MESOBLAST LTD — Capital/Financing Update 2006

Jan 30, 2006

MESOBLAST ANNOUNCES STRONG CASH POSITION FOR ADULT STEM CELL CLINICAL PROGRAM

Melbourne, 31 January 2006: Australia's adult stem cell company, Mesoblast Limited (ASX:MSB), today announced cash reserves of over \$12.0 million at 31 December 2005.

Executive Chairman, Mr Michael Spooner, said the company had earned approximately \$328,000 principally through interest income, whilst losses for the period to date were approximately \$3.4 million.

"Importantly, Mesoblast's American-based sister company, Angioblast Systems Inc, in which the company has acquired a 33.3 per cent equity stake, has cash reserves of approximately \$1.3 million.

"Since Mesoblast and Angioblast are using their funds to jointly develop and commercialise the platform adult stem cell technology, the total of funds available for product development is \$13.3 million.

"These financial results are in line with our forecasts and reflect the ongoing significant activity associated with the rapid commercialisation of Mesoblast's specialist adult stem cell technology.

"We remain confident that Mesoblast has sufficient funds in place to complete an Investigational New Drug (IND) submission to the United States Food and Drug Administration (FDA) for a lead orthopaedic and a cardiovascular indication by the end of this year.

"In line with Mesoblast's accounting practices, all development expenditure associated with bringing the technology to market is being expensed", Mr Spooner said.

About Mesoblast Limited:

Mesoblast Limited (ACN 109 431 870) is an Australian biotechnology company committed to the development of novel treatments for orthopaedic conditions, including the rapid commercialisation of a unique adult stem cell technology aimed at the regeneration and repair of bone and cartilage. Our focus is to progress through clinical trials and international regulatory processes necessary to commercialise the technology in as short a timeframe as possible. Mesoblast, which listed on the Australian Stock Exchange in December 2004, has the worldwide exclusive rights for a series of patents and technologies that have been developed over more than 10 years and which relate to the identification, extraction and culture of adult Mesenchymal Precursor Cells (MPCs). The

technology has achieved outstanding results in pre-clinical in vivo studies in the regeneration and repair of large bone fractures.

The company has also acquired a 33.3% interest in Angioblast Systems Inc, an American company developing the platform MPC technology for the treatment of cardiovascular diseases, including repair and regeneration of blood vessels and heart muscle. Mesoblast and Angioblast are jointly funding and progressing the core technology. Mesoblast's strategy is to maximise shareholder value through both corporate partnerships and the rapid and successful completion of preclinical and clinical milestones.

For further information, please contact:

Julie Meldrum Corporate Communications Director Mesoblast Limited T: + 61 (03) 9639 6036 or +61 (0) 419 228 128 E: julie.meldrum@mesoblast.com W: www.mesoblast.com