It is just past the appointed time, and as we have a quorum present in the room, it is my pleasure to now declare the 2024 Annual General Meeting of Mesoblast Limited formally open and to welcome you on behalf of my fellow directors. We're very pleased you have joined us in person today and welcome the opportunity to update you regarding the achievements of our company in the last year. In addition to shareholders present in the room, this AGM is being webcast for those who have not been able to attend in person. I welcome the listeners to this webcast. If in the unfortunate situation we experience technical issues that impact the meeting, I will make an assessment of the circumstances and then communicate further with you.
In the event we take steps to adjourn the meeting, we will make an announcement to the ASX with all relevant details. Before we proceed with the meeting, there are a couple of housekeeping matters to address. I would appreciate it if all mobile phones could please be turned to silent mode. In addition, recording devices and cameras must not be used during the meeting. First, I would like to introduce my fellow directors of Mesoblast. In the room, we have Dr. Silviu Itescu, our Chief Executive Officer. Joining us by audio conferencing, we have Dr. Eric Rose, our Chief Medical Officer and Executive Director, Mr. Philip Facchina, Chair of the Audit Committee and Risk Committee, Dr. Philip Krause, our Non-Executive Director, and Mr. Joseph Swedish, a Non-Executive Director.
In addition, we have another Non-Executive Director who is based overseas and unfortunately not able to join us today, and that is Mr. Bill Burns, Chair of the Nomination and Remuneration Committee. I'm also pleased to say that we have a number of key executives here today. I ask each executive to stand briefly when I introduce them: Mr. Peter Howard, General Counsel and Corporate Executive, Mr. Andrew Chaponnel, our Interim Chief Financial Officer, Mr. Paul Simmons, Chief Scientific Advisor, Ms. Dina Pratt, Head of Human Resources, also Ms. Niva Sivakumar and Mr. Paul Hughes, our Joint Company Secretaries. They will be available to speak to you at the completion of the meeting. In addition, joining us by audio conferencing from the United States, we have Ms. Geraldine Storton, Head of Regulatory Affairs and Quality Management. Finally present today is a representative from the Company's Auditors, PwC, Mr. John Roberts.
I'd now like to outline the order of business that will be undertaken today. First, I will say a few words about the past year for Mesoblast. Dr. Itescu will then provide an update on the operational and strategic developments of the business. Shareholders will have the opportunity to ask Dr. Itescu questions about the business following his presentation. After his presentation, I'll go through some procedural matters before moving to the resolutions outlined in the notice of meeting. Although most of the meeting is formal in nature and restricted to the resolutions detailed in the notice of meeting, we hope that after those in attendance will join us for informal discussions and light refreshments. So, shareholders. Shareholders, it is a pleasure to deliver my first address to you as Chair of this innovative and exciting company.
This year has seen our company making significant advances as a leading developer of innovative allogeneic cellular medicines with an extensive clinical stage pipeline of therapeutic assets validated by clinical data that address serious and life-threatening inflammatory illnesses. Our key areas of focus remain cardiovascular disease, chronic low back pain, and acute life-threatening inflammatory conditions, including graft versus host disease. Through the leadership of our Chief Executive Officer and Managing Director, Dr. Silviu Itescu, and his team, we've made tremendous strides in the past year in our engagement with regulators in clinical development of our lead products and in preparedness for product commercialization. 2024 has been pivotal in our journey towards commercializing our therapies.
Our positive interactions with the United States Food and Drug Administration allowed us to resubmit the Biologics License Application for approval of Ryoncil for steroid-refractory acute GVHD in children and work towards filing for accelerated approval of Revascor in end-stage heart failure patients. As the current review for approval of Ryoncil progresses, our focus has turned to implementing the commercialization strategies that will allow us to successfully launch Ryoncil, a much-needed treatment for desperately ill children, upon FDA approval. In addition, we received a number of important designations from the FDA for our program in congenital heart disease, including a Rare Pediatric Disease Designation , and we commenced the pivotal Phase III trial for chronic low back pain and expect to accelerate patient enrollment across multiple centers in the U.S. over the coming year.
Our balance sheet has been well managed, including recently securing $50 million to fund our planned commercial launch on approval of Ryoncil, while at the same time maintaining financial discipline through the implementation of cost reduction strategies to maximize our financial runway. I'd like to express my sincere thanks to our shareholders for your continued trust and support. It is much appreciated. Furthermore, I'd like to acknowledge the significant contribution from my predecessor and retiring board member, Mr. Joseph Swedish, who admirably chaired the company from 2019 to April 2024. As we plan for 2025 and beyond, I'm very optimistic about Mesoblast's future. The strength of our science, the dedication of our impressive team, and the support of our shareholders position us to achieve our goal of delivering transformative therapies to patients in need.
Together, we are on the cusp of realizing the full potential of Mesoblast's transformative allogeneic cellular medicines, and I look forward to sharing our success with you in the year ahead. Now, I will hand over to our Chief Executive, Dr. Silviu Itescu, who will provide a detailed presentation on our corporate strategy and operational highlights.
Thank you very much, Jane, and welcome to everybody here today. If I could go to the next slide, please. Next slide. Okay. This has been a very exciting 12 months, and I think I just want to start out by, again, saying that we're an innovative company. We're developing cutting-edge cellular medicines to target some of the worst and most serious and life-threatening inflammatory diseases where alternative approaches, small molecules, monoclonal antibodies, just don't work, and our lead product, which we hope to have FDA approval in a very short amount of time, is testament to that approach to medicine. Next slide, please. Next slide. Okay. At a high level, we're a world leader in developing off-the-shelf or allogeneic cellular medicines for the most life-threatening and serious diseases. We're obviously listed dually on NASDAQ and on the ASX. We have locations in multiple areas.
We have a very robust intellectual property estate, and we've got capabilities of manufacturing that have already been inspected by the FDA and that are state-of-the-art. Next slide, please. Now, this slide is my only slide that relates to really the fundamental science of the platform technology, but I think it just bears focusing on the fact that our cells, so-called mesenchymal precursor or stromal cells, are present in all of us in very, very, very small numbers. But their lot in life is really to have, through their receptors on their surface, be able to respond to multiple inflammatory cytokines. So when they're present in a diseased organ where you've got excessive inflammation, they get activated, and when they get activated, they release multiple factors like a concert master that turns off the various arms of the immune system that cause the devastating disease that we're trying to fix.
And so unlike monoclonal antibodies, which everybody's familiar with and that target individual pathways, for example, anti-TNF or anti-IL-6 or anti-IL-1, which are well-established drugs, blockbuster drugs in the market, unlike each of those, our cells are able to target all of these pathways in a scenario which is concurrent and concomitant, which makes them much more likely to be able to tame that wildfire of an inflammatory disease in a way that single pathway inhibitors just cannot. That obviously has real implications for how diseases of inflammation can be best addressed by our therapy. Next slide, please. We have commercial-scale manufacturing processes and facilities. Our current manufacturing process has been inspected by the FDA without any concerns. But beyond our existing manufacturing process, we have proprietary technologies that allow us to use animal-free media.
We have proprietary technologies that allow us to scale up and scale out, meaning make more and make more in a more efficient way, and particularly the potential use as we move forward for bioreactors, small 3D machines that allow us to make high-volume products to meet the supply chain requirements of the large-volume indications beyond the first and second indications that we will be talking about a little bit later. Next slide, please. Now, intellectual property is critical to the lifeblood of the company and to the lifeblood of any biotechnology company, and we're the leaders in this space. We've got more than 1,000 patents granted and working their way through in various jurisdictions, in all of the major jurisdictions, actually, certainly the U.S. and Europe and Japan and other areas.
These patents relate to compositions of matter, to methods of manufacturing, and to all of the indications that we are commercially developing. Our leadership position in the intellectual property space has already been tested by a large pharma who've been required to take licenses from us to have their particular products potentially work their way through commercial channels. We're very confident and very strong in our intellectual property position that we can protect our products and protect our exclusive markets globally. Next slide, please. Now, this slide is a snapshot of our lead product candidates. We're developing two platform technologies, each of which has multiple products that are derived from them and multiple indications that allow them to be addressed.
Our Remestemcel-L platform is what we would call our second-generation technology that is the basis for Ryoncil, our lead product for pediatric and adult graft versus host disease and for other indications. Our third-generation platform is called Rexlemestrocel-L, which is based on using monoclonal antibodies to isolate to even greater homogeneity and potency, the earliest precursor of this lineage, and that allows us to move into even other areas of unmet need, including cardiovascular disease and inflammatory pain, where the product is locally delivered as opposed to our Ryoncil product, which is intravenously delivered. But what you're getting a sense of here is by having several platforms, we progressively improve the strength and the potency and the characteristics of the product.
We are able to delineate different products for different markets and obviously protect our ability to price differentially and protect our ability to have different strategic partners. So there's a whole strategy behind the use of progressively improving platforms and progressively differentiating the products that these platforms relate to. Next slide, please. Now, we have three key objectives in the coming 12-month period, and they're outlined here. The first, obviously, is to ensure that Ryoncil, our lead product for steroid-refractory graft versus host disease, is approved, is potentially then launched, and has a robust commercial plan for its launch, adoption, and market growth, and that's, by far, our number one focus in the immediate term. Our second area of focus is Rexlemestrocel-L for inflammatory back pain, and that's currently undergoing a confirmatory second Phase III trial to confirm the great results we saw in our first trial.
There'll be more news around that, but it's currently enrolling a 300-patient confirmatory study. And our third major objective is for Revascor, our product for cardiovascular disease that is now addressing both pediatric and adult cardiovascular disease, and I'll have Fabio to talk to you about that. But we see this as our next regulatory approval and go-to-market strategy, and there's a lot of focus that is behind the Revascor for cardiovascular program, and you'll hear a lot more about that in the coming 12-month period. Next slide, please. Now, financials are important. They always are for companies at our stage of development. We reported a cash balance as of September 30th of $51 million. These are all US dollars, of course, with an additional $60 million available to us through our existing facilities on FDA approval.
Our net operating cash spend was $10.5 million for the quarter end of September 30th. So we've made a very concerted effort to reduce our operating cash spend, 26% for the quarter relative to the comparative quarter. But I think the main message here is that we're very careful. We're managing our cash resources in a very pragmatic way whilst not skipping a beat in order to ensure that we have our lead product appropriately resourced for successful commercialization. In addition to this, on September 30th, we were very fortunate to enter into a convertible note subscription with our largest shareholder who has been tremendously supportive of the company. And that convertible note is at Mesoblast's sole discretion if we choose post-approval to raise up to $50 million in convertible notes on FDA approval.
So the objective of that really was to ensure that on approval, we seamlessly move the product into commercialization, ensuring that we were able to successfully launch, onboard the various sites that need to be onboarded and contracted, and ensure that the launch over the coming quarter will be successful, and we're not short on cash in any way. So I think what you're seeing is a very carefully managed balance sheet over the past 12 months. Many of our executives have, in addition to supporting the company strongly, taken stock in lieu of a substantial proportion of their salaries. And I think altogether, you're seeing us coming through a period of being a tough period, but I think we're looking towards a very successful 2025, subject, obviously, to FDA approving our product. Next slide, please.
Let me tell you a little bit about Remestemcel-L or Ryoncil, our lead product for steroid-refractory graft versus host disease. Next slide. This is under review by the FDA for approval in children first, and we have obviously our label extension strategy for adults. Next slide. GVHD, just in one slide, very, very complex disease, cytokine storm type of disease, and you're all familiar with that term since COVID. But this is a true cytokine storm disease where the bone marrow of an unrelated individual that is given to a patient after they've been successfully cured of an underlying leukemia, for example, and they get a bone marrow transplant to recover their immune system. Unfortunately, the bone marrow sees the patient as foreign and attacks their gut, their liver, their skin.
The immune cells that attack these various organs release multiple cytokines, and it's the cytokines that destroy and ultimately result in a fatal outcome. What our cells can do is interrupt that whole process. Next slide, please. There's about overall 30,000 of these types of transplants worldwide, of which about 10,000 occur in the U.S., the largest market, and about 1,500 children undergo this process. I have to emphasize that children who get this disease have no approved therapies and represent the largest immediate unmet need. Next slide, please. Now, in various of our studies, and we've performed multiple studies now in children that we've presented over the last few years, what we show is that we see a substantial survival benefit in children that is significantly higher across three different studies than contemporaneous controls. We've published this. We've talked about it publicly.
The FDA has acknowledged these results. Next slide, please. When one compares the best available therapy out there for children, these are again published data where you see a dismal outcome on survival at two years of no more than 35%. On the left, we see at two years at least 50% survival, and in fact, we now have long-term survival studies out to almost five years where we see that 51% at two years remains and persists right through the long-term survival outcome. What that says to us is that what we really have is a product that can cure these children. In other words, 50% of the children who are treated with our cells as an intense regimen for four weeks are alive at five years, which means they're cured of their underlying disease. Next slide, please.
This slide compares our survival outcomes through five years with published data across multiple studies in both children and adults. I think the whole point of this slide is to say that given that about 90% of the children who we treat or were in our Phase III trial were of the sickest version of this disease, so-called grade C/D disease, where mortality or survival is no more than about 25%-30% at one and two years. In fact, the various studies that I show you here show those types of survivals, but in fact, for patients who are much healthier, both children and adults. There are no long-term survival data. We have about a 50% survival rate of the sickest type of disease that you can possibly see out to five years.
That's kind of the analysis that the FDA has looked at, and on that basis, the FDA as recently as last March said that we don't require any further clinical data to confirm these observations. That was the basis for why we resubmitted mid-year our documents for approval. Next slide, please. As I said, we filed our documents in July. We've been given a so-called PDUFA date, goal date of January 7th. That's the latest that they can possibly make a decision by. We are in very active dialogue with the FDA, and we feel very confident about the way these discussions are going. They're very collegial, very collaborative. The FDA has already completed their inspection of our manufacturing that was done previously with no concerns.
We have extensive inventory already manufactured that should allow us to produce over the next couple of years plenty of product already for these desperately ill children. And if approved, we would be the first product that would be approved by the FDA for children with this devastating complication. Post-approval, we have a whole plan in place to extend the label into adults with almost as bad a disease, which I think is on the next slide. Next slide, please. Sorry, before I get there. So what is our plan, assuming that we have FDA approval in hand? We have already hired a number of select senior positions in the commercial sphere who are putting in place the various components of the go-to-market strategy. Our Market Access and Payer Outreach activities are well underway.
Our Medical Affairs group is providing education both to payers and to key opinion leaders at the various hospitals and sites. We're engaging with those centers that have the highest volume of enrollment, and of course, we know who they are because we've been providing product under expanded access for the past couple of years, and they are waiting for this product to be on market to be used on a routine basis, so we know exactly who the lead investigators are, and we're working with them on a regular basis. In addition to that, we're developing a whole range of activities, as you would expect, that are non-promotional in nature, but that are primarily focused on education of the physicians, the nursing staff, the administrators.
You would imagine that when this product is on market and it has certain reimbursement qualities, that those contractual arrangements will have to be put in place. That's a whole administrative requirement that both our teams are working through as well as the various hospitals and their administrators. Next slide, please. Post-launch, it'll be a staged approach based on highest volume and experience with our product. In other words, 15% sorry, 15 highest volume centers across the U.S. account for about 50% of pediatric transplant patients. We don't need a very large footprint of sales folks to address these sites. We expect that we will address them in waves, the first 50%, and then the rest of the sites in the subsequent quarters. I think it's a matter of onboarding and logistics at these sites and getting them certified to be able to get reimbursement.
Our supply chain is already in place. We manufacture. We ship from the manufacturer to our distributor across the U.S., the distributor warehouses the product, and then ships to the end user, subject to contracts and reimbursement. And that's really what we'll be focusing on for the bulk of the coming 12 months. Next slide, please. But I think it's just as important to focus on how we're going to bring this product to adults. And it would be no surprise to anyone that whilst we're getting many requests for children under expanded access, there are also requests coming in for adults under expanded access. There is a clear unmet need in adults with graft versus host disease. The only approved product in adults is ruxolitinib or Jakafi. That is approved in adults. It's not approved in children because it has a very high toxicity margin.
It causes bone marrow suppression, and it is not approved in children. But even in adults, it's approved as first line, but in fact, 40% or more of adults who receive it fail. They either fail because it doesn't work or because they've got adverse events and drug is discontinued. That is a very large market potential because published articles recently show that if you fail ruxolitinib, your likelihood of survival through three months is as low as 25%. And there are no other approved therapies. Under our expanded access program in adults who've received our cells after having failed ruxolitinib or other agents, we see closer to 70% survival. So those data are spectacular. They will be presented at a meeting shortly. And those data form the basis of going forward into a larger adult study.
We're working very closely with the Bone Marrow Transplant Clinical Trials Network, which is a body of about 80 clinicians across 80 hospitals in the U.S., funded by the National Institutes of Health. They've agreed to execute a trial across these sites. Single-arm open-label study should be relatively small, not much larger than the study that we've already executed in children, but with the objective to address these very sad adult patients who failed ruxolitinib. If we see the same sort of survival benefit as we've seen in the short-term outcome, then we're very confident we would get a label extension with the FDA to treat adults with this disease. Next slide, please. Let me move on. I think that's pretty clear about our short-term objectives with Ryoncil. Let me move on to our next generation product, the STRO-3 immunoselective product, Rexlemestrocel-L.
It's two major applications that we're developing for inflammatory back pain and inflammatory cardiac disease. In the back pain space. Next slide. Next slide, please. In the back pain space, this is a huge unmet need, really, really large unmet need. Over seven million patients across the U.S. and an equal number in Europe suffer from chronic low back pain due to inflammatory disc disease. So I'm not talking about muscular disease. I'm not talking about lots of other causes. It's a very specific cause, inflammation causing disc degeneration and chronic unremitting pain. Next slide, please. Sorry, just before we go. The important point about this disease is that 50% of opioid prescriptions across the U.S. are accounted for by patients who have this exact condition.
We all know about the opioid epidemic, and we all know about the risk of opioid overdose and death continues to be a major problem. This is the number one clinical disease that leads to that being an issue. Next slide, please. The patient journey on this slide tells you there just isn't much available. After you've gone through conservative treatments like nonsteroidal drugs or physical therapy, etc., the next step is opioids. That's why there's such a problem for the opioid addicted patients. Opioids have some improvement in pain. Not great. Not great. But other than opioids, the next thing is surgical intervention of one sort or another. Where we think that we fit in, we fit in before anyone ought to consider opioids. It's exactly where we want to target our patient population.
That's what our current Phase III and that's what the first Phase III was all about. Next slide, please. The results from the first P hase III trial, which we're aiming to replicate in our second Phase III trial, are highlighted on this slide. Notice, this is on the Y axis: the change in score in pain over time. On the X axis on the bottom, as you see it: month 6, month 12, month 18, month 24, month 36. This is long-term follow-up from one randomized controlled study. What you see in green, the top line, there's a little bit of an improvement in the first couple of months, and then it's flatlined, basically. Those are patients who got an injection of saline as a control.
In red, the bottom line is you see the formulation of the product that is currently in the second Phase III trial, which is an injection of a low dose of our cells together with a carrier molecule. What you see is that there's quite a dramatic reduction in pain, which is maximal at 12 months, and it's sustained for at least three years. Now, just to put into context, if you were to take opioids by mouth, you would look like the top line, the green line. That's about as good as you get in terms of pain reduction with opioids. That big difference between green and red is the superiority that we expect to see with our drug if we achieve the same endpoint relative to what opioids can do for this patient population.
But even more important than this, in this particular study, a subgroup of patients who were actually on opioids at baseline, something like 40% of the patients. And in that group of patients, despite being told, "Do not come off any of your drugs," about a third of the patients completely came off opioids by three years, compared to about 5% only of the control patients. So what we saw was not only a dramatic improvement of this type in terms of pain and durable improvement in pain, but it was accompanied by being able to come off opioids without even being asked as an endpoint. And so we think that that's pretty unique data that we want to go back and talk to the FDA around, quite separately from the overall approach to treating all patients. Next slide, please.
And so this slide is a summary of where we are with this product. We've got regulatory alignment with the FDA. We're in agreement around what the primary endpoint needs to be, which is a 12-month reduction in pain. And if we see that in this study, as we saw it in the previous study, the FDA has said that's an approvable endpoint. And product manufacturing has been completed for this study, and commercial manufacturing is now underway to be executed in parallel with this trial. And the trial is actively enrolling. And there'll be a lot more news about this in the coming few months. Next slide, please. And finally, I want to shift focus to our cardiovascular program, which has taken on a lot of new areas of focus in the past 12 months. Next slide, please.
As you can see here, Revascor, our trade name for this product for cardiovascular disease, has completed two Phase IIb/III trials in adults and has completed a randomized Phase II trial in children with congenital heart disease. Next slide, please. Now, I want to touch a little bit on the pediatric hypoplastic left heart syndrome, which is a severe congenital heart disease in children, because I think it's a very exciting opportunity for the company. Revascor has multiple mechanisms by which we thought that it might be beneficial for children with congenital heart disease, including the ability to induce new blood vessels, reduction in fibrosis, and reduction in inflammation. This is one of the most common of the congenital heart diseases, hypoplastic left heart syndrome.
It's a disease where the left ventricle is underdeveloped, and the child only really has a functioning right side of the heart, the big right ventricle. The current definitive surgical procedure is called the Fontan procedure. It's lifesaving, but unfortunately maintains only a functional right-sided ventricle for the rest of the child's life. And remember, these are children of two years old, two, three years old who have this procedure. So for the rest of their life really means the next decade, and that's still very, very short life. But really, the point of the current existing surgical approach is that the right side of the heart remains the only functioning one, and that results over time in progressive right-sided heart failure, liver congestion, liver fibrosis, and cirrhosis.
The creation of a permanent two-ventricle circulation, where there's a left ventricle that actually works, would avoid the complications of this standard Fontan procedure. Unfortunately, most children are not eligible to have such a procedure. In fact, only 30% of children are eligible because you need to have a left ventricle that's big enough to accommodate the ability to pump properly. And their left ventricle is small to start off with. Very few have a left ventricle that can accommodate this type of surgery. So we did a clinical trial with the lead group in this space at Boston Children's Hospital. They're the pioneers in this type of surgery.
The study aimed to evaluate whether Revascor, a single injection, a micro dose really of Revascor, a cardiac product, could increase the size of the left ventricle and increase the proportion of children who were then capable of receiving this type of permanent lifesaving two-ventricle surgery. The objective then would be to, in the longer term, have an outcome that avoids the problems with the Fontan surgery of right-sided heart failure and liver failure and cirrhosis. Next slide, please. We did a randomized controlled study of 19 patients, and what we saw was that a single intramyocardial injection of Revascor into the tiny left ventricle significantly increased the left ventricular systolic and diastolic volumes over a 12-month period compared with controls. That was published by the investigators.
What's important is that this substantial increase in the size of the left ventricle means that it facilitated the ability of the surgeon to do many more of these types of definitive biventricular surgeries, which allows the child to have a left ventricle that pumps. In fact, what we found was that 63% of the children with Revascor underwent definitive biventricular surgery compared with, as expected, only 34% of the controls. That's a substantial increase. It means that our cells were able to enlarge the ventricle enough that the surgeon's confident of doing the procedure that is ultimately lifesaving, but lifesaving in a way that in the long term will not result in the complications associated with right-sided failure and liver failure. Next slide, please. We took these results, and we went to the FDA and applied for both a Rare Pediatric Disease Designation and Orphan Drug Designations.
We received both of those this year. This is acknowledgment by the FDA that there's a very large unmet need and that this treatment can meet that unmet need. And importantly for us, a pediatric rare disease voucher means that on FDA approval, we're eligible to receive one of these vouchers, which then can be used internally to fast-track approval of another product or can be sold. And there's a whole market for these, substantial markets, and you might have seen Australian companies were involved in selling one of these vouchers for about $150 million. So these are important to have, and they're important to focus on. The other important point about this is that if you can get a voucher linked to the approval, you need to do that before the product is also approved for an adult indication.
So it has to be the pediatric indication needs to be approved first in order to receive the voucher. And that's why we're very much focused on getting this pediatric indication across the line with the FDA as quickly as possible. Next slide, please. Now, obviously, Revascor, beyond pediatric heart failure, has a much larger opportunity in the adult space. And heart failure is a major epidemic, of course, in the Western world. Inflammatory heart failure associated with ischemia accounts for about 60% of heart failure patients. And that's where our focus is. Next slide, please. And this is a little bit of a busy slide, but I think just focus on this is, again, the patient journey with heart failure. And for maybe 10 years of patients' lives, they're adequately treated through Class II with various drugs. And there's a lot of drugs on the market, some generic.
More recently, there have been a number of new heart failure drugs, all of which deal with volume overload and make patients feel better, symptomatically improve, and keep them out of hospital, and these include SGLT2 inhibitors and other drugs like those, so you would have heard about those, but sooner or later, and let's say over a 10-year period, patients inevitably progress to Class III , Class IV heart failure. At that point, despite having been on all of these oral agents, they suddenly transition to having a very high risk of mortality. In fact, mortality is as high as 50% over five years once you're beyond Class III. That's where we come in, and those are the patients that we've addressed across two large studies, randomized controlled, the so-called DREAM Heart Failure trial in 537 patients, and the even more advanced population, the LVAD studies, most recently 159 patients.
These are all randomized, placebo-controlled, and the results of some of these have been published, actually. Next slide, please. And in the Journal of the American College of Cardiology, which is the premier cardiovascular journal last year, this was the first study that demonstrated that in our DREAM Heart Failure population, we reduced overall mortality and heart attacks and strokes, which are the main complications, not really well addressed at all by traditional heart failure drugs. We reduced those by over 50%, particularly heart attacks and strokes. And you can see that on the slide on the right. We were particularly pleased to see these results because these remain the major unmet needs. We have a further follow-up study from this to identify the highest risk category group, which is the ischemic inflamed group, and where we see a substantial reduction in mortality.
Those results will be published in a very high-impact journal very shortly. Next slide, please. And we took those results and took the parallel results from the even sicker patients who were being kept alive by an artificial heart, the LVAD patients. And we took our results in total and met with the FDA earlier this year. And we demonstrated, I think, very convincingly that in the group of patients with inflammation and ischemia, which accounts for about 50%-60% of all of the patients we've treated, there's a continuum of evidence of efficacy in terms of reduction in mortality and improvement in morbidity.
And when you look at the totality of those data, the FDA was persuaded that we had solid data in terms of mechanism of action, solid data in terms of outcomes, and agreed that we had sufficient data to file for accelerated approval in the patients who were being kept alive by these LVADs as a first entry point into the marketplace with a commitment to do a confirmatory further study. And that's where we're working very much in terms of positioning our product for an accelerated approval. As I mentioned earlier, though, in sequence to the pediatric product that needs to come in first. Next slide, please. And I think I might stop on that note, and hopefully, it's given you a sense of the breadth and depth of what we're doing.
But again, let me just reiterate that our number one focus and our most urgent focus is on getting the launch right of Ryoncil for pediatric GVHD. And we're very excited to, hopefully, in the short term, hear some positive news from the FDA. Thank you. Any questions to either of us?
Yes, Christian, would you identify yourself, please?
My name is Damien Wise. My company, Bramin Park , is the shareholder. I'm just wondering if Donald Trump's election and his intentions to downsize a lot of the government is going to have an impact on FDA and therefore impact on Mesoblast?
Thanks for that. There's no reason to think that anything that we're doing is in any way likely to be impacted by any of the changes. Again, I think what we're seeing is that our interactions with the FDA have been terrific. The leadership at the FDA has acknowledged the strength of our data, both clinically and manufacturing-wise, and I think we will continue to have multiple positive engagements with the FDA in the short term.
Yes.
Do you know how many people in the world need this sort of treatment, particularly your first one?
I think you're referring to the bone marrow transplant product. So there are 30,000 people at the moment who are getting these transplants. About 50% of them suffer with this disease, right, but that's a growing population. As treatments for leukemia, because leukemia is 80% of the reason that people get transplants, as treatments for leukemia improve, more and more people will need bone marrow transplants. One of the major limitations to the number of transplants is the concern people have that if they get this disease, there aren't treatments for it.
As physicians get more comfortable that a treatment like ours offers curative outcomes, again, I think there'll be more confidence to be doing transplants even when they're not quite genetically matched, which is the risk factor for getting GVHD. So this is a growing unmet need.
Thank you.
Yes, Christine, here? Can we have the roving mic? And please identify yourself.
I was just wondering specifically about lung GVHD because I think it's a lot more common than we're told. If you're seeing a trend to less lung GVHD in the EAP, and specifically, I couldn't break out the under 65s in the paper, if they're doing better after four years in relation to the standard of care group in terms of anything that would speak to lack of fibrosis?
I think lung GVHD is an under-recognized complication. I agree with you. We've had a number of children that we've treated for lung GVHD that have done very well. That's anecdotally, right? We also had, during the COVID wave, quite a few children who had lung COVID, which is not so different mechanistically from lung GVHD, similar type of severe inflammation. And again, anecdotally, we had some very, very good responses. So I think lung GVHD is a big problem. Your question was with respect to the long-term survivors?
Yes. If you're seeing a general trend like less hospitalization and things like that.
So I think an important point, okay, so the four and five-year survivorship, the early deaths, which I mean, those who've lived five years are cured of the disease. The early deaths were due to very severe GVHD that occurred probably before our cells had enough of a chance to induce remissions. So they were early deaths.
We don't really see late deaths, and we certainly don't see tumor relapse rates. A big concern in this field is over-immune suppression, right? So lots of anti-T-cell approaches like OKT3 or ATG that were tried over the years were effective in terms of wiping out the immune response, but also wiped out the anti-tumor T-cells, very high incidence of tumor relapse rates. So we get immunosuppression that controls the T-cell response without actually causing any type of depletion of anti-tumor T-cells. And I think that's a very important difference. The other thing is, as we're part of our review process with the FDA, we've had to look at our safety data in great detail. And unlike a couple of years ago, there's now a comparator out there, Jakafi or ruxolitinib's package insert, looking at their safety data.
And when we look at our own safety data in the same way that they look at theirs, they have a very high incidence of bone marrow toxicity, 50%-60% or more of thrombocytopenia, platelet count reduction, hemoglobin reduction, white count reduction associated with severe complications such as bleeding or such as infections. When we look at our data in exactly the same way, the same methodology, we get low single digits, for example, of marrow toxicity. Very, very few patients, if any, have to discontinue our drug because of side effects. And so when you look at those two things side by side, you see how safe our product is. And we're very confident that as it goes out commercially, we will have a big advantage over alternative standard of so-called standard of care. I wouldn't call them standard of care. They're alternative therapies.
Yes. Over there.
Thank you, Dr. Itescu. My name is Lolita, just a minor shareholder, I guess. My question to you is, before I actually raise my question, first of all, congratulations to you and your team. You guys have done a tremendous amount of work over the last 12 months, which is great. My question to you is regarding Ryoncil. You've been through these BLA reviews with the FDA for the last couple of times already. I guess FDA was critical of your work on a couple of instances. What has changed this year, and has the color of those conversations started to change with the FDA? And now, do you think they're coming to terms in terms of the quality of your clinical trials and the product that you're trying to bring to the market, please?
That's a very complex question you've asked, right? Look, I think that when we first went in front of the FDA, they also had the ruxolitinib data that they were in the midst of approval, right? And I would say that ruxolitinib was then approved. And there may have been some expectation that it would perform better than it has or that it would be safer than it potentially is or that it would be widely taken up in children.
It hasn't been, right? And I would say that's been part of the hesitancy in approving us going forward. I would say even as recently as a year ago, there were probably people who wanted to see confirmation of our clinical data. And I would say in the last 12 months, as we've engaged with the FDA very closely, we've aligned that the data are extremely powerful, very persuasive, very safe. And we will, of course, do additional studies. But that's not a reason to hold up this lifesaving therapy for children. And that's why I think you're seeing a very different approach to our interaction and to the FDA's view of us.
Great. Thank you very much. Appreciate it.
Graham's my name. I also congratulate you, Silviu, and the team over the last year or so. It's been a journey, to say the least. My question relates to in the heart space. I'm right in saying that we were expecting a meeting with FDA this quarter in terms of how we progress that application. Has that happened? And if not, do we have a date when that may be happening and any feedback on that?
What I tried to outline is that while we were intending to meet and talk about an accelerated approval filing for adults, what has intervened in between is the strength of the pediatric data and the way the FDA has come back to us on the pediatric designation, etc. So strategically, we've decided to push forward with a pediatric potential filing first. And that's the focus in our upcoming discussions with the FDA. And then beyond that will be the adult piece. And that's for strategic reasons.
Okay. Thank you. And just one other question in the chronic back issue. Do you know how many we have enrolled for that trial? And is that something that will be completed? And we're looking at 2026 for a filing in that space?
We've said that it takes about 12 months to complete enrollment. That's the target that we don't give an update on how many patients at any point in time. But we've said that the objective is to complete enrollment by the end of next year.
Okay. Thanks.
Down here.
Just a personal shareholder, but just wanted to ask, you mentioned in regards to the treatment for Mesoblast with the adults with the GVHD after Jakafi or the predominant standard of care at the moment. With moving forward with the new trial and things like that, are you looking to get designation approval before the other product that's already on the market? Or is it looking to be like after they've failed that procedure or treatment, then we can be involved?
Well, the idea is the study that I've outlined that the clinicians wanted to see done in the first instance is rescue therapy for those who failed ruxolitinib, right? And the reason for that is because there's a very large population, 40%. If we're successful, then you can manage your reimbursement appropriately because there's no alternatives. It's also the fastest pathway given the size of the study.
Having said that, strategically, as a company, we're still evaluating whether we want to go head-to-head in a further study against ruxolitinib because there's a substantial, maybe half the patients, grade 3, 4 disease patients who get the ruxolitinib first who fail. And so we think that we would be superior to ruxolitinib in that kind of a randomized controlled study that would position our drug as immediate first line. But in the short term, I think strategically, it makes a lot of sense to go and use our cells as salvage therapy in any event. So I think that's the kind of study and label that we would be pursuing first.
Thanks, Silviu. I'm glad to the opportunity to come here today and talk to you. The question I've got for you is JCR Pharmaceuticals in Japan and Temcell. That seems to have paid off that royalty basis. And I'd like to get my head around where are we at with that market? Does it match the data that we've got in the U.S.? And what sort of difference it is between the Japan potential market and the U.S. potential market? And is that where it's going to sit? I mean, is it in the growth phase or is it stabilizing or where's that at? And also, does it work? Do we get access to data from those sites?
The Japan market is a small market relative to the U.S. for many reasons. There's less transplants by a long shot. The risk of GVHD is lower because there's less heterogeneity in the gene pool, things like that. The point about Temcell, our licensed product in Japan, was that it was a very good. It gave us great insight into market adoption and how it was likely to perform so that we could gauge for our own product into the U.S. market.
That was the whole point. It's plateaued. I would say it's plateaued. It's a stable revenue stream. We report on it every quarter. It's unfortunately a little bit volatile because of the currency differences between the yen and the US dollar. So from one quarter to another, you're going to see fluctuations. But otherwise, I don't see it in a growth phase. It's in a plateau phase right now. But it's provided us with great insight. For example, within three years of launch, there was about a 30% market adoption. And for a very, very ultra-conservative pool of physicians, that's a very good achievement. So that gives us very strong confidence about the way our product's going to perform in the U.S.
Thank you. Oh, we've got a few more questions, but then we will have to move on, I'm afraid. So perhaps one last question over here or over there.
Firstly, thank you for taking our questions. Regarding pediatric GVHD, if we get approval with the FDA, I was wondering how that leads to the pathway of children suffering GVHD in Australia, what the timeframe may possibly be if we're looking to go down that path of, say, TGA approval? Thank you.
Yeah. FDA approval usually comes with a relatively straightforward path to TGA approval, no further requirements for clinical data, for example. But it's a process. It'll probably take about six months of documentation. But it's that sort of order of magnitude. Yes. Absolutely. Yep.
All right. Well, they're all fantastic questions and wonderful detailed answers from Silviu. There will be another opportunity to speak to Silviu after we've finished the meeting today. So if there are any other burning questions, you will get another opportunity. So thank you again, Silviu. That was a very comprehensive overview of the significant progress our business has made over this year and the exciting milestones coming up for this 2025 financial year. So I'd now like to outline to you the procedural matters. So on your arrival, you were given an admission card. So persons holding either a yellow or blue admission card are entitled to speak at the meeting. If you have a question or comment, please raise your hand.
At the appropriate time, I will invite you to speak. If you're invited to speak, a Mesoblast staff member will pass one of the roving microphones to you. Before you ask your question or make your comment, please hold up your admission card and state your name and whether you are here as a shareholder, a proxy, attorney, or corporate representative. Please address all questions to me as chair, and I will then answer or redirect them as necessary. Only persons holding a yellow admission card can vote at this meeting. Persons holding a red admission card are visitors to the meeting and are not entitled to speak or vote. I will put each of the resolutions to a poll separately and will provide an opportunity for questions on each from those holding yellow or blue admission cards. We are now going to move to the resolutions.
I can confirm the notice of meeting was sent to all registered members, the company's directors, and the company's auditors in accordance with the company's constitution and the Corporations Act. In addition, a copy of the notice of meeting has been lodged with the ASX. I will take the notice of meeting dated the 17th of October, 2024, as being read. I direct that a poll be taken on all items of business today. The poll will be held at the end of each resolution. Before a vote is taken, I will inform the meeting of how many proxy votes have been received. As indicated in the notice of meeting, I will be voting all undirected proxies given to the chair of the meeting in favor of all resolutions considered at this meeting.
For the administration of the poll, I appoint Jim Kompogiorgas of Link Market Services Limited, the company's share registrar, who has examined and prepared summaries of the proxy forms received to act as returning officer and to conduct the poll. When you registered your attendance at this meeting, voting shareholders, attorneys, corporate representatives, and proxy holders were given a yellow admission card. On this card, you will find a series of boxes for voting. Please indicate on your card how you wish to vote by ticking or marking the appropriate square. You must mark either the for or against or abstain boxes for your vote to count. You should vote on all items set out on the yellow voting card.
Please also note that if you are a proxy holder, attorney, or corporate representative, and your appointer has directed how you should vote on any item, then you must follow that direction. Once you've finished marking your card after the completion of all items of business at this meeting, please place it in one of the ballot boxes at the exit. If there are any aspects regarding the voting on which you're uncertain, please do not hesitate to ask one of the share registry staff. The results of the poll will be made available later today and will be released to the market via the ASX website. It will also be made available on our company website. I will now move each of the items of business separately, and we will provide an opportunity for questions on each item.
Item one, the company's annual report includes the financial statements and director's declaration, the director's report, and the auditor's report for the year ended 30th of June, 2024. I will take these reports as read. While no resolution is required in relation to the financial statements and reports, shareholders, their corporate representatives, attorneys, or their proxies are entitled today to ask questions of the directors or the auditor in relation to these reports. I ask that any questions concerning the remuneration report be raised during the next agenda item. Questions may also be asked of the auditor concerning the conduct of the audit, the preparation and content of the auditor's report, accounting policies adopted by the company, and the independence of the auditor in carrying out the audit. Are there any questions on this item? All right.
The board submits its 2024 remuneration report to shareholders for your consideration and approval. The Corporations Act requires companies to put to shareholders a non-binding resolution to enable shareholders to vote their opinion on matters included in the remuneration report. Are there any questions on this item? Yes.
Good afternoon, Chair. My name is Christine Haydon , and I'm a volunteer monitor with Australian Shareholders Association. Excuse me. I've got a bit of a sore throat today. Our question is more really of a request, and we'd like to ask the board to consider putting in the annual report a five-year table of the CEO's remuneration. It's really hard to read all of the information in the report and actually have a clear understanding, particularly when some of the key management people and the board, in fact, are taking shares or options instead of or in lieu of remuneration.
So one of the easy ways to get a handle on how much people are being paid, if you could actually put in an actual take-home pay on a five-year basis into the annual report, I think that would give a clear picture to all shareholders just how the remuneration is structured. Thank you.
Thank you, Christine, for your question. In our annual report, we do publish the CEO's remuneration, which includes his fixed salary, short-term incentives, and long-term incentives for that financial year and for the previous financial year. So the CEO's fixed remuneration has not changed in the last five years except for the last year and the previous financial year to support the company's cash preservation initiative. So Dr. Silviu Itescu agreed to take that 30% cut in cash, and in lieu of that, he received options at the same value as his salary.
So just explaining that. So we don't currently have that table that you're talking about outlining the last five years of salary, but it is a very worthwhile suggestion. Thank you, Christine. We will take that on board in-house and have a discussion about it and see if we can, in fact, have that five-year table. Any other questions on this item? Right. So we've got the proxy votes received for item two displayed on the screen. I now propose that item two is set out in the notice meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then we will move on to the next resolution.
We will now move to item three, which involves the re-election of Dr. Philip Krause as a director, who is retiring in accordance with the company's constitution. Dr. Krause is eligible and wishes to offer himself for re-election. The board recommends that shareholders vote in favor of the re-election of Dr. Krause. Dr. Krause has not participated in the board resolution relating to his own candidacy.
Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item three is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then we will move to the next resolution. We next move to a discussion of item four concerning the approval of the proposed issue of shares to Chief Medical Officer Dr. Eric Rose for his participation in the capital raise. Are there any questions on this item?
Proxy votes received for this item are displayed on the screen. I now propose that item four is set out in the Notice of Meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then we'll move to the next resolution. We next move to a discussion of item five, which involves the issue of options to Chief Executive Officer Dr. Silviu Itescu. Item 5 A concerns the proposed issue of options to Dr. Itescu in connection with the long-term incentive component of his remuneration for the 2025 financial year. Are there any questions on this item? Proxy votes received for this item are displayed on the screen.
I now propose that item 5 A is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then we will move to the next resolution. We next move to a discussion of item 5 B concerning the proposed issue of options to Dr. Itescu in lieu of 30% of his base salary for the 12 months from the 1st of September, 2024, to the 31st of August, 2025. Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item 5 B is set out in the notice of meeting and put the resolution to a vote by poll.
I will pause to allow you to complete your vote on this item on the yellow voting card, and then we will move to the next resolution. Item 5 C concerns the proposed issue of options to Dr. Itescu in connection with the short-term incentive component of his remuneration for the 2023 and 2024 financial years. Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item 5 C is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then we will move to the next resolution. We next move to a discussion of item six, which involves the issue of options to Chief Medical Officer Dr. Eric Rose.
Item six A concerns the proposed issue of options to Dr. Rose in connection with the long-term incentive component of his remuneration for the 2025 financial year. Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item 6 A is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then we will move to the next resolution. We next move to a discussion of item 6 B concerning the proposed issue of options to Dr. Rose in lieu of 30% of his base salary for the 12 months from the 1st of September, 2024, to the 31st of August, 2025. Are there any questions on this item?
Proxy votes received for this item are displayed on the screen. I now propose item 6 B is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then move to the next resolution. Item 6 C concerns the proposed issue of options to Dr. Rose in connection with the short-term incentive component of his remuneration for the 2023 and 2024 financial years. Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item 6 C is set out in the notice of meeting and put the resolution to a vote by poll.
I will pause to allow you to complete your vote on this item on the yellow voting card, and then move to the next resolution. We next move to a discussion of item seven, which involves the issue of options to Director Dr. Philip Krause. Item 7 A concerns the proposed issue of milestone-based options to Dr. Krause in connection with his consultancy fees for the 2025 financial year. Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item 7 A is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then move to the next resolution.
We next move to a discussion of item 7 B concerning the proposed issue of time-based options to Dr. Krause in connection with his consultancy fees. Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item 7 B is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then move to the next resolution. We next move to a discussion of item eight concerning the proposed issue of options to the following non-executive directors: Mr. William Burns, Mr. Philip Facchina, Mr. Joseph Swedish, and me, Jane Bell. In lieu of 50% of direct fees for the 12 months from the 1st of August, 2024, to the 31st of July, 2025.
Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item eight is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on the item on the yellow voting card, and then move to the next resolution. We next move to a discussion of item nine concerning the ratification of the issue of shares in our successful placements to institutional investors late last year and earlier this year. This placement was done in conjunction with an entitlement offer to all existing shareholders. Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item nine is set out in the notice of meeting and put the resolution to a vote by poll.
I will pause to allow you to complete your vote on this item on the yellow voting card, and then move to the next resolution. We next move to a discussion of item 10 A concerning the approval and ratification of the grant of warrants in the company to Dr. Gregory George, our substantial shareholder. Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item 10 A is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then move to the next resolution. We next move to a discussion of item 10 B concerning the proposed issue of convertible notes and warrants in the company to the substantial shareholder.
Are there any questions on this item? Proxy votes received for this item are displayed on the screen. I now propose item 10 B is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card, and then move to the next resolution. We next move to a discussion of item 11 concerning the renewal of the proportional takeover approval provisions in the company's constitution. This is a special resolution and requires the approval of 75% of the votes cast by our shareholders, attorneys, or corporate representatives present and eligible to vote at this meeting. Are there any questions on this item? Proxy votes received for this item are displayed on the screen.
I now propose item 11 is set out in the notice of meeting and put the resolution to a vote by poll. I will pause to allow you to complete your vote on this item on the yellow voting card. Ladies and gentlemen, that concludes the formal business of the meeting. I'd like to remind you that if you're intending to vote, then you should complete your yellow voting card on all items of the business and place it in one of the ballot boxes now. As I mentioned earlier, the results of the voting at this AGM will be released to the ASX once the votes have been counted. I invite everyone attending the AGM in person to stay, enjoy the light refreshments, and take the opportunity to discuss with our directors and management present the operations and activities of the company.
Thank you very much for your attendance and contributions today. We appreciate your ongoing support and loyalty and look forward very much to a very rewarding year ahead. Thank you.