Cynata Therapeutics (ASX: CYP) has executed a term sheet with FUJIFILM Corporation of Japan for the development and commercialisation of certain Cynata technology, including Cynata’s lead product, CYP-001. CYP-001 is an induced pluripotent stem cell (iPSC) derived mesenchymal stem cell (MSC) product that is anticipated to be the first allogeneic iPSC product to enter a clinical trial.
Cynata filed an application with the UK Medicines and Healthcare products Regulatory Agency (MHRA) in August 2016 to initiate a Phase I trial in patients with graft-versus-host disease (GvHD).
While originally a company centered around photographic film technology, FUJIFILM Corporation has redirected in recent years to invest heavily in regenerative medicine applications, stating that it intends to be the “number one company in regenerative medicine.” FUJIFILM has a market capitalization of 17.19B, making it a massive player in the regenerative medicine space.
Moreover, Fujifilm has been strengthening its presence in the regenerative medicine field over several years, by acquiring a majority of shares of Japan Tissue Engineering Co. in December 2014 and purchasing Cellular Dynamics International (CDI) in March of 2015 for $307 million. Based in Madison, Wisconsin, CDI is a global leader in induced pluripotent stem cell (iPSC) technology, with over 800+ patents related to pluripotent stem cells and annual revenues in excess of $16 million.
Cynata Therapeutics Announces Term Sheet Executed with FUJIFILM Corporation
On September 5th, 2016, Australian stem cell and regenerative medicine company, Cynata Therapeutics Limited (ASX: CYP) announced the execution of a term sheet with FUJIFILM Corporation of Japan for the “development and commercialisation of certain Cynata technology, including Cynata’s lead induced pluripotent stem cell (iPSC) derived therapeutic mesenchymal stem cell (MSC) product, CYP-001.”
CYP-001 is the lead product developed utilizing Cynata’s Cymerus™ stem cell platform, a technology which originated from the University of Wisconsin-Madison, a world leader in stem cell research. The proprietary Cymerus™ technology addresses a critical shortcoming in existing methods of production of mesenchymal stem cells (MSCs) for therapeutic use, which is the ability to achieve economic manufacture of MSCs at commercial scale.
Specifically, Cynata’s Cymerus™ technology utilizes a flexible type of stem cell, known as a mesenchymoangioblast (MCAs). MCAs are a precursor of mesenchymal stem cells (MSCs), which are multipotent stem cells that can differentiate into a variety of cell types, including osteoblasts, chondrocytes, myocytes, adipocytes, beta-pancreatic islets cells, and potentially, other cell types.
Because the Cymerus™ technology utilizes induced pluripotent stem cells (iPSCs) to produce mesenchymoangioblasts and subsequently differentiates those cells into mesenchymal stem cells (MSCs), its stem cell product is independent of donor limitations and provides a potential “off-the-shelf” stem cell platform for therapeutic product use. Therefore, Cynata does not have to spend company funds to acquire new stem cell donors to support its manufacturing demands.
Stated clearly, Cynata’s “major breakthrough” in mesenchymal stem cell (MSC) manufacturing is its ability to produce unlimited quantities and uniform batches from a single donor at low cost.
These advantages position Cynata as an ideal partner for FUJIFILM, a company that is actively seeking to strengthen its presence in the regenerative medicine field, while simultaneously leveraging its existing expertise in material science, engineering, and quality management systems.
Specifications of Cynata’s Term Sheet with FUJIFILM Corporation
According to the recently announced term sheet, Cynata would grant FUJIFILM an option to an “exclusive, worldwide licence to market and sell Cynata’s lead MSC product for prevention and treatment of graft-versus-host disease (GvHD), as well as (a) an option to negotiate a licence for manufacturing those products, and (b) certain rights to Cynata’s proprietary Cymerus™ technology for the prevention and treatment of other diseases.”
Other elements of the term sheet include:
- FUJIFILM to make a direct investment in Cynata by way of the acquisition of Cynata shares to the value of US$3 million, with such shares to be priced at, in consideration for the rights granted under the agreement, a 35% premium.
- Cynata may receive certain upfront and milestone payments, together with a royalty on end product sales.
According to Cynata CEO Dr. Ross Macdonald, FUJIFILM is “one of the most dynamic and progressive companies in the global regenerative medicine space.” Additionally, Macdonald states that the “proposed acquisition by FUJIFILM of shares in Cynata at a substantial premium is a strong vote of confidence in Cynata’s unique technology.”