79 Table of Contents or drug treatments. In addition, in the United States, participation in government health programs such as Medicare and Medicaid are subject to complex rules and controls relating to price reporting and calculation of prices to ensure that pricing provided to government entities for periodic reporting purposes is aligned and compliant with numerous complex statutory requirements and the lowest possible price increases, is the one used by government programs. The infrastructure and/or external resources necessary to ensure continued compliance with these requirements is extensive. Manufacturers are subject to audits, investigations, recalculations, repayment obligations and enforcement actions by CMS, OIG, state Medicaid agencies and other governmental authorities relating to government pricing calculations, inflation rebate obligations, Best Price determinations, Average Manufacturer Price reporting, Medicaid Drug Rebate Program compliance and other federal healthcare program requirements. Penalties and fines can be substantial if a manufacturer is found to be in breach of the contract with CMS or State Medicaid. The cost of pharmaceuticals and devices continues to generate substantial governmental and third-party payor interest. We expect that the pharmaceutical industry will experience pricing pressures due to the trend toward managed healthcare, the increasing influence of managed care organizations and additional legislative proposals. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. Expensive pharmacoeconomic studies are needed in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain the FDA approvals. More recently in the U.S. and for certain high-cost rare disease drugs, payors have negotiated a provision that requires manufacturers to refund the cost of the treatment if patients discontinue the drug for clinical reasons. Our product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. Further, federal and state governments continue to evaluate, propose and, in certain instances, implement additional drug pricing and reimbursement reforms, including expansion of Medicare drug price negotiations, international reference pricing, most-favored nation pricing methodologies, inflation-based rebates, enhanced price transparency requirements, subscription-based payment models, and other mechanisms intended to reduce pharmaceutical expenditures. Although we cannot predict whether any such initiatives will be adopted, implemented, expanded, modified, successfully challenged, or codified into law, or the manner in which any such initiatives may apply to our products or product candidates, these measures, individually or collectively, could reduce reimbursement and pricing flexibility, accelerate downward pricing pressure, increase rebate, discount, reporting, transparency or other compliance obligations, reduce product revenues and profitability, adversely affect the commercial value of our approved products or product candidates. Some third-party payors also require pre-approval of coverage for new or innovative devices or drug therapies before they will reimburse healthcare providers who use such therapies. While we cannot predict whether any proposed cost-containment measures will be adopted or otherwise implemented in the future, these requirements or any announcement or adoption of such proposals could have a material adverse effect on our ability to obtain adequate prices for our product candidates and to operate profitably. In addition, high-technology products such as cell therapies are typically administered at highly specialized treatment centers. Commercial access to these centers requires approval by multiple institutional committees, including Pharmacy & Therapeutics (P&T), safety, and “high-cost” or “high-dollar” review committees. If approval is not granted by any of these committees, the therapy cannot be used within those institutions, which may limit market access and uptake. In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings (or mandatory price decreases) on specific products and therapies. There can be no assurance that our products will be considered medically reasonable and necessary for a specific indication, that our products will be considered cost-effective by third-party payors, that coverage or an adequate level of reimbursement will be available or that the third-party payors reimbursement policies will not adversely affect our ability to sell our product profitably. Healthcare Reform In the U.S. and foreign jurisdictions, there have been a number of legislative and regulatory changes to the healthcare system that could affect our future results of operations. In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs. In the U.S., the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the Medicare Modernization Act, changed the way Medicare covers and pays for pharmaceutical products. The Medicare Modernization Act expanded Medicare coverage for 80 Table of Contents drug purchases by the elderly by establishing Medicare Part D and introduced a new reimbursement methodology based on average sales prices for physician administered drugs under Medicare Part B. In addition, this legislation provided authority for establishing a minimum number of drugs that will be covered in any therapeutic class under the new Medicare Part D program. Cost reduction initiatives and other provisions of this legislation, including related legislation such as the 2022 Inflation Reduction Act, could decrease the coverage and reimbursement rate that we receive for any of our approved products. While the Medicare Modernization Act applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the Medicare Modernization Act may result in a similar reduction in payments from private payors. In March 2010, the Affordable Care Act (“ACA”) came into effect, a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and medical device manufacturers and impose additional health policy reforms. We expect that the rebates, discounts, taxes and other costs resulting from the ACA over time will have a negative effect on our expenses and profitability in the future. Furthermore, expanded government investigative authority and increased disclosure obligations may increase the cost of compliance with new regulations and programs. The federal 2022 Inflation Reduction Act requires, among other things, the federal government to negotiate the selling price of certain high-expenditure single-source biologics, penalizes manufacturers that raise prices of Medicare Part B and Part D beyond the rate of inflation, and establishes a manufacturer discount program which significantly lowers beneficiary maximum out-of-pocket costs. The current Administration, Congress, CMS and other governmental agencies continue to evaluate, propose and, in certain instances, implement additional healthcare, drug pricing and reimbursement reforms. Such initiatives include, among others, expansion of Medicare drug price negotiation programs, inflation-based rebate obligations, international reference pricing and most-favoured nation pricing methodologies, increased pricing transparency and reporting requirements, reforms affecting pharmacy benefit managers and pharmaceutical supply chains, measures intended to increase biosimilar and generic competition, and other mechanisms designed to reduce federal and private healthcare expenditures. Although we cannot predict whether any such initiatives will be adopted, expanded, modified, successfully challenged, or codified into law, or the manner in which any such initiatives may apply to our products or product candidates, these measures could reduce reimbursement and pricing flexibility, increase rebate, discount, reporting and compliance obligations, accelerate downward pricing pressure, adversely affect coverage decisions by government and private payors, reduce product revenues and profitability, and materially adversely affect our business, financial condition and results of operations. Federal and state healthcare reform efforts remain ongoing, and we cannot predict what additional healthcare programs, legislation, regulations or administrative actions may ultimately be implemented or the impact such measures may have on our business. The impact of those changes on us and potential effect on the pharmaceutical industry as a whole is currently unknown but, any changes to the health care laws or regulations, especially to Medicare drug reimbursement, are likely to have an impact on our results of operations and may have a material adverse effect on our results of operations. We cannot predict what other health care programs and regulations will ultimately be implemented at the federal or state level or the effect of any future legislation or regulation in the United States may have on our business. It is possible that healthcare reform measures that have been and may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product, and could seriously harm our future revenue. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors, and formulary restrictions among private payors including the largest pharmacy benefit managers have increased over recent months, especially as regards to new and high-cost market entrants. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. In addition, different pricing and reimbursement schemes exist in other countries. In the European Community, governments influence the price of pharmaceutical products through their pricing and reimbursement rules and control of national healthcare systems that fund a large part of the cost of those products to consumers. Some jurisdictions operate positive and negative list systems under which products may be marketed only once a reimbursement price has been agreed upon. Some of these countries may require, as condition of obtaining reimbursement or pricing approval, the completion of clinical trials that compare the cost- effectiveness of a particular product candidate to currently available therapies. Other 81 Table of Contents member states allow companies to fix their own prices for medicines but monitor and control company profits. The downward pressure on healthcare costs in general, particularly prescription drugs, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. Certain countries and governmental authorities also utilise international reference pricing methodologies, and proposals have been made in the United States to link reimbursement or pricing for certain pharmaceutical products to prices available in foreign jurisdictions. To the extent such policies are adopted or expanded, they may place additional downward pressure on product pricing, reimbursement and profitability. Other Healthcare Laws and Compliance Requirements In the U.S., the research, manufacturing, distribution, sale and promotion of drug products, including biologics, and medical devices are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, divisions of the U.S. Department of Health and Human Services, including the Office of Inspector General and the Centers for Medicare and Medicaid Services, the U.S. Department of Justice, state Attorneys General, and other state and local government agencies. For example, sales, marketing and scientific/educational grant programs must comply with fraud and abuse laws such as the federal Anti-Kickback Statute, as amended, the federal False Claims Act, as amended, and similar state laws. Pricing and rebate programs must comply with the Medicaid Drug Rebate Program requirements of the Omnibus Budget Reconciliation Act of 1990, as amended, and the Veterans Health Care Act of 1992, as amended. If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply. All of these activities are also potentially subject to federal and state consumer protection and unfair competition laws. The federal Anti-Kickback Statute prohibits any person, including a prescription drug manufacturer (or a party acting on its behalf), from knowingly and willfully soliciting, receiving, offering or providing remuneration, directly or indirectly, to induce or reward either the referral of an individual, or the furnishing, recommending, or arranging for a good or service, for which payment may be made under a federal healthcare program such as the Medicare and Medicaid programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, and formulary managers on the other. The term “remuneration” has been broadly interpreted to include anything of value, including for example, gifts, discounts, the furnishing of supplies or equipment, credit arrangements, payments of cash, waivers of payments, ownership interests and providing anything at less than its fair market value. Even the award of grant moneys, or the provision of in-kind support, publicity and even authorship, in certain cases, may be deemed to be “remuneration.” Although there are a number of statutory exceptions and regulatory safe harbors protecting certain business arrangements from prosecution, the exception and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Our practices may not in all cases meet all of the criteria for safe harbor protection from federal Anti-Kickback Statute liability. The reach of the Anti-Kickback Statute was broadened by the ACA, so that the government need no longer prove, for purposes of establishing intent under the federal Anti-Kickback Statute, that a person or entity had actual knowledge of the statute or specific intent to violate it. In addition, the ACA provides that a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act (discussed below). Additionally, many states have adopted laws similar to the federal Anti-Kickback Statute, and some of these state prohibitions apply to the referral of patients for healthcare items or services reimbursed by any third-party payor, including private payors. In at least some cases, these state laws do not contain safe harbors. The federal False Claims Act imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a federal healthcare program. The qui tam provisions of the False Claims Act allow a private individual to bring civil actions on behalf of the federal government and share in any recovery. In recent years, the number of suits brought by private individuals has increased dramatically. In addition, various states have enacted false claims laws analogous to the False Claims Act. Many of these state laws apply where a claim is submitted to any third-party payor and not merely a federal healthcare program. There are many potential bases for liability under the False Claims Act. Liability arises, primarily, when an entity knowingly submits, or causes another to submit, a false claim for reimbursement to the federal government. The False Claims Act has been used to assert liability on the basis of inadequate care, kickbacks and other improper referrals, improperly reported government pricing metrics such as Best Price or Average Manufacturer Price, improper use of Medicare numbers when detailing the provider of services, improper promotion of off-label uses (i.e., uses not expressly approved by FDA in a drug’s label), and allegations as to misrepresentations with respect to the services rendered. The Office of Inspector General of the U.S. Department of Health and Human Services possesses broad authority to impose administrative sanctions, including civil monetary penalties, assessments, exclusion from participation in federal healthcare programs, and Corporate Integrity 82 Table of Contents Agreements, and has increasingly focused on manufacturer arrangements involving healthcare professionals, patient support programs, copay assistance arrangements, speaker programs, educational grants and other activities that may be viewed as inducing the use or purchase of healthcare items or services reimbursed by federal healthcare programs. Government authorities, including the Department of Justice and the Office of Inspector General, have increasingly scrutinized pharmaceutical manufacturer speaker programs, advisory boards, consultant arrangements, educational grants, sponsorships, market access initiatives and patient support activities, particularly where such activities are alleged to serve as inducements for prescribing, recommending, purchasing or reimbursing products. Substantial resources have been allocated by both the Department of Justice and the Federal Bureau of Investigation, among other branches of the U.S. government to identify and investigate possible health care fraud activities. Recent investigations include those relating to allegedly egregious price increases by manufacturers and alleged fraud involving co-pay arrangements supported by sponsors. As new theories of liability arise, there is a corresponding cost of doing business in order to maintain compliance. The Office of Inspector General of the U.S. Department of Health and Human Services possesses broad authority to impose administrative sanctions, including civil monetary penalties, assessments, exclusion from participation in federal healthcare programs, and Corporate Integrity Agreements, and has increasingly focused on manufacturer arrangements involving healthcare professionals, patient support programs, copay assistance arrangements, speaker programs, educational grants and other activities that may be viewed as inducing the use or purchase of healthcare items or services reimbursed by federal healthcare programs. Our future activities relating to the reporting of discount and rebate information and other information affecting federal, provincial, state and third-party reimbursement of our products, and the sale and marketing of our products and our service arrangements or data purchases, among other activities, may be subject to scrutiny under these laws. We are unable to predict whether we would be subject to actions under the False Claims Act or a similar state law, or the impact of such actions. However, the cost of defending such claims, as well as any sanctions imposed, could adversely affect our financial performance. Also, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), created several new federal crimes including healthcare fraud and false statements relating to healthcare matters. The healthcare fraud provision of HIPAA prohibits knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors. The false statements provision prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. In addition, we may be subject to, or our marketing activities may be limited by, data privacy and security regulation by both the federal government and the states in which we conduct our business. For example, HIPAA and its implementing regulations established uniform federal standards for certain “covered entities” (healthcare providers, health plans and healthcare clearinghouses) governing the conduct of certain electronic healthcare transactions and protecting the security and privacy of protected health information. The American Recovery and Reinvestment Act of 2009, commonly referred to as the economic stimulus package, included expansion of HIPAA’s privacy and security standards called the Health Information Technology for Economic and Clinical Health Act (“HITECH”), which became effective on February 17, 2010. Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates”—independent contractors or agents of covered entities that create, receive, maintain, or transmit protected health information in connection with providing a service for or on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. We are also subject to an increasingly complex framework of federal and state privacy, cybersecurity and consumer data protection laws. State privacy laws, including comprehensive consumer privacy statutes adopted in numerous jurisdictions, as well as evolving cybersecurity, breach notification, artificial intelligence governance and health information protection requirements, may impose additional compliance obligations and increase regulatory and litigation risk. There are also an increasing number of state “sunshine” laws that require manufacturers to make reports to states on pricing and marketing information, as well as regarding payments to healthcare professionals. Several states have enacted legislation requiring pharmaceutical companies to, among other things, establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit certain other sales and marketing practices. State laws are not harmonized and contain different reporting requirements and restrictions which must be noted and adhered to. We report under these state laws in connection with the sale and marketing of our products, and have developed the 83 Table of Contents infrastructure, and engage third-party contractors, to assist us in our compliance with these laws. Failure to comply may result in financial and other penalties and consequences. In addition, beginning in 2013, a similar “sunshine” federal requirement under the Physician Payment Sunshine Act began requiring manufacturers to track and report to the federal government certain payments and other transfers of value made to certain covered recipients, including physicians and other healthcare professionals, and teaching hospitals. In addition to payments, reporting may encompass requirements to report on ownership or investment interests held by physicians and their immediate family members. The efforts and resources needed to track and report payments go well beyond our affiliates operating in the United States, as reporting is required also for payments made by affiliated entities in many cases to U.S. covered recipients. In other jurisdictions (e.g., Australia, Japan and Europe) similar “sunshine-like” laws have also been adopted, which may require disclosure of certain payment and other information to covered recipients. Extensive administration and systems, including to aggregate and categorize spend, are necessary in order to enable compliant and timely reporting under these requirements. The U.S. federal government began disclosing the reported information on a publicly available website in 2014. Federal transparency reporting requirements have expanded beyond physicians and teaching hospitals to include additional categories of healthcare professionals and other covered recipients. These laws may affect our development, sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us. Future expansions of reporting obligations may increase our compliance burden and expose us to additional reporting, audit and enforcement risks. If we fail to track and report as required by these laws or otherwise fail to comply with these laws, we could be subject to the penalty and sanctions of the pertinent state and federal authorities. Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the federal or state laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including criminal and significant civil monetary penalties, damages, fines, imprisonment, exclusion from participation in government healthcare programs, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of premarketing product approvals, private qui tam actions brought by individual whistleblowers in the name of the government or refusal to allow us to enter into supply contracts, including government contracts, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-approval requirements, including safety surveillance, anti-fraud and abuse laws, implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals. Our operations and interactions with healthcare professionals, healthcare institutions and government officials outside the United States may also be subject to anti-corruption and anti-bribery laws, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws in other jurisdictions. Australian Disclosure Requirements Business Strategies and Prospects for Future Years We are focused on the following core strategic imperatives: •grow the commercial use of Ryoncil® for pediatric SR-aGVHD in the United States •extend the commercial label for Ryoncil® to additional indications in the United States •continue to innovate and optimize our disruptive technology platform for cell-based therapeutics; •develop a portfolio of clinically distinct products; •focus on bringing late-stage products to market and portfolio prioritization; •enabling manufacturing scale-up to meet demands of the portfolio; •leverage talent base to continue to establish a culture of shared leadership and accountability; •focus on strategic partnerships; •focus on prudent cash management; and •continue to strengthen our substantial and robust intellectual property estate. 84 Table of Contents Dividends No dividends were paid during the course of the fiscal year ended June 30, 2026. There are no dividends or distributions recommended or declared for payment to members, but not yet paid, during the year. 4.C Organizational Structure See “Item 4. Information on the Company – 4.B Business Overview – Overview”, “Item 18. Financial Statements – Note 12” and Exhibit 8.1 to this Annual Report. 4.D Property, Plants and Equipment We lease approximately 5,750 square feet of office space in Melbourne, Australia, where our headquarters are located. We pay approximately A$432,000 per year for this lease, which expires in December 2030. We also lease approximately 8,000 square feet in New York City, where significant development and commercial activities are conducted. We pay approximately $650,000 per year for this lease. We also lease laboratory and office space in Singapore. We pay approximately S$281,000 per year for this lease. We also lease laboratory space in Texas and pay approximately $333,000 per year for this lease, which expires in December 2026. Our manufacturing operations are primarily located at Lonza’s manufacturing facilities in Singapore. See “Item 4.B Business Overview – Manufacturing and Supply Chain.”