Phase 3 Meeting Scheduled With US FDA Following Positive Results of Bone Marrow Regeneration Trial

MELBOURNE, Australia, July 12, 2010 - Australian regenerative medicine company, Mesoblast Limited (ASX: MSB;
ADR: MBLTY), today announced that based on positive results from its bone
marrow transplant clinical trial conducted at the University of Texas MD
Anderson Cancer Center, a formal meeting has been scheduled with the United
States Food and Drug Administration (FDA) to discuss a proposed Phase 3
clinical trial program.

For this Phase 3 program, the patented allogeneic, or "off-the-shelf,"
Mesenchymal Precursor Cells (MPCs) will be used under a United States FDA
Orphan Drug Designation to expand haematopoietic stem and progenitor cell
numbers in patients with haematologic malignancies.

Mesoblast's objective is to develop a therapy that results in effective
bone marrow reconstitution without the potentially life-threatening
complication of graft-versus-host disease which occurs in as many as 60
percent of patients who receive bone marrow transplants from unrelated adult
donors.

In the first 25 patients transplanted with MPC-expanded haematopoietic
progenitors from cord blood, 80 percent successfully achieved the key
composite endpoint at 100 days of survival with sustained engraftment of both
neutrophils and platelets. This is significantly higher than the rate of 38
percent for this composite endpoint achieved after transplantation with
non-expanded cord blood in the United States registry of 300 patients
collected by the Center for International Blood and Marrow Transplant
Research. To date, only four patients (16 percent) receiving expanded cord
blood have developed severe graft-versus-host disease.

"By increasing the overall success rate of an allogeneic bone marrow
transplant while reducing the risk of graft-versus-host disease, our platform
technology has the potential to lower the risk of infections, bleeding, and
death in critically ill patients with haematologic malignancies following
chemotherapy," said Mesoblast Chief Executive Professor Silviu Itescu.

"Our upcoming discussions with the FDA, based on the positive results
from this trial, will enable us to provide a clear timetable to product
commercialisation and early revenues," added Professor Itescu.

About Orphan Drug Designation

Orphan drug designation is reserved for therapies which are being
developed for conditions affecting up to 200,000 patients annually in the
United States, and allows for an accelerated review process by the FDA,
seven-year market exclusivity in the United States upon obtaining marketing
authorisation, tax benefits, and exemption from user fees.

About Mesoblast Limited

Mesoblast Limited (ASX: MSB; ADR: MBLTY) is a world leader in
commercialising biologic products for the broad field of regenerative
medicine. Mesoblast has the worldwide exclusive rights for a series of
patents and technologies developed over more than 10 years relating to the
identification, extraction, culture and uses of adult Mesenchymal Precursor
Cells (MPCs). www.mesoblast.com

    For further information, please contact:

    Julie Meldrum
    Corporate Communications Director
    +61-3-9639-6036
    julie.meldrum@mesoblast.com
    www.mesoblast.com

Julie Meldrum, Corporate Communications Director of Mesoblast Limited, +61-3-9639-6036, julie.meldrum at mesoblast.com