Phi Finney McDonald along with William Roberts Lawyers act for the Joint Applicants in a class action in the Federal Court of Australia against Mesoblast Limited (ASX: MSB; NASDAQ: MESO; OTC: MEOBF) (Mesoblast) on behalf of investors who, during the period from 22 February 2018 until the close of trading on 17 December 2020 (inclusive) (Claim Period), acquired:
- An interest in fully paid ordinary shares in Mesoblast listed on the ASX as “MSB”;
- An interest in certain American Depository Receipts traded on the NASDAQ exchange under the symbol “MESO”;
- An interest in securities traded over the counter in the United States with the symbol “MEOBF”; and/or
- Long exposure to MSB Shares by entering into equity swap confirmations in respect of MSB Shares,
(Mesoblast Securities).
The class action is jointly funded by Omni Bridgeway and ICP Funding Pty Ltd along with Investor Claim Partner Pty Ltd (ICP) (Funders).
Proposed Settlement
A conditional settlement of the Mesoblast Class Action has been reached between the parties that provides for the payment of AUD$26.5 million (Settlement Sum), inclusive of legal fees, expenses, disbursements, any funding commission and interest, to resolve the claims of all Group Members, subject to the approval of the Court (Proposed Settlement).
Class action settlements, including this Proposed Settlement, are subject to approval by the Federal Court of Australia. The Court will have a hearing at 9:30am AEDT on 13 December 2024 to consider whether to approve the Proposed Settlement as fair and reasonable and in the interests of all Group Members.
Notice of Proposed Settlement
Key information regarding the proposed settlement is available in the Notice of Proposed Settlement (Notice) that has been approved by the Court. All Group Members in the Mesoblast Class Action should read the Notice as it contains important information about the Proposed Settlement and may affect their legal rights.
Objecting to the Proposed Settlement
Any Group Member in the Mesoblast Class Action who wishes to object to the Proposed Settlement must complete a Notice of Objection (in the form annexed to the Notice) and send it, along with any evidence and written submissions, to both of the following addresses:
| By mail, to the Victorian Registry of the Federal Court of Australia:
Owen Dixon Commonwealth Law Courts Building |
By email, to the Joint Applicants’ Solicitors: |
The Court-ordered deadline to submit a Notice of Objection is 4:00pm AEDT on 11 October 2024.
Unregistered Group Members
On 20 December 2023, the Court made orders that notice be given to Group Members of their right to register their claim or opt out of the class action (Opt Out and Registration Notice). The deadline to opt out or register was 5pm on Friday, 19 April 2024 (Opt Out and Registration Deadline).
As noted in paragraphs 2.2 and 5.1 of the Opt Out and Registration Notice, the parties intend to seek an order from the Court which, if made, would have the effect that those Group Members who did not register their claim by the Opt Out and Registration Deadline (Unregistered Group Members) will not be entitled to participate in the Proposed Settlement without leave of the Court.
Unregistered Group Members who wish to participate in the Proposed Settlement must submit a Notice of Objection that identifies the basis on which they think they should be permitted to participate.
The Court ordered deadline to submit a request to participate in the Proposed Settlement is 4:00pm AEDT on 11 October 2024.
Background
On 19 October 2022, the Court ordered by consent that the class action commenced by Phi Finney McDonald against Mesoblast (Oil Surveillance Australia Pty Ltd ATF D.A Lynch Superfund v Mesoblast Limited) be consolidated with the class action commenced by William Roberts Lawyers against Mesoblast. The consolidated class action is now known as Paul Tibor Horsky and Oil Surveillance Australia Pty Ltd ATF D.A Lynch Superfund v Mesoblast Limited (ACN 109 431 870) (VID268/2022).
The consolidated class action is jointly funded by the Funders and Phi Finney McDonald and William Roberts are the joint lawyers on the record.
The consolidated class action arises in relation to Mesoblast’s statements to the market regarding the potential application of its Remestemcel-L (R-L) product for:
- children with steroid refractory acute Graft versus Host Disease (SR-aGVHD); and
- patients with acute respiratory distress syndrome caused by COVID-19 (COVID-19 ARDS).
On 11 August 2020, following the US Food and Drug Admission’s (FDA) release of information for the FDA’s Oncologic Drugs Advisory Committee meeting to discuss the use of R-L for SR-aGVHD, Mesoblast’s share price fell by approximately 31%.
On 02 October 2020, following the announcement by Mesoblast that it had received a complete response letter from the FDA requiring Mesoblast to perform further work in relation to establishing the efficacy of R-L for the treatment of SR-aGVHD before it would grant a marketing licence, Mesoblast’s share price fell by approximately 37%.
On 18 December 2020, following the announcement that the Data Safety Monitoring Board had advised that the Phase 3 COVID-19 ARDS trial for the use of R-L was not likely to meet its mortality reduction endpoint, Mesoblast’s share price fell by approximately 36%.
Allegations
The consolidated class action alleges that during the Claim Period, Mesoblast:
- breached its continuous disclosure obligations under the Corporations Act 2001 (Cth); and
- engaged in misleading or deceptive conduct in contravention of the Corporations Act, the Australian Securities and Investments Commission Act 2001 (Cth) and the Australian Consumer Law,
by failing to disclose information regarding the application of Remestemcel-L for the treatment of:
- paediatric patients suffering from steroid-refractory acute graft versus host disease; and
- patients with acute respiratory distress syndrome caused by the COVID-19 virus.
The consolidated class action alleges that the price of Mesoblast Securities was artificially inflated during the Claim Period by the above conduct and that investors suffered loss and damage by reason of the acquisition of Mesoblast Securities at those inflated prices.
Key Documents