MESOBLAST LTD — Capital/Financing Update 2007

Mar 6, 2007

asx announcement

MESOBLAST'S ROAD TO UNITED STATES PRODUCT REGISTRATION

Melbourne, Australia; 7 March 2007: Australia's adult stem cell company, Mesoblast Limited (ASX:MSB; USOTC:MBLTY), today provided investors with a timetable and update of proposed clinical programs leading to product registration in the United States, the world's largest health care market.

The Phase II spinal fusion trial is due to commence by O2 2007. The results of this trial will be used to support a pivotal Phase 3 clinical trial of Mesoblast's patented technology for spinal fusion, aiming to eliminate the need for autograft (or patient's own hip bone graft), reduce complications associated with existing treatment regimens, and improve fusion outcomes.

Equally as important is the progress made by Mesoblast's US-based sister company, Angioblast Systems Inc; which is focused on commercialising the same platform stem cell technology for the treatment of cardiovascular diseases.

Angioblast has completed final pre-IND meetings with the FDA and, based on these as well as ongoing discussions with potential strategic partners, is in final preparations to complete its IND submission for a first cardiovascular clinical indication by the end of this quarter.

Angioblast will seek to be the first company to receive FDA clearance to test catheter-based delivery of allogeneic (or 'off-the-shelf') cells in patients with heart attacks.

In order to commercialise our products in the United States, FDA clearances must be received for clinical trials and ultimately approval of safety and efficacy endpoints for product sales. Our FDA submission for a Phase 2 trial in spinal fusion, which was cleared in December 2006, contained detailed results of our product manufacturing and scale-up processes, our large animal studies, and our pilot clinical trials. Its rapid clearance enables us to now map out our clinical timelines to product registration, and consequently product commercialisation.

Anticipated timelines for our clinical programs are:

Q1 2007	FDA IND submission for Phase 2 trial in first cardiac application
Q2 2007	Phase 2 spinal fusion allogeneic trial begins in US
Q2 2007	Pilot Trial long bone fractures enrolment complete
Q2 2007	Pilot Trial severe coronary artery disease enrolment complete
Q3 2007	Phase 2 allogeneic trial for heart attacks begins in US
2008	Additional Phase 2 orthopaedic and cardiac trials commence
2008	Enrolment complete in allogeneic Phase 2 trial for spinal fusion
2008	Enrolment complete in allogeneic Phase 2 trial for heart attacks
>2008	Pivotal/Phase 3 registration trials commence in lead orthopaedic
and cardiac indications.

Both Mesoblast and Angioblast have already established successful collaborative relationships with major device and pharmaceutical organisations in the execution of preclinical and clinical trials. Progression through Phase 2 clinical trials and on to pivotal Phase 3 registration trials will serve to greatly expand and accelerate each company's opportunities for major strategic partnerships.

About Mesoblast Limited

Mesoblast Limited (ASX:MSB/USOTC:MBLTY) is an Australian biotechnology company committed to commercialisation of novel treatments for orthopaedic conditions, including a unique adult stem cell technology aimed at the regeneration and repair of bone and cartilage. Mesoblast has worldwide exclusive rights to a series of patents and technologies that have been developed over more than 10 years relating to the identification, extraction and culture of adult Mesenchymal Precursor Cells (MPCs). The company has also acquired a substantial 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's strategy is to maximise shareholder value through both corporate partnerships and rapid product commercialisation.

For further information, please contact:

Julie Meldrum Corporate Communications Director Mesoblast Limited $T: +61(03)96396036$ M: +61 (0) 419 228 128 E: julie.meldrum@mesoblast.com W: www.mesoblast.com