MESOBLAST S PHASE 2 TRIAL RESULTS IN CHRONIC LOW BACK PAIN PRESENTED AT NORTH AMERICAN SPINE SOCIETY ANNUAL MEETING

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MESOBLAST S PHASE 2 TRIAL RESULTS IN CHRONIC LOW BACK PAIN PRESENTED AT NORTH AMERICAN SPINE SOCIETY ANNUAL MEETING New York, USA; and Melbourne, Australia; 13 November 2014: Mesoblast's Phase 2 trial results in degenerative disc disease were presented today at the North American Spine Society (NASS) Annual Meeting, the premier global conference for spine disease professionals. The key outcome of the trial was that a single injection of Mesoblast s proprietary allogeneic Mesenchymal Precursor Cell (MPC) product resulted in sustained improvements in pain and function at 12 months. Investigator Dr Hyun Bae, who is Medical Director, Director of Education, Cedars-Sinai Spine Center, Cedars-Sinai Medical Center, Los Angeles; and Medical Director of the Spine Institute, Santa Monica, USA; presented the results on behalf of the trial investigators and stated: There is a critical need for a non-surgical biologic approach to improve pain and function in the millions of patients suffering from chronic low back pain associated with disc degeneration. The results to date seem promising and I believe Mesoblast s stem cell therapy product could have the potential to transform the treatment of back pain. Mesoblast's Phase 2 clinical trial enrolled 100 patients with moderate to severe low back pain persisting for more than six months and caused by early disc degeneration (<30% disc height loss, 83% below Pfirrmann Grade 5 by MRI). Patients were enrolled across 13 sites in the United States and Australia and randomized to receive direct intra-disc injection of saline (n= 20), hyaluronic acid (HA, n=20), 6 million allogeneic Mesenchymal Precursor Cells (MPCs) in hyaluronic acid carrier (6M, n=30) or 18 million allogeneic MPCs in hyaluronic acid carrier (18M, n=30). Patients received the injection in the outpatient setting for a single painful degenerated lumbar level disc and are being assessed for safety and efficacy over a total of 36 months to evaluate long-term treatment effects. The following key findings were presented to the NASS meeting: Allogeneic MPCs were well tolerated Both MPC doses showed improvement relative to controls for pain and functional improvement and reduced interventions Radiographic evidence demonstrating decreased abnormal vertebral movement, suggesting improvement in disc structure and stability MPC treated patients were three times more likely to achieve treatment success defined as clinically significant pain and function improvement without further intervention at both 6 and 12 months, when compared to controls In line with recent discussions with the United States Food and Drug Administration, Mesoblast anticipates that it will commence the Phase 3 program by the end of this year which is expected to support product regulatory approvals.

Chronic Discogenic Low Back Pain (CDLBP) Mesoblast s investigational product candidate MPC-06-ID is being developed to target the population of patients suffering from moderate to severe chronic low back pain due to moderately degenerated discs. The target patient population has exhausted conservative treatment options, may have failed epidural steroid injections to alleviate pain and has no treatment option other than invasive and costly surgical interventions. Over four million patients in the United States alone suffer from CDLBP. Physicians estimate a failure rate of 40% in surgically treated patients. Total costs of low back pain are estimated to be between US$100 billion and US$200 billion annually with two thirds of this amount attributed to patients decreased wages and productivity. Mesoblast Limited Mesoblast Limited (ASX: MSB; USOTC: MBLTY) is a world leader in the development of biologic products for the broad field of regenerative medicine. The Company s proprietary adult stem cell technologies include its highly purified, immunoselected Stro- 1/Stro-3 positive Mesenchymal Precursor Cells (MPCs), culture-expanded Mesenchymal Stem Cells (MSCs), Dental Pulp Stem Cells (DPSCs), and expanded Hematopoietic Stem Cells (HSCs). Mesoblast s protein technologies are based on factors derived from its proprietary cellular platforms, including Stromal Derived Factor-1 (SDF-1). Mesoblast s allogeneic or off-the-shelf cell-based products are targeting substantial market areas of unmet medical need, including cardiac and metabolic diseases, inflammatory/immune-mediated conditions, oncology, and orthopedic diseases. Lead products under investigation are MSC-100-IV for steroid refractory acute Graft Versus Host Disease, MPC-06-ID for chronic discogenic lower back pain and MPC-150-IM for congestive heart failure, in partnership with Teva Pharmaceutical Industries Ltd. www.mesoblast.com For further information, please contact: Julie Meldrum Global Head of Corporate Communications Mesoblast Limited T: +61 (0) 3 9639 6036 E: julie.meldrum@mesoblast.com

A Phase II study demonstrating efficacy and safety of Mesenchymal Precursor Cells in low back pain due to disc degeneration Hyun Bae MD Kasra Amirdelfan MD, Domagoj Coric MD, Tory McJunkin MD, Kenneth Pettine MD, Hyun Hong MD, Kee Kim MD, William Beckworth MD, David Oehme MD, Tony Goldschlager MD, Roger Brown, Michael DePalma MD

Gap In Non-Invasive Treatment Modalities For Chronic Low Back Pain Due To Degenerative Disc Disease (DDD) Over 4 million patients in the US have chronic back pain due to disc degeneration Current treatment options for chronic back pain involve either palliative measures or invasive surgery Most episodes of LBP will recover within a few months, but some will develop chronic LBP (CLBP) For patients with CLBP, conservative measures only mask the symptoms while doing nothing to fix the underlying pathology until the symptoms can no longer be managed and invasive surgery is the only option Surgery is an invasive and expensive procedure to deal with CLBP A successful therapy for the treatment of CLBP due to DDD needs to provide a nonsurgical, sustained (at least 6-12 months) and clinically significant improvement in pain and function with no further interventions Between group mean differences less relevant in this population Individual responder analysis for pain and function more relevant, as per consensus 1 Similar bar for treatment success as for permanent surgical interventions (fusion, artificial disc) Minimally Important Changes at least 30% improvement in VAS and at least 10 point improvement in Oswestry Disability Index (ODI) 1 to be clinically relevant 1 VIII International Forum on Primary Care Research on Low Back Pain (Amsterdam, June 2006) ; Ostelo et al Spine Vol 33,no1.pp90-94

Mesenchymal Precursor Cells (MPCs) for treatment of low back pain due to degenerated intervertebral discs Prospective Immunoselection of Specific MSC Subpopulations BM MNC BM MNC MPC Antibody Magnetic Selection MPC 1 Ghosh et al. J Neurosurg: Spine, March 9, 2012 Highly purified, immunoselected Stro-1/Stro-3 positive Mesenchymal Precursor Cells (MPCs) - Relatively homogeneous, well characterized cells - Increased in vitro differentiation efficiency into cells of the bone, fat and cartilage lineages - Not immunogenic and suppress immune responses Allogeneic MPC therapy offers off the shelf logistics - Defined product characterization - Established potency assays and release criteria - Batch-to-batch consistency MPCs secrete multiple factors in the appropriate concentration, sequence and duration in response to disease/injury-specific microenvironmental cues - Detect injury and inflammation - Respond to local stimuli and signals from the injured tissue - Release a wide range of biomolecules (growth factors, chemokines, enzymes etc.) - Increased proteoglycan synthesis - increased migration/proliferation of nucleus cells Demonstrated ability to repair the intervertebral disc in ovine preclinical model of disc degeneration 1

Study Design Prospective, multi-center, randomized, double-blind, controlled study - Patients and radiographic evaluators blinded to treatment Follow-up: 1, 3, 6, 12, 24 & 36 months Safety Evaluations - Adverse Events - Treatment Failure (Surgical & Injection Interventions) - Immunological Testing - Blood chemistry & inflammatory markers - Radiographic o Heterotopic ossification o Disc degeneration Efficacy Evaluations - Radiographic Changes o MRI o X-ray & Stability - Lower Back and Leg Pain measured by VAS Score - Oswestry Disability Index (ODI) - SF-36 - Work Productivity & Activity Index (WPAI) - Medication usage

Patient Population Inclusion Criteria Adult patients DDD with 1 symptomatic level from L1 to S1 with back pain >6 months Failed 3 Months Non-Operative Care Patients with a modified Pfirrmann score of 3, 4, 5 or 6 With or without contained disc herniation up to a 3mm protrusion with no radiographic evidence of neurological compression. Disc height loss of <30% compared to a normal adjacent disc based upon radiographic evaluation VAS Back pain >40 ODI Score >30 Exclusion Criteria Clinically significant nerve or sacroiliac joint pain. Clinically significant facet pain as determined by a diagnostic medial branch block or facet joint injection Symptomatic involvement of more than one lumbar disc level. Intact disc bulge/protrusion or focal herniation at the symptomatic level(s) > 3 mm or presence of disc extrusion or sequestration Discs with full thickness tears with free flowing contrast through the annulus fibrosis Lumbar intervertebral foraminal stenosis at the affected level(s) resulting in clinically significant spinal nerve root compression.

Demographics & Baseline Characteristics Saline HA 6M MPCs 18M MPCs p-value Sex 0.122 Male, % 50.0 50.0 40.0 70.0 Female, % 50.0 50.0 60.0 30.0 Age, mean 44.5 40.3 45.1 37.9 0.056 Weight, mean kg 70.46 79.87 77.51 84.53 0.024 Duration DDD, mean years 5.9 5.0 8.4 3.7 0.009 Duration Low Back Pain, mean years 7.9 7.6 9.9 7.4 0.443 VAS Low Back, mean mm (1-100) 66.9 71.9 69.7 71.5 0.650 ODI, mean (1-100) 44.40 46.80 52.06 50.68 0.234 Modified Pfirrman Score (1-8) 1 0.570 Grade I - V, % 80.0 90.0 83.3 96.7 Grade VI - VIII, % 20.0 10.0 16.7 3.3 1 Baseline score of blinded independent radiologist. Modified Pfirrmann score for inclusion in the study determined by investigators.

Safety Results Procedure and treatment well tolerated No significant differences in SAEs or AEs across all 4 groups No clinical symptoms of allergic or immune reaction to allogeneic MPCs The only AE reported in >10% of patients was back pain, new different or worsening Overall back pain was reported in 40.0% of Saline, 20.0% of HA, 26.7% of 6M and 50.0% of 18M patients The high dose had an increased incidence of early post-injection reports of back pain ( within 7 days of treatment injection) compared to the other groups

MPC treated groups had significantly reduced time to intervention at the treated level compared to saline controls Interventions occurred in 25.0% Saline, 10.0% HA, 6.9% 6M and 3.3% 18M groups The 6M and 18M groups had a statistically lower rate of intervention compared to the saline group. Overall log rank p=0.024 (p=0.024 & p=0.010) Treatment Failure: surgical interventions (e.g. fusion surgery, discectomy, artificial disc replacement) and injections (epidural steroids, rhizotomy and transforaminal injections) at the treated level

MPC treated groups had greater reduction in pain than controls at 12 months, as measured by responder analysis or mean change from baseline Proportion of Patients Mean VAS Change from Baseline % VAS Responders Mean VAS Change from Baseline 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% % VAS Improvement From Baseline 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 40.4 36.8 27.1 27.0 Mean VAS Change From Baseline Saline HA 6M 18M 6M and 18M MPCs treated groups performed similarly and the saline and HA control groups performed similarly The 6M MPC group had 69.2%, the 18M MPC group had 61.5% of patients achieving at least 50% reduction in VAS back pain while the Saline group had only 31.3% and the HA group had 35. 3% (p = 0.036) Saline HA 6M MPCs 18M MPCs Mean reduction from baseline in the VAS low back pain was 40.4 for 18M group, 36.8 for 6M group, 27.0 for pooled controls (p=0.11 for 6M vs. pooled control and p=0.046 for 18M vs. pooled control) Large differences around the mean reflect responder vs. non-responder outcomes

MPC groups have a greater proportion of patients with at least a 50% improvement in back pain or minimal/no residual back pain at 12 months relative to controls 80.0% 70.0% 60.0% 50.0% Proportion of patients with 50% back pain reduction @ 12 months 69.2% 61.5% p = 0.009 p = 0.038 60.0% 50.0% 40.0% p = 0.009 p = 0.038 30.0% Proportion of patients with minimal to no back pain @ 12 months 52.0% 42.3% p = 0.011 p = 0.044 40.0% 33.3% 20.0% 18.2% 30.0% 10.0% 20.0% 50% back pain reduction @12 months Pooled Controls 6M MPCs 18M MPCs 0.0% Minimal Back Pain ( 20/100) @ 12 Months Pooled Controls 6M MPCs 18M MPCs

Proportion of Patients Mean ODI Change from Baseline MPCs demonstrate improvement in function compared to controls at 12 months in responders or mean change % ODI Responders Mean ODI Change From Baseline 90% 45.0 80% 70% 60% 50% 40.0 35.0 30.0 40% 25.0 30% 20% 20.0 15.0 Minimal Clinically Important Change 18.8 22.3 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 10.0 5.0 13.0 13.4 % ODI Improvement From Baseline 0.0 Saline HA 6M 18M 6M (57.7%) and 18M (61.5%) had a greater % of patients with a minimally important clinical difference (MCID) 30% reduction in ODI compared to Saline (43.8%) & HA (41.2%) at 12 months 6M (46.2%) and 18M (46.2%) had a greater % of patients with 50% reduction in ODI compared to Saline (31.3%) & HA (23.5.%) at 12 months Saline HA 6M MPCs 18M MPCs Mean reduction from baseline in the ODI was 43% for 18M group, 35% for 6M group, 30% for HA and 28% for saline (p=0.09 for 18M vs. saline) Mean ODI change from baseline exceeds the FDA accepted Minimal Clinically Important Difference (MCID) for the MPC treated groups, but does not exceed it for the MPC control groups Large differences around the mean reflect responder vs. non-responder outcomes

MPC treated groups had a nearly five fold greater proportion of patients at 12 months with minimal/no residual pain AND minimal/no functional disability relative to saline controls P=0.0592 vs. Saline 9 of 25 (36.0%) of 6M MPC patients 9 of 25 (36.0%) of 18M MPC patients P=0.0592 vs. Saline 1 of 16 (6.25%) of Saline patients 4 of 17 (23.53%) of HA patients

MPCs treatment results in radiographic evidence of decreased intervertebral translational motion, a measure of the increased stability of the disc annulus 1 Average Intervertebral Translation at 12 Months Overall p = 0.021 18M vs. saline p=0.014 The magnitudes of intervertebral rotation and translation that occurs in the sagittal plane between the flexed and extended positions are the most commonly used measures of spine motion Changes in translational motion correlate with disc stability in early disease (Pfirrmann Grade <5), as in this study population 1 There were no significant differences between groups at baseline for radiographic measurements or spinal motion, suggesting that the differences at 12 months reflect treatment related changes 1 Inoue et al. Othop Clin N Am 42 (2011) 487-499

% Responder Rate Composite Endpoint for Treatment Success 50% VAS back pain reduction; AND 15 point ODI improvement; AND no intervention at the treated level MPCs groups show sustained treatment effect relative to controls over 12 months 60.0% % Meeting Treatment Success Definition 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 1 Month 3 Months 6 Months 12 Months Saline HA 6M MPCs 18M MPCs

% Responder Rate MPC treated groups have significantly greater numbers of patients with treatment success at both 6 & 12 months Treatment Success Over 12 Months 50% VAS back pain reduction AND 15 point ODI improvement AND no intervention at the treated level at both 6 and 12 months P = 0.006 50.0% 45.0% P = 0.054 44.0% 42.3% 40.0% 35.0% 30.0% 25.0% 20.0% 17.6% 15.0% 12.5% 10.0% 5.0% 0.0% P = 0.020 6 and 12 Month Treatment Success Saline HA 6M MPCs 18M MPCs

Conclusion Allogeneic MPCs were well tolerated Both MPC doses showed improvement relative to controls for pain and functional improvement and reduced interventions Radiographic improvement in disc motion suggests improvement in disc structure and stability Over three fold increase in the number of MPC treated patients achieving concordant pain and function treatment success at both 6 and 12 months relative to saline controls Next steps: Randomized, placebo controlled phase 3 trials comparing 6M MPCs to saline placebo