High Risk, High Reward? 2 Speculative ASX Stocks to Watch
Biotech investing is not for everyone. The sector is filled with sharp ups and downs, long years of clinical trials, and the constant risk of failure. Yet, for investors willing to stomach the volatility, biotech stocks can also offer extraordinary rewards. A single drug approval or positive trial readout can completely transform a company’s fortunes.
Two Australian names—Mesoblast Ltd (ASX: MSB) and Dimerix Ltd (ASX: DXB)—are standing at that very crossroads right now. Both companies have recently achieved critical milestones that could shift them from speculative plays to genuine growth stories. But make no mistake: the risks are still high. Let’s dive into why these two stocks are attracting attention in 2025.
Mesoblast: First FDA Approval Delivers a Turning Point
Few ASX biotechs have ridden the rollercoaster quite like Mesoblast. After years of setbacks and regulatory delays, FY25 finally marked a breakthrough. The U.S. Food and Drug Administration (FDA) granted approval for Ryoncil (remestemcel-L)—the first mesenchymal stromal cell (MSC) therapy cleared in the U.S.—to treat steroid-refractory acute graft-versus-host disease in children.
This approval was historic, not only for Mesoblast but also for the wider cell therapy field. And investors took notice:
Revenue surge: Mesoblast reported total revenue of $26.56 million in FY25, up 195% year-on-year.
Product launch traction: Net sales of Ryoncil hit US$11.3 million in the June quarter alone, showing promising early uptake.
Funding position: The company closed FY25 with strong cash position, giving it one of the stronger balance sheets among ASX-listed biotechs.
What’s next?
Mesoblast isn’t stopping with one approval. Its next major catalyst is a Biologics License Application (BLA) for Revascor, a heart failure therapy, planned for late 2025. Positive alignment with the FDA means this program is back on track.
Other important developments include:
- Phase 3 data in chronic back pain,
- Ongoing efforts for Medicare reimbursement for Ryoncil in the U.S.,
- Potential ex-U.S. launches through new licensing partners.
Why still speculative?
Despite these wins, Mesoblast remains a loss-making company with cumulative losses exceeding $2 billion. The challenge now is execution. Can Ryoncil ramp quickly enough to cover costs? Will pipeline approvals come through on schedule?
If sales growth disappoints or regulatory timelines slip, Mesoblast could face pressure on cash reserves before reaching self-funding status. That’s what keeps this stock squarely in the “high-risk, high-reward” bucket.
Dimerix: Late-Stage Kidney Program With Global Upside
While Mesoblast is now transitioning into a commercial biotech, Dimerix (DXB) is still in the clinical stage. Its lead program, DMX-200, targets focal segmental glomerulosclerosis (FSGS)—a rare and severe kidney disease with few treatment options.
The company is currently running a pivotal global Phase 3 trial known as ACTION3, and progress has been steady:
Positive interim results: Early data showed DMX-200 performing better than placebo, with no major safety issues reported.
Partnership boost: In April 2025, Dimerix struck a deal with Amicus Therapeutics, giving the U.S. biotech exclusive rights to DMX-200 in the U.S. The deal included US$30 million upfront, with milestone and royalty opportunities to follow.
Revenue growth: Dimerix reported $5.59 million in FY25 revenue, a massive 1271% year-on-year increase, thanks largely to licensing income.
Funding stability: A fresh $20 million institutional raise, combined with partnership funds and R&D rebates, gives the company enough runway to see the Phase 3 trial through.
What’s next?
The big milestones to watch are:
- The next interim analysis from ACTION3, which could support accelerated global approvals if results stay strong.
- Full global enrollment of the trial by late 2025, including expansion into China.
- Potential ex-U.S. licensing deals that could further de-risk funding and validate the program.
Why still speculative?
Dimerix is still pre-revenue from product sales and depends entirely on the success of a single asset in a single indication. If ACTION3 fails to deliver, the company’s valuation could collapse. But if the trial meets endpoints and regulators approve DMX-200, Dimerix could transform from a micro-cap into a valuable global partner.
What Investors Should Watch
Both Mesoblast and Dimerix have entered critical phases where the next 12–18 months will determine their future paths. Key watchpoints include:
Mesoblast:
- Quarterly Ryoncil sales trajectory,
- Progress on Revascor’s BLA filing,
- Any ex-U.S. commercialization deals.
Dimerix:
- Interim ACTION3 trial results,
- Milestone payments from Amicus,
- Recruitment speed and regulatory feedback in the U.S. and China.
Risks to Keep in Mind
Speculative biotech stocks come with universal risks:
- Clinical failure: Even late-stage trials can disappoint, wiping out years of value.
- Regulatory setbacks: FDA or global regulators may demand additional studies or delay approvals.
- Funding needs: Despite current cash positions, prolonged timelines may force capital raises, diluting shareholders.
- Commercialization risks: Even with approvals, market uptake can be slower than expected.
Final Thoughts: Speculation With a Purpose
Mesoblast and Dimerix are not “safe” investments. They are classic speculative plays—capable of doubling or tripling in value if catalysts land, but also prone to sharp declines if things go wrong.
For risk-tolerant investors who understand biotech cycles, these two stocks represent rare asymmetric opportunities on the ASX in 2025. Mesoblast is finally stepping into commercial reality with its first FDA approval, while Dimerix is moving into the decisive late-stage trial phase with a strong global partner.
The outcomes are far from certain. But if both deliver as hoped, FY26 could mark the beginning of something much bigger. In biotech, that’s often how fortunes are made: one product, one approval, one breakthrough at a time.
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