Mesoblast issues $139 million in stock to Cephalon

Regenerative medicine specialists Mesoblast plans to diversify its product offerings in adult stem cells funded by an additional $139 million in cash raised through the issuing of 24.7 million shares to its US partner company Cephalon.

This brings Mesoblast's cash reserves to around $280 million.

Mesoblast held an extraordinary general meeting of shareholders on 9 February in which the transaction was approved by an overwhelming majority of shareholders.

This brings Cephalon's stake in Mesoblast up to the 19.99 per cent agreed in the deal made in December last year.

According to Mesoblast CEO and Managing Director Professor Silviu Itescu, the company will use the cash to "to significantly broaden our range of product offerings for the treatment of major diseases."

Mesoblast is targeting three main markets: cardiovascular and neurodegenerative diseases; inflammatory and immune diseases; and orthopaedic products.

Mesoblast (ASX:MSB) was flat in morning trading, up 1c to $5.58 by midday.