Mesoblast (ASX:MSB) is a world leader in the development, manufacture and commercialisation of biologic products in the broad field of regenerative medicine.

MSB has the worldwide exclusive rights to a series of patents and technologies developed over more than 10 years relating to the identification, extraction, culture and uses of adult Mesenchymal Precursor Cells (MPCs).

MSB’s stock has been one of the hot stocks since the start of the year on market excitement over the therapeutic power of MPCs.

A unique business

The commercialisation of MPCs allows adult stem cells to be extracted from the bone marrow of donors, grown into therapeutic quantities and administered to non-related patients.

MSB’s lead products will target cardiovascular conditions, diabetes, inflammatory conditions of lungs and joints, eye diseases, bone marrow cancers, bone fractures, cartilage degeneration and musculoskeletal conditions.

The company aims to generate a series of high margin, off-the-shelf adult stem cell products that are obtained from a single donor, commercially expanded and frozen, and subsequently used in potentially thousands of unrelated, or allogeneic, recipients at the time and place of need.

Bone marrow approval

Mesoblast recently received approval from US authorities to begin an advanced trial of a treatment that could boost the number of bone marrow transplants for patients who cannot find a matched donor.

Following the approval, MSB has commenced the Phase III trial for bone marrow regeneration in patients with blood cancers.

MSB aims to produce a product that can be used in bone marrow transplants where a perfectly matched donor cannot be found.

Hearty hopes

Another key driver for MSB will be the results of its Phase II congestive heart failure trials in November.

Clinical results have thus far been encouraging, and if the full results turn out to be positive, MSB is likely to request a Phase III trial from the US Food and Drug Administration (FDA).

We believe a positive Phase II result will help deliver a significant jolt to MSB’s share price, as it moves the group closer to receiving regulatory approval to market its product.

Moreover, given the large number of reported heart problems in the US, Phase III approval can open up a huge market for MSB.

The Lonza and short of it

On 27 September, MSB announced an alliance with Swiss-based Lonza Group for the clinical and commercial production of its MPC product.

Under the deal, Lonza will supply MSB’s product requirements, in return for MSB having exclusive access to Lonza’s Cell Therapy facilities in Singapore.

The alliance is a critical plank in Mewsoblast’s strategy to market its product, as it creates certainty in the ability of the group to manufacture its MPCs.

Another interesting aspect of the alliance was Lonza using its intellectual property to help lower MSB’s manufacturing costs.

This would be in keeping with MSB’s aims to generate higher margin products, and would also provide it with the flexibility to develop new technologies.

Looking ahead

Whilst market excitement grows surrounding the therapeutic potential of MPCs, MSB has turned heads with its unique product innovation.

With regulatory approvals continuing to roll in and a global manufacturing alliance locked in, MSB is in a good position to bring its MPC technology to market.

The bone marrow product could be the company’s first revenue generating biologic therapy in the US and Europe.

MSB has huge revenue potential and exclusive rights to a series of patents and technologies relating to MPCs.

Furthermore, a successful outcome for MSB’s Phase II congestive heart failure trial could make MSB one of the stocks to watch in coming weeks.

Receive FREE Trading Recommendations for the next 7 Days, Click Here!

   Written by: admin   Other posts from: admin

McMillan Shakespeare (ASX:MMS) is the leading provider of independent salary packaging services in Australia.

The group’s primary services include: salary packaging, remuneration policy design, motor vehicle lease management, information retrieval, procurement of motor vehicles and finance and administration of fuel card and service maintenance programs.

MMS occupies a unique market position: it is the only integrated provider of salary packaging and “company car” solutions, and its services are seeing a lot of demand.

Recent acquisitions have helped MMS win new lucrative business contracts.

The benefits are reflected in its strong business momentum which saw MMS report solid first half earnings.

The salary packaging scene

Salary packaging is a lucrative business. Australia’s taxation system allows tax concessions for certain employee benefits and for certain industry sectors, which makes salary packaging attractive.

Eligible employees increase their disposable income by using pre-tax salary to pay for goods or services. They also use these benefits to attract and retain staff in a tight employment market.

Existing payroll systems do not cope well with salary packaging, and this is where MMS comes in.

McMillian Shakespeare administers budgets; deducts pretax salary; makes payments to service providers on behalf of an employee; and accurately reports transactions for tax purposes.

A high transaction load, a complex business process and the tax implications leads many employers to outsource this task to MMS.

Likewise, fleet management is a complex and capital intensive task. Many corporations choose to outsource management and/or lease their fleet using MMS.

First Half results

MMS saw its NPAT and EPS for the first half rise 83% on year. NPAT for the period came in at $20.5 million and EPS at 30.3 cents per share.

An interim dividend of 16 cents per share was declared, up from 10 cents a share on year.

Its Asset Management business recorded a NPAT of $6.6 million.

First half performance in its asset management segment exceeded expectations.

Asset Management capability has opened up significant new opportunities in the private sector for Group Remuneration Services. This has been a largely untapped market for MMS.

The company has been focusing on integration; maintaining momentum in its core business; and disciplined prioritisation of tasks and opportunities.

New business wins and cross sells continue to build momentum.

Looking ahead

MMS runs a unique business that is able to grow even during economic downturns, with the market running at 3-8% per annum.

A combination of the Group Remuneration Services business with the Asset Management business is helping to create a different and more capable organisation.

The company has been able to capitalise on demand for salary packaging and fleet management services, which involve a complex business process as well as tax implications, leading many employers to outsource this task to MMS.

Continued, disciplined development of its core business combined with increasing participation rates within its existing customer portfolio will help MMS going forward.

The company’s FY11 earnings may expectations given the typical seasonal bias favouring the second half of the year.

MMS has been one of the shares to buy since early 2009 and future growth will be sustained by the group’s alliance with big-name (including government) clients and new contracts.

For Complementary Stocks to Buy Advice, click here.

   Written by: admin   Other posts from: admin

Perilya (ASX:PEM) is a mining and exploration company and is among the top 20 global producers for zinc and the top 10 for lead production.

PEM is investing substantially in the development of its three major projects located in the Broken Hill (New South Wales), Mt Isa (Queensland) and Flinders (South Australia) regions as well as exploration in the surrounding tenements.

The group is 52%-owned by Shenzhen Zhongjin Lingnan Nonfemet, China’s third largest zinc producer.

The company has rapidly grown from a junior explorer to a company with two operating mines, substantial cash reserves, and investments in other resource companies.

It has also been one of the hot stocks since late February, having surged more than 40% from that month’s lows.

PEM has a wide exposure to base metals and gold. Whilst most commodities have gained strength of late, this diversification helps PEM flourish during bearish economic times (which drives up gold demand) and during times of economic strength (which drives up copper prices).

Regional operator

PEM is the operator of the Broken Hill zinc, lead, silver mine in NSW and the Flinders zinc silicate project in South Australia.

The company’s Broken Hill mine went through a resizing in 2008, resulting in a significant improvement in productivity and cashflows and an extension to the mine’s life by at least 10 years.

Perilya has an active exploration and development program covering Broken Hill and Flinders (in South Australia, in the vicinity of its Beltana zinc silicate project).

At present, PEM is reviewing options for the development of the Mount Oxide Copper and Cobalt Project in the Mount Isa region in Queensland.

PEM recently announced a new mineral resource estimate for the Moblan Lithium Project in Quebec, Canada, which has more than doubled the earlier mineral resource for the project.

Diversified resources

PEM, especially now with its acquisition of Globestar, is exposed to a very wide range of metals, including lead, zinc, lithium, nickel, silver, copper and gold.

Copper price has been steadily strengthening on signs of a global economic recovery, whilst nickel prices on the London Metals Exchange averaged US$9.49 a pound this year against US$5.67 last year.

Copper prices should rise as mine production fails to keep up with rising global demand, creating supply-and-demand issues.

Gold has gained significantly this year, reaching an all-time high of $1,624 an ounce last night, as the US debt crisis remains unresolved.

The Globestar acquisition further diversifies PEM’s metals portfolio. The Moblan Lithium Project in Quebec is looking to benefit from forecast future demand for lithium in electronic products, particularly in electronic car batteries.

Demand from China is set to drive the boom. Lithium usage in electronics has already grown 25%-30% from 1999-2008.

Quarterly report

For the June quarter, PEM saw net cash costs at its Broken Hill operation come in at below market guidance.

Production levels for the quarter saw combined metal production of 30,000 tonnes of contained zinc and lead coming in line with guidance.

PEM reiterated annualised production guidance of 110,000-120,000 tonnes of combined zinc and lead.

At June 2011, PEM held cash, deposits and investments totalling $117.9 million.

Looking ahead

PEM’s diversification and growth strategy has reduced its reliance on the Broken Hill Operations as its sole source of revenue and increased its ability to withstand external shocks.

The miner does not feel the proposed carbon tax will have any material impact on its Australian operations.

PEM is a low-cost mining and exploration company which is invested heavily in Australia but also has overseas exposure, most recently via its acquisition of GlobeStar.

GlobeStar’s Canadian lithium operation adds to PEM’s already-impressive metals portfolio.

The company has rapidly grown from a junior explorer to a company with two operating mines, substantial cash reserves, and investments in other resource companies.

PEM is one of the stocks to watch.

Click to Receive FREE Recommendations for 7 Days

   Written by: admin   Other posts from: admin