v3.26.1
Financial assets and liabilities
 12 Months Ended
Jun. 30, 2026
Disclosure Of Financial Assets And Liabilities [Abstract]  
Financial assets and liabilities Financial assets and liabilities
This note provides information about the Group's financial instruments, including:
•an overview of all financial instruments held by the Group;
•specific information about each type of financial instrument;
•accounting policies; and
•information used to determine the fair value of the instruments, including judgments and estimation uncertainty involved.
The Group holds the following financial instruments:
Financial assets
(in U.S. dollars, in thousands)		Notes
Assets at
FVOCI(1)
Assets at
FVTPL(2)
Assets at
amortized cost		Total
As of June 30, 2026
Cash & cash equivalents5(a)— — 102,914 102,914 
Trade & other receivables5(b)— — 57,660 57,660 
Financial assets at fair value through other comprehensive income— — — — 
Other non-current assets5(c)— — 1,204 1,204 
— — 161,778 161,778 
As of June 30, 2025
Cash & cash equivalents5(a)— — 161,551 161,551 
Trade & other receivables5(b)— — 14,866 14,866 
Financial assets at fair value through other comprehensive income1,388 — — 1,388 
Other non-current assets5(c)— — 1,296 1,296 
1,388 — 177,713 179,101 
(1)Fair value through other comprehensive income
(2)Fair value through profit or loss
Financial liabilities
(in U.S. dollars, in thousands)		Notes
Liabilities at
FVOCI(1)
Liabilities at
FVTPL(2)
Liabilities at
amortized cost		Total
As of June 30, 2026
Trade and other payables5(d)— — 46,806 46,806 
Borrowings5(e)— — 119,235 119,235 
Contingent consideration5(f)(iii)— 7,352 — 7,352 
Warrant liability5(f)(vi)— 8,912 — 8,912 
— 16,264 166,041 182,305 
As of June 30, 2025
Trade and other payables5(d)— — 19,082 19,082 
Borrowings5(e)— — 121,894 121,894 
Contingent consideration5(f)(iii)— 21,779 — 21,779 
Warrant liability5(f)(vi)— 5,724 — 5,724 
— 27,503 140,976 168,479 
(1)Fair value through other comprehensive income
(2)Fair value through profit or loss
The Group’s exposure to various risks associated with the financial instruments is discussed in Note 10. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above.
a.    Cash and cash equivalents
As of June 30,
(in U.S. dollars, in thousands)20262025
Cash at bank47,390 161,158 
Deposits at call55,524 393 
102,914 161,551 
(i)    Classification as cash equivalents
Cash at bank represents cash accounts that are readily accessible to the Group. Deposits at call are interest-bearing term deposits that are readily convertible to cash to the Group with a maturity of three months or less from the date of acquisition and are subject to an insignificant risk of changes in value.
As of June 30, 2026 and June 30, 2025, $0.5 million and $0.4 million are held as security and restricted for use, respectively.
b.    Trade and other receivables and prepayments
(i)    Trade and other receivables
As of June 30,
(in U.S. dollars, in thousands)20262025
Trade receivables, net(1)
57,076 13,911 
Taxes recoverable (Goods and services tax, foreign withholding tax and value added tax)583 765 
Other receivables1 190 
Trade and other receivables57,660 14,866 
(1)As of June 30, 2026 and June 30, 2025, gross trade receivables is offset by estimated government chargebacks of $2.1 million and $0.9 million, respectively.
(ii)    Prepayments
As of June 30,
(in U.S. dollars, in thousands)20262025
Prepaid manufacturing costs5,695 1,796 
Prepaid insurance and subscriptions2,235 1,967 
Clinical trial research and development expenditure441 1,402 
Other435 522 
Prepayments8,806 5,687 
(iii)    Classification as trade and other receivables
Trade receivables and other receivables represent the gross amounts due at balance date less adjustments for estimated revenue deductions such as certain distribution fees and chargebacks as applicable to receivables on product sales, and any provision for expected credit losses, where applicable. The Group uses the simplified approach to measuring expected credit losses, which uses a lifetime expected credit loss allowance. Debts which are known to be uncollectible are written off in the Consolidated Income Statement within Selling, general and administration expenses. All trade and other receivables, with the exception of the net investment in sublease, are recognized at the value of the amounts receivable, as
trade receivables from product sales are due within 112 days, and other trade and other receivables are due for settlement within 60 days, and therefore do not require remeasurement.
(iv)    Fair values of trade and other receivables
Due to the short-term nature of the current receivables, their carrying amount is assumed to be the same as their fair value.
(v)    Impairment and risk exposure
Information about the impairment of trade and other receivables, their credit quality and the Group’s exposure to credit risk, foreign currency risk and interest rate risk can be found in Note 10(a) and (b).
c.    Other non-current assets
As of June 30,
(in U.S. dollars, in thousands)20262025
Bank guarantee383 475 
Letter of credit569 569 
Security deposit252 252 
1,204 1,296 
(i)    Classification of financial assets as other non-current assets
Bank guarantee
These funds are held in an account named Mesoblast Limited at National Australia Bank according to the terms of a Bank Guarantee which is security for the sublease agreement for our occupancy of Level 38, 55 Collins Street, Melbourne, Victoria, Australia. The Bank Guarantee is security for the full and faithful performance and observance by the subtenant of the terms, covenants and conditions of the sublease. The Bank Guarantee continues in force until it is released by the lessor.
Letter of credit
These funds held in an account named Mesoblast, Inc. at the Bank of America according to the terms of an irrevocable standby letter of credit which is security for the sublease agreement for our occupancy of 1114 6th Avenue, 4th Floor, New York, NY, 10036, United States of America. The letter of credit is security for the full and faithful performance and observance by the subtenant of the terms, covenants and conditions of the sublease. The letter of credit is deemed to automatically renewed without amendment for a period of one year at each anniversary.
(ii)    Impairment and risk exposure
Information about the impairment of other non-current assets and their credit quality and the Group’s exposure to credit risk can be found in Note 10(b).
d.    Trade and other payables
As of June 30,
(in U.S. dollars, in thousands)20262025
Trade payables and other payables34,508 18,133 
Gross to net accruals12,298 949 
Trade and other payables46,806 19,082 
The carrying amounts of trade and other payables are assumed to be the same as their fair values, due to their short-term nature. Gross to net accruals includes amounts for government rebates, distribution fees, distributor and off-label discounts, patient assistance programs, freight and packaging costs and returns associated with product sales.
e.    Borrowings
As of June 30,
(in U.S. dollars, in thousands)20262025
Borrowings
Secured liabilities:
Borrowing arrangements121,039 81,919 
Less: transaction costs(2,946)(10,782)
Amortization of carrying amount, net of payments made1,142 50,757 
119,235 121,894 
As of June 30,
(in U.S. dollars, in thousands)20262025
Borrowings
Current
Borrowings - Credit-line facility10,597 — 
Borrowings - NovaQuest— 11,153 
Borrowings - Oaktree— 43,002 
10,597 54,155 
Non-current
Borrowings - Credit-line facility108,638 — 
Borrowings - NovaQuest— 67,739 
108,638 67,739 
119,235 121,894 
(i)    Borrowing arrangements
Credit-line facility
In December 2025, the Group entered into a new $125.0 million five-year credit-line facility provided by the Group's largest shareholder. The Group drew the first tranche of $75.0 million on closing, with $41.7 million of proceeds being used to repay in full the outstanding balance of the existing senior secured loan facility with Oaktree and $25.0 million of proceeds being used to repay in part the loan and security agreement with NovaQuest. The $75.0 million proceeds were first allocated to the issue of warrants at fair value of $4.0 million (A$5.9 million), with the remainder to the new credit-line facility. In June 2026, the Group drew the second tranche of $50.0 million from the existing credit-line facility and extinguished the maturing NovaQuest debt. The credit-line facility has a five year interest only period, at a fixed rate of 8.00% per annum, payable quarterly. The loan agreement contains covenants, including on incurrence of secured debt and a minimum liquidity amount.
Following the repayment of the NovaQuest debt, the $125.0 million is secured solely with the TEMCELL® HS Inj. (“TEMCELL”) royalty. The new credit-line facility can be repaid at any time without incurring early prepayment or make-whole fees, does not include exit fees, apart from TEMCELL does not encumber any of the Group's material assets or intellectual property, and has no restrictions on additional unsecured debt or licensing activities.
As at June 30, 2026, the portion of the credit‑line facility that is contractually due within the next twelve months has been classified as a current liability. This amount reflects the present value of interest payable within the next 12 months.
As part of the credit-line facility, warrants were granted to purchase 3,225,756 shares or 322,576 American Depositary Shares (“ADSs”) under a 1‑for‑10 ADS ratio, at A$3.20 per share, a 15% premium to the 30-day VWAP, with the ADS price calculated using the USD spot rate at the time of exercise. The Group has determined that an obligation to issue the warrants has arisen from the time the credit-line facility was signed; consequently, a liability for the warrants was recognized in December 2025. The warrants may be exercised within 5 years of grant. The warrants are subject to
shareholder approval and have not yet been legally issued at the date of this report. The warrants are classified as a current financial liability and measured at fair value through profit or loss (“FVTPL”), as their settlement terms create variability in proceeds and may require cash settlement and they may be exercised anytime following shareholder approval. Refer to Note 5(f)(vi) for more details on warrants issued.
In the year ended June 30, 2026, the Group recognized a loss of $1.0 million in the Consolidated Income Statement as remeasurement of borrowing arrangements within finance costs in relation to the adjustment of the carrying amount of the financial liability to reflect the revised estimated future cash flows from the credit-line facility. No remeasurement of borrowing arrangements were recognized in the years ended June 30, 2025 and 2024.
This credit-line facility is with a related party, Dr. Gregory George, a non-executive director of Mesoblast Limited. Material terms of the related party loan are described above.
Funds associated with Oaktree Capital Management, L.P. (“Oaktree”)
In November 2021, the Group entered into a five-year senior debt facility provided by funds associated with Oaktree. The facility had a three-year interest only period, at a fixed rate of 9.75% per annum, after which time the principal balance amortized 5.0% per quarter beginning December 2024. The facility also allowed the Group to make quarterly payments of interest at a rate of 8.0% per annum for the first two years, and the unpaid interest portion (1.75% per annum) was added to the outstanding loan balance and accrued further interest at a fixed rate of 9.75% per annum. The principal balance at the end of the three-year interest only period was $52.2 million, which amortized at 5% per quarter beginning December 2024.
In December 2025, the Group repaid $41.7 million to extinguish the Oaktree loan using proceeds from the new five-year credit-line facility.
In the year ended June 30, 2026, the Group recognized a loss of $1.5 million in the Consolidated Income Statement as remeasurement of borrowing arrangements within finance costs in relation to repaying and extinguishing the Group's outstanding loan with Oaktree which has been replaced with a new $125.0 million five-year credit-line facility. In the years ended June 30, 2025, and 2024, respectively, the Group recognized losses of $0.2 million and $2.3 million in the Consolidated Income Statement as remeasurement of borrowing arrangements within finance costs in relation to the adjustment of the carrying amount of the financial liability to reflect the revised estimated future cash flows from the Oaktree facility.
NovaQuest Capital Management, L.L.C.
In June 2018, the Group entered into an eight-year loan and security agreement with NovaQuest drawing $30.0 million of the principal in July 2018. The loan had a fixed interest rate of 15% per annum, with an interest only period of four years through until July 2022, followed by a four-year amortization period through until maturity in July 2026. Repayments were based on a percentage of net sales receipts of Ryoncil® for the treatment in pediatric patients with SR-aGVHD in the United States and other geographies excluding Asia ("Ryoncil® for pediatric SR-aGVHD"). Principal was repayable in equal quarterly installments over the amortization period of the loan. Any unpaid interest was added to the principal amounts owing and accrued further interest.
In June 2026, the Group repaid $50.4 million to extinguish the NovaQuest loan using proceeds from drawing the second tranche of the new five years credit-line facility. Prior to extinguishing the loan in June 2026, the Group paid $14.6 million to NovaQuest being 25% of receipts from net sales of Ryoncil® for pediatric SR-aGVHD during the year ended June 30, 2026. The Group had also repaid $25.0 million to NovaQuest in December 2025 with proceeds from drawing the first tranche from the new five years credit facility.
In the years ended June 30, 2026, 2025 and 2024, respectively, the Group recognized a gain of $0.5 million and losses of $0.2 million and $0.1 million in the Consolidated Income Statement as remeasurement of borrowing arrangements within finance costs in relation to the adjustment of the carrying amount of the Group's financial liability to reflect the revised estimated future cash flows as a net result of changes to the key assumptions in development timelines.
(ii)    Compliance with loan covenants
The Group's credit-line facility contains a number of covenants that impose operating restrictions on the Group, which may restrict its ability to respond to changes in the business or take specified actions. The Group is currently obliged to maintain a minimum unrestricted cash balance of $25.0 million under its loan and security agreement with the new credit-line facility. The Group also has covenants in our loan and security agreements with its lender to provide certain financial and management reports periodically.
The Group has complied with all loan covenants of its borrowing facilities during the year ended June 30, 2026 and 2025, and through the date of this report.
(iii)    Net debt reconciliation
As of June 30,
(in U.S. dollars, in thousands)20262025
Cash and cash equivalents102,914 161,551 
Borrowings(119,235)(121,894)
Lease liabilities(8,099)(6,263)
Warrant liability(8,912)(5,724)
Net Debt(33,332)27,670 
Cash and cash equivalents102,914 161,551 
Gross debt - fixed interest rates(127,334)(128,157)
Warrant liability(8,912)(5,724)
Net Debt(33,332)27,670 

Liabilities from financing activities Other assets
(in U.S. dollars, in thousands)BorrowingsLeasesWarrant liabilitySub-total Cash and cash
equivalents		Total
As at June 30, 2025(121,894)(6,263)(5,724)(133,881)161,551 27,670 
Cash Flows(1)
23,907 2,419 (3,961)22,365 (60,182)(37,817)
Remeasurement adjustments(1,965)— 859 (1,106)— (1,106)
Other Changes(2)
(19,283)(1,670)— (20,953)— (20,953)
Acquisition – leases— (2,521)— (2,521)— (2,521)
Foreign exchange adjustments— (64)(86)(150)1,545 1,395 
As at June 30, 2026(119,235)(8,099)(8,912)(136,246)102,914 (33,332)
(1)Cash flows for borrowings and leases include the payments of borrowings, lease liabilities, interest and debt transaction costs which are presented as financing cash flows in the statement of cash flows.
(2)Other changes include modification of leases and accrued interest expenses for borrowings and leases.
(iv)    Fair values of borrowing arrangements
The carrying amount of the borrowings at amortized cost in accordance with our accounting policy is a reasonable approximation of fair value.
f.    Recognized fair value measurements
(i)    Fair value hierarchy
The following table presents the Group's financial assets and financial liabilities measured and recognized at fair value as of June 30, 2026 and June 30, 2025 on a recurring basis, categorized by level according to the significance of the inputs used in making the measurements:
As of June 30, 2026
(in U.S. dollars, in thousands)NotesLevel 1Level 2Level 3Total
Financial Assets
Financial assets at fair value through other comprehensive income:
Equity securities - biotech sector— — — — 
Total Financial Assets— — — — 
Financial Liabilities
Financial liabilities at fair value through profit or loss:
Contingent consideration5(f)(iii)— — 7,352 7,352 
Warrant liabilities5(f)(vi)— — 8,912 8,912 
Total Financial Liabilities— — 16,264 16,264 
There were no transfers between any of the levels for recurring fair value measurements during the period.
As of June 30, 2025
(in U.S. dollars, in thousands)NotesLevel 1Level 2Level 3Total
Financial Assets
Financial assets at fair value through other comprehensive income:
Equity securities - biotech sector— — 1,388 1,388 
Total Financial Assets— — 1,388 1,388 
Financial Liabilities
Financial liabilities at fair value through profit or loss:
Contingent consideration5(f)(iii)— — 21,779 21,779 
Warrant liabilities5(f)(vi)— — 5,724 5,724 
Total Financial Liabilities— — 27,503 27,503 
The Group’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and financial assets at fair value through other comprehensive income securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, foreign exchange contracts) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for provisions and other liabilities (contingent consideration), equity securities (unlisted) and warrant liabilities.
(ii)    Valuation techniques used.
The Group did not hold any level 1 or 2 financial instruments as at June 30, 2026 or June 30, 2025.
The Group’s level 3 assets consists of an investment in unlisted equity securities in the biotechnology sector. Level 3 assets were 100% of total assets measured at fair value as at June 30, 2026 and June 30, 2025. The Group’s level 3 liabilities consist of a contingent consideration provision related to the acquisition of MSC assets from Osiris and warrant liabilities. Level 3 liabilities were 100% of total liabilities measured at fair value as at June 30, 2026 and June 30, 2025. The Group used discounted cash flow analysis to determine the fair value measurements of contingent consideration, Black-Scholes valuation method to determine the fair value of a financial derivative within contingent consideration and the Black-Scholes valuation method to determine the fair value of warrant liabilities. Refer to Note 5(f)(vi) for the fair value measurement and movements in warrant liability for the period ended June 30, 2026 and June 30, 2025.
(iii)    Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in the contingent consideration balances within the level 3 instruments for the years ended June 30, 2026 and June 30, 2025:
(in U.S. dollars, in thousands)
Contingent
consideration
provision
Opening balance - July 1, 202426,892 
Amount paid during the period(1)
(20,000)
Charged/(credited) to consolidated income statement:
Remeasurement(2)
14,887 
Closing balance - June 30, 202521,779 
Opening balance - July 1, 202521,779 
Amount transferred to other payables during the period(3)
(2,370)
Charged/(credited) to consolidated income statement:
Remeasurement(3)
(12,057)
Closing balance - June 30, 20267,352 

(1)
In January 2025, the Group issued 10,228,239 ordinary shares as payment for a $20.0 million milestone within contingent consideration following the FDA approval of Ryoncil® in the treatment of children with SR-aGVHD in the United States in December 2024. The shares are subject to a 12-month lock-up period.
(2)
In the year ended June 30, 2025, a loss of $14.9 million was recognized on the remeasurement of contingent consideration pertaining to the acquisition of MSC assets from Osiris. Within this $14.9 million loss, $4.6 million of the remeasurement loss was a net result of changing key assumptions of the contingent consideration valuation, such as probability of success, development timelines and the increase in valuation as the time period shortens between the valuation date and the potential settlement dates of contingent consideration including the impact of receiving FDA approval for Ryoncil® in the treatment of children with SR-aGVHD in December 2024.

Within the $14.9 million loss, the Group also recognized a loss of $10.3 million due to the remeasurement of the milestone paid in relation to the FDA approval of Ryoncil® in the treatment of children with SRaGVHD in the United States in December 2024. The contingent consideration milestone was paid in January 2025 through the issuance of shares, which were subject to a 12-month lock-up period. If the share price decreased over the lock-up period an additional payment equal to the reduction in the share price multiplied by the amount of issued shares under that milestone payment was required to be paid. This loss reflects the fair value remeasurement of the issued shares as at June 30, 2025.
(3)
In the year ended June 30, 2026, a gain of $12.1 million was recognized on the remeasurement of contingent consideration pertaining to the acquisition of MSC assets from Osiris. Within this $12.1 million gain, $4.2 million gain was due to the remeasurement of contingent consideration pertaining to the acquisition of MSC assets. This gain was a result of changing the key assumptions of the contingent consideration valuation such as probability of success and probability of payment.

Within the $12.1 million gain, the Group also recognized a gain of $7.9 million due to the fair value remeasurement of the contingent consideration milestone payment made in January 2025 through the issuance of shares that were subject to a 12-month lock-up period. At the end of the lock-up period, the contingent consideration milestone liability has been transferred to trade and other payables.
(iv)    Valuation inputs and relationship to fair value
The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements:
Range of inputs
(weighted average)
(in U.S. dollars, in thousands,
except percent data)
Description
Fair value
as of
June 30,
2026)		Fair value
as of
June 30,
2025)		Valuation
technique
Unobservable
inputs(1)
Year Ended
June 30,
2026		Year Ended
June 30,
2025		Relationship of
unobservable inputs to
fair value
Contingent consideration provision7,352 21,779 Discounted cash flowsRisk adjusted
discount rate		N/A
11%-13%
(12.5%)
Year ended June 30, 2026: N/A
Year ended June 30, 2025: A change in the discount rate by 0.5% would have no impact to the fair value.
Expected unit
sales price		N/AVarious
Year ended June 30, 2026: N/A
Year ended June 30, 2025: A change in the price assumptions by 10% would increase/decrease the fair value by 0.2%.
Expected sales
volumes		N/AVarious
Year ended June 30, 2026: N/A
Year ended June 30, 2025: A change in the volume assumptions by 10% would increase/decrease the fair value by 0.2%.
Probability of success and paymentVariousVarious
Year ended June 30, 2026: A change in the probability of success and payment assumptions by 10% and 20% would increase/decrease the fair value by 10% and 20.0%, respectively.
Year ended June 30, 2025: A change in the probability of success and payment assumptions by 10% and 20% would increase/decrease the fair value by 10% and 20%, respectively.
(1)There were no significant inter-relationships between unobservable inputs that materially affect fair values.
(v)    Valuation processes of contingent consideration provision
In connection with the Osiris acquisition, on October 11, 2013 (the “acquisition date”), an independent valuation of the contingent consideration was carried out by an independent valuer.
For the years ended June 30, 2026 and June 30, 2025, the Group has adopted a process to value contingent consideration internally. This valuation has been completed by the Group’s internal valuation team and reviewed by the Head of Finance. The valuation team is responsible for the valuation model. The valuation team also manages a process to continually refine the key assumptions within the model. This is done with input from the relevant business units. The key assumptions in the model have been clearly defined and the responsibility for refining those assumptions has been assigned to the most relevant business units. For each indication the Group determines the probability of success based on the current development status within each jurisdiction and payment provisions within the agreement. Cash flows relevant to each jurisdiction are discounted appropriately based on the discount rate assumed. The remeasurement charged to the Consolidated Income Statement in the year ended June 30, 2026 was a net result of changing the key assumptions of the contingent consideration valuation such as development timelines and the increase in valuation as the time period shortens between the valuation date and the potential settlement dates of contingent consideration.
The main level 3 inputs used by the Group in the valuation of contingent consideration are evaluated as follows:
Risk adjusted discount rate:The discount rate used in the valuation has been determined based on required rates of returns of listed companies in the biotechnology industry (having regards to their stage of development, their size and number of projects) and the indicative rates of return required by suppliers of venture capital for investments with similar technical and commercial risks. This assumption is reviewed as part of the valuation process outlined above.
Expected unit sales prices:Expected market sale price giving consideration to comparable products available in the market place and a value based pricing assessment. This assumption is reviewed as part of the valuation process outlined above.
Expected sales volumes:Expected sales volumes of the most comparable products currently available in the market place. This assumption is reviewed as part of the valuation process outlined above.
Probability of success and payment:Expected cash flows used to measure contingent consideration are risk adjusted for the probability of successful development of products and payment provisions with the agreement. These assumptions are reviewed as part of the valuation process outlined above.
Within the contingent consideration provision, the Group recognized a derivative financial liability in relation to a milestone paid within contingent consideration. The contingent consideration was paid in January 2025 through the issuance of shares, which was subject to a 12-month lock-up period. If the share price decreased over the lock-up period an additional payment equal to the reduction in the share price multiplied by the amount of issued shares under the milestone payment was required to be paid. In January 2026, the lock-up period ended and $2.4 million was recorded in trade and other payables in relation to this derivative financial liability. The fair value of the financial derivative as of June 30, 2025
was calculated using the Black-Scholes valuation method. Key terms of this financial derivative are included below. The following assumptions were based on observable market conditions that existed as of June 30, 2025:
(in U.S. dollars, except percent data and as otherwise noted)
Assumption
As of June 30,
2026(1)
As of June 30,
2025		Rationale
Share PriceN/A
A$1.62
Closing share price on valuation date from external market source
Exercise priceN/A
A$3.15
Market price on initial payment date
Expected TermNil
7 months
Lock-up period
Dividend YieldN/A0%Based on Company’s nil dividend history
Expected VolatilityN/A73.57%Based on historical volatility data for the Company
Risk Free Interest RateN/A3.47%
Based on the closing U.S. treasury issued 5 years bonds on valuation date
Fair value per shareN/A$1.0033Determined using Black-Scholes valuation model with the inputs above
Fair valueN/A$10,262,224
Fair value of $Nil as of June 30, 2026. Fair value was $10,262,224.00 as of June 30, 2025.
(1)
In January 2026, the derivative financial liability settled when the lock-up period ended and an amount payable of $2.4 million was recorded in trade and other payables in relation to this derivative financial liability.
As of June 30,
The fair value of contingent consideration (in U.S. dollars, in thousands)
20262025
Fair value of cash or stock payable, dependent on achievement of future late-stage clinical or regulatory targets7,352 10,778 
Fair value of financial derivative liability— 10,262 
Fair value of royalty payments from commercialization of the intellectual property acquired— 739 
7,352 21,779 
(vi)    Warrant liability
(in U.S. dollars, in thousands)As of June 30,
Warrant liability20262025
Opening balance5,724 4,647 
Warrants fair value at grant date - December 30, 20253,961 — 
Remeasurement of warrant liability(859)4,962 
Exercise of warrants— (3,885)
Foreign currency translation reserve86 — 
Closing Balance8,912 5,724 
On November 19, 2021, in connection with the drawdown of the Oaktree debt, Oaktree were granted the right to warrants to purchase 1,769,669 ADSs at US$7.26 per ADS, a 15% premium to the 30-day VWAP. Given that Oaktree received an unconditional right to the warrants on November 19, 2021, this date has been determined as the measurement date. The warrant instruments were issued on January 11, 2022, following the required administrative process, and these warrants may be exercised within 7 years of issuance of the warrant instruments. The warrants do not confer any rights to dividends or a right to participate in a new issue without exercising the warrant.
On December 22, 2022, the Group amended the terms of the loan agreement with Oaktree and in connection with the loan amendment, Oaktree was granted warrants to purchase 455,000 ADSs at $3.70 per ADS, a 15% premium to the
30-day VWAP. The Group determined that an obligation to issue the warrants arose from the time the first amendment to the loan agreement was signed; consequently, a liability for the warrants was recognized in December 2022. The warrants were legally issued on March 8, 2023 and may be exercised within 7 years of issuance.
On January 5, 2024, the ratio under Mesoblast's American Depository Receipt ("ADR") program was changed from 5 ordinary shares representing 1 ADS (5:1 ratio) to a new ratio of 10 ordinary shares representing 1 ADS (10:1 ratio). As a result of this ratio change and as a result of completing the pro-rata accelerated non-renounceable rights issue in December 2023, the number and exercise price for the warrants was adjusted in accordance with the terms of these warrants. The warrants issued in November 2021 changed from 1,769,669 ADSs at US$7.26 per ADS to 884,838 ADSs at US$14.36 per ADS. The warrants issued in December 2022 changed from 455,000 ADSs at US$3.70 per ADS to 227,502 ADSs at US$7.24 per ADS.
In January 2025, the Group issued 2,275,020 ordinary shares to Oaktree     for the exercise of 227,502 ADS warrants that were issued in December 2022. One ADS warrant is equivalent to 10 ordinary shares. The fair value of $3.9 million relating to the warrants exercised and the exercise price of $1.6 million were recognized as issued capital within the equity statement.
On December 30, 2025, as part of the new $125.0 million five-year credit-line facility, warrants were granted to purchase 3,225,756 shares or 322,576 ADSs under a 1‑for‑10 ADS ratio, at A$3.20 per share, a 15% premium to the 30-day VWAP, with the ADS price calculated using the USD spot rate at the time of exercise. The Group has determined that an obligation to issue the warrants has arisen from the time the credit-line facility was signed; consequently, a liability for the warrants was recognized in December 2025. The warrants may be exercised within 5 years of grant. The warrants are subject to shareholder approval and have not yet been legally issued at the date of this report. The warrants are classified as a current financial liability and measured at FVTPL, as their settlement terms create variability in proceeds and may require cash settlement and they may be exercised anytime following shareholder approval.
The exercise price of the warrants will be received in US$, which is different to Mesoblast Limited’s functional currency of A$ which gives rise to variability in the cash flow. As a result, the warrants are classified as a financial liability in accordance with IAS32 Financial Instruments: Presentation. The financial liability is recorded in warrant liability at fair value at grant date and subsequently remeasured at each reporting period with changes being recorded in the Consolidated Income Statement as remeasurement of warrant liability. The warrant liabilities are considered level 3 liabilities as the determination of fair value includes various assumptions about the share prices and historical volatility as inputs.
As of June 30, 2026, 2025 and 2024 respectively, the fair value of warrant liability was $8.9 million, $5.7 million and $4.6 million, respectively. During the years ended June 30, 2026, 2025 and 2024, the Group recognized a remeasurement gain of $0.9 million, a remeasurement loss of $5.0 million and a remeasurement gain of $0.8 million, respectively, in the Consolidated Income Statement on the remeasurement of warrant liability.
(vii)    Fair value of warrants recognized as liabilities
The warrants granted are not traded in an active market and therefore the fair value has been estimated by using the Black-Scholes valuation method based on the following assumptions.
Key terms of the Oaktree warrants are included below. The following assumptions were based on observable market conditions that existed as of June 30, 2026 and 2025.
(in U.S. dollars, except percent data and as otherwise noted)
Assumption		As of June 30,
2026		As of June 30, 2025Rationale
Share Price$13.53$10.89Closing share price on valuation date from external market source
Exercise Price$14.36$14.36As per subscription agreement
Expected Term
2.5 years
4 years
As per subscription agreement
Dividend Yield0%0%Based on Company’s nil dividend history
Expected Volatility91.04%93.43%Based on historical volatility data for the Company
Risk Free Interest Rate4.34%3.99%
Based on the closing U.S. treasury issued 7 year bonds on valuation date
Fair value per warrant
$7.3480
$6.4688
Determined using Black-Scholes valuation model with the inputs above
Fair value$6,501,806$5,723,883
Fair value of 884,838 warrants of $6,501,806 as of June 30, 2026 and fair value of 884,838 warrants of $5,723,883 as of June 30, 2025

Key terms of the warrants granted as part of the credit-line facility are included below. The following assumptions were based on observable market conditions that existed at the grant date and as of June 30, 2026.
(in U.S. dollars, except percent data and as otherwise noted)
Assumption		As of June 30,
2026		At Grant date -
December 30,
2025		Rationale
Share PriceA$1.96A$2.80Closing share price on valuation date from external market source
Exercise priceA$3.20A$3.20As per subscription agreement
Expected Term
5.5 years
6 years
As per subscription agreement
Dividend Yield0%0%Based on Company’s nil dividend history
Expected Volatility72.95%73.50%Based on historical volatility data for the Company
Risk Free Interest Rate4.40%4.29%Based on the closing Australian Government issued 5 year bonds on valuation date
Fair value per warrant$1.0878$1.8298Determined using Black-Scholes valuation model with the inputs above
Fair valueA$3,509,103A$5,902,568
Fair value of 3,225,756 warrants of A$3,509,103 (US$2,410,403) as of June 30, 2026 and of A$5,902,568 (US$3,961,213) as at grant date December 30, 2025.