The Mesoblast Ltd (ASX: MSB) share price is having a tough finish to the week.

In afternoon trade, the stem cell focused biotechnology company's shares are down almost 4% to 86.5 cents.

While this is disappointing, shareholders won't be too concerned.

After all, even after today's decline, the Mesoblast share price is up approximately 190% since this time last month.

To put that into context, a $10,000 investment a month ago would now be worth around $29,000.

But if you thought the gains were over, think again. That's because analysts at Bell Potter are tipping the company's shares to continue their meteoric rise.

According to a note out of the broker this afternoon, its analysts have retained their speculative buy rating and lifted their price target by 141% to $1.40 (from 58 cents).

Based on the current Mesoblast share price, this implies potential upside of 62% for investors over the next 12 months.

The broker made the move in response to feedback the company received from the US Food and Drug Administration (FDA) last month. It explains:

Using carefully chosen words, the FDA has informed MSB that the available clinical data from its Phase 3 study MSB-GvHD001 in children with steroid refractory acute graft versus host disease (SR a GvHD) appears sufficient to support resubmission of the Biological Licence Application (BLA) for Remestemcel.

It believes the timing of the correspondence is not a coincidence.

The timing of the correspondence coincides with refreshed leadership at the newly formed Office of Therapeutic Products (OTP) within CBER at the FDA and the release of draft industry guidance for demonstrating effectiveness in one adequate, well controlled clinical investigation with confirmatory evidence.

While approval is by no means guaranteed, Bell Potter is feeling a lot more confident now.

Approval would be good for investors for a couple of reasons. One is that it means meaningful revenue generation may not be far away. The other is that it could open the door to further use cases in the near future. The broker concludes:

Our best estimate for approval of Remestemcel is mid August 2024. The planned adult study in GvHD has for the moment been postponed pending the outcome of the resubmitted BLA. Valuation is increased from $0.58 to $1.40 reflecting significant changes to revenue forecasts bought about by renewed confidence for a prospective approval for Remestemcel in Paediatric GvHD later this year. A first approval may represent a gateway to a series of label expansions in the ensuing period as reflected in the share price movement in recent days.

The Mesoblast share price remains down 11% over the last 12 months despite its recent surge.