Following a successful phase one clinical trial, FUJIFILM Corporation (Fujifilm) has exercised its option to commercialise Cynata Therapeutics’ (ASX: CYP) mesenchymal stem cell product which can treat and prevent graft-versus-host disease in people.
Under the licencing deal, Cynata will receive an upfront fee payment of US$3 million from Fujifilm. Upon reaching future milestones, Fujifilm will potentially pay Cynata a further US$43 million.
The first milestone payment of US$2 million will be handed over at the completion of a phase two clinical trial, with the next US$3 million to be paid at the end of phase three clinical trials.
In addition to the milestone payments, Cynata will receive a 10% royalty on all future sales of its product in regions where patents have been granted or pending.
“Fujifilm’s decision to exercise its licence option in graft-versus-host disease is a clear validation of our Cymerus platform technology solution for manufacturing mesenchymal stem cell at scale,” Cynata chief executive officer Dr Ross Macdonald said.
“We now look forward to Fujifilm taking this product through further clinical development activities and subsequently to market,” he added.
Cynata has sub-licenced some of the Cymerus patent rights from Wisconsin Alumni Research Foundation to Fujifilm, and as a result, Cynata is required to hand over a one off US$10,000 payment to Wisconsin Alumni Research Foundation.
Cynata will also pay Wisconsin Alumni Research Foundation a mid-single digit percentage royalty on Fujifilm product sales and 30% of other amounts received from Fujifilm, including milestone payments.
Cymerus mesenchymal stem cell technology
Earlier this month, Cynata revealed its preclinical study on its Cymerus mesenchymal stem cell product in preventing organ transplant rejection had been accepted for publication in the Stem Cell Research Therapy journal.
The study was carried out at the King Faisal Specialist Hospital and Research Centre in Saudi Arabia, which runs the largest organ transplant program in the Middle East – undertaking 1,500 transplants in 2017.
In the study, wind pipe transplants were performed on mice – a procedure that normally results in rejection of the transplanted material.
Mice were randomly given a single intravenous injection of Cymerus mesenchymal stem cell or a placebo a day prior to the transplant.
Cymerus mesenchymal stem cell demonstrated Cynata’s expected effect in preventing organ transplant rejection.
The treatment also suppressed inflammation, reinstated graft functional microvascular blood flow and oxygenation, prevented harmful collagen deposition and limited injury to the transplanted organ.
A clinical trial using the technology in graft-versus-host disease was completed late last year and resulted in 13 out of 15 patients showing an improvement in disease severity following treatment with Cymerus.
By mid-morning, Cynata’s share price had surged 20% to trade at $1.71.