2020 - A Year Full Of Potentials, page-482

With almost half the year now gone since my initial post (btw, same applies to our Shareprice), it might be time to do a quick re-cap.

A brief summary below. Please feel free to add to it

The 3 confirmed II’s, now with a twist:

P2 trials to commence for:

· Critical limb ischemia (US $1.4bn market opportunity), expected to commence in early 2020 This trial has been approved by both the MHRA (UK) and the Melbourne Health HREC (AU), but due to COVID-19 restrictions has been placed "on hold", as patients with CLI would be at higher risk of developing serious complications due to a possible infection. Once restrictions have been lifted, with the trial being approved, the trial would/should be in a position to commence.
https://www.asx.com.au/asxpdf/20200508/pdf/44hntq4zn3h7kb.pdf

· Osteoarthritis (US $11.6bn market opportunity), one of the largest MSC trials yet and by far THE largest iPSC trial (448patients), led by the University of Sydney and substantially funded by theNHMRC – with full commercial rights retained by Cynata, expected to commence inQ1 CY2020
- A perfect opportunity to showcase the Cymerus next generation MSC manufacturingcapability Although some might say it is "only" a TGA/Australian trial (so far), the prospect of getting a foot in the door in a market that could substantially reduce the $23 billion per year bill to the government (both direct and indirect costs considered), which (OA) affects currently more than 2.2 mio Australians. As such, it is "a leading cause of pain, disability and early retirement" (data from November 2018). As such it is not that surprising that the Govt. would be happy to offer a free "upgrade" for a product, that Professor David Hunter, one of the leading experts in Australia... sorry, the world... in Osteoarthritis, considers the "gold standard in MSCs". His previous studies produced "strong evidence that a good MSC product could be effective in Osteoarthritis".
https://www.sydney.edu.au/news-opinion/news/2018/11/28/how-to-cut-the--23-billion-bill-for-osteoarthritis.html
https://www.bioworld.com/articles/436033-australias-cynata-ahead-of-the-pack-as-it-progresses-ipscs-to-phase-iii-osteoarthritis-trial?v=preview

· Graft vs. Host Disease (US $0.3bn), with costs fully borneby our Japanese partner FujiFilm, expected to commence before the end of 2020 A FujiFilm update would be kindly appreciated. However, with their focus more towards COVID-19 in general and Avigan in particular, it is understandable that this has not happened yet.

• COVID-19/ARDS clinical trial (market opportunity TBD), a fast-tracked trial approval based on Cynata's compelling pre-clinical (animal) data in ARDS, Sepsis and Cytokine Release Syndrome (CRS), will allow Cynata to apply their lead product CYP-001 in a short 24 patient clinical trial to patients with COVID-19/ARDS, with the possibility to extend this trial to other countries. Perhaps it might be a good time to pick up the conversation with the FDA and finally turn our pre-IND meetings into actual IND meetings. Perhaps this fast-tracked trial could be converted into a general ARDS trial further down the track?!".
  https://www.asx.com.au/asxpdf/20200508/pdf/44hntq4zn3h7kb.pdf

The possibilities:

Pre-Clinical tests completed and P2 ready:

· Heart Attack (US $18.2bn market opportunity):
“Dr Kilian Kelly, Cynata’s Vice President, Product Development, said: ‘These very encouraging results add to a growing body of evidence showing that Cymerus MSCs may have an important role to play in the treatment of a wide range of diseases. There is still a huge unmet medical need associated with heart attacks, which cause over 8,000 deaths and more than 50,000 hospitalisations each year in Australia alone. We are optimistic about the potential benefits that Cymerus MSCs could bring to patients who experience these life-changing events.’” Unchanged
http://files.cynata.com/364/18.07.31.Cymerus-MSCs-improve-cardiac-recovery-in-preclinical-study.pdf

· Brain Cancer/Glioblastoma (US $3.3bn market opportunity by2024):
“Professor Shah commented, ‘Our results validate the use of this cell-based approach, as it provides a continuous pool of therapeutic protein around the tumour cells, circumventing the protein short half-lives. Overall, the study outcomes support the use of engineered Cymerus MSCs for cell therapy to target various malignancies.’” Unchanged
http://files.cynata.com/386/18.10.18.MSCs-Demonstrate-Anti-Cancer-Effects-in-Pre-Clinical-Studies.pdf

· Diabetic Wounds (US $4.9bn market opportunity by2024):
“Dr Leanna Read, CTM CRC’s Chair and CEO, said, ‘Rapid wound closure reduces the risk of infection and wound management costs, and improves health outcomes for patients. Our studies show that delivery of Cymerus MSCs via CTM CRC’s proprietary polymer-coated dressing can accelerate reepithelialisation and wound closure when compared to the dressing alone or treatment with commercially produced bone marrow-derived MSCs. We need only a small number of MSCs to seed the dressing, so we expect that this product could be produced at a low cost and positioned very competitively against existing treatment options.’” Unchanged
http://files.cynata.com/348/18.05.31.Cynatas-MSCs-Effective-in-Model-of-Diabetic-Wounds.pdf

· Cytokine Release Syndrome (market opportunity TBD):
“Dr Kilian Kelly, Cynata’s Vice President, Product Development, said, ‘Cancer immunotherapy is one of the most exciting fields in medicine today, offering a potentially curative treatment option to patients with otherwise intractable and advanced disease. However, CRS is a common, unpredictable and potentially fatal complication that may limit treatment uptake. These results suggest that administering a single dose of Cymerus MSCs before, during or even shortly after cancer immunotherapy treatment may provide significant therapeutic benefit and a straightforward way of limiting adverse CRS reactions. We look forward to continuing to explore the benefits of our MSCs in humans through partnerships with companies commercialising cancer immunotherapies, such as CART.’” Unchanged
http://files.cynata.com/374/18.09.19.Cynata-MSCs-Ameliorate-CRS-in-Preclinical-Study.pdf

· Asthma (US $25.6bn market opportunity by 2024):
Standalone treatment – “‘The combination of Cymerus MSCs and dexamethasone resulted in maximal improvement for each endpoint measured. Hence, it can be concluded that such a combination therapy has the potential to improve treatment outcomes in asthmatic patients,’ said Associate Professor Samuel.
[…]
Dr Kilian Kelly, Cynata’s Vice President, Product Development commented: ‘These findings further strengthen the body of evidence supporting the use of Cymerus MSCs as a potential asthma treatment. In addition to confirming that Cymerus MSCs had a greater effect than corticosteroid treatment on several key manifestations of asthma in this model, these results provide clear evidence that Cymerus MSCs can work in synergy with corticosteroids. Overall, the resultssuggest that Cymerus MSCs could be used as a standalone treatment, for example in patients who are unable to tolerate corticosteroids, or as an add-on therapy in patients who are unable to gain control of their condition with existing medications’.”
http://files.cynata.com/307/17.12.11.Final-Preclinical-Asthma-Study-Confirms-Efficacy.pdf
Combo treatment – “Results suggest that the combination of Cymerus MSCs with corticosteroids may be a viable treatment option offering the potential of superior asthma control” Unchanged
http://files.cynata.com/463/19.02.25.Further-Cynata-Asthma-Study-Published.pdf

· Organ Transplant Rejection (market opportunity TBD):“Dr Khan commented, ‘We are very excited by these results. Based on our findings, we believe that a clinical trial of Cymerus MSCs is warranted, as a potential option for immunosuppression in organ transplant recipients.’” Unchanged
http://files.cynata.com/506/19.09.04.Cynata-transplant-rejection-study-accepted-for-publication.pdf

· Sepsis (US $5.9bn market opportunity by 2026):“Professor Curley said, ‘There is a critical need for new therapies to treat sepsis, which is a devastating condition that can affect people at any stage of life without warning. These exciting results give us grounds for optimism that Cymerus MSCs could provide a new treatment option for these patients.’” Unchanged
http://files.cynata.com/541/19.12.05.Cymerus-MSCs-Effective-in-Preclinical-Model-of-Sepsis.pdf

(see CynataASX announcement dated 01 November 2018 for more detailshttp://files.cynata.com/390/18.11.01.Cynata-Outlook-and-Investor-Presentation.pdf)

COVID-19 likely had an impact on the above. Having said that, I wish there would be a more pro-active approach promoting the above...

Pre-Clinical tests with possible positive outcomes:

· Coronary Artery Disease, with an Australian GovernmentGrant awarded to progress the development:
“The additional project, which is expected to complete by the end of 2020, seeks to build on the previous findings by profiling the pro-angiogenic factors released from the primed MSCs, establish the ability of primed cells to promote new blood vessel formation in vivo, followed by in vivo safety and efficacy in a preclinical model.”
http://files.cynata.com/527/19.10.28.Cynata-Awarded-Grant-for-Coronary-Artery-Disease-Study.pdf

· Acute Respiratory Distress Syndrome, funded by a group of bodiesincluding the Queensland State Government:
“’We are very optimistic about the potential benefit that MSC therapy can bring to these critically ill patients, and this study in combination with ECMO is a crucial step towards clinical trials. We are delighted that Cynata has joined this collaborative project. Their manufacturing process has the potential to overcome some of the challenges that we have previously identified with donor-derived MSCs,4 including batch to batch inconsistency and problems with scalability, so we look forward to evaluating their cells in our model’, said Professor Fraser.”
http://files.cynata.com/260/17.04.11.CYP-in-Collaboration-on-Acute-Respiratory-Distress-Syndrome.pdf This pre-clinical test has since been completed and data collected was used to obtain approval in a ARDS/COVID-19 clinical trial.
https://www.asx.com.au/asxpdf/20200417/pdf/44h0wzmr2tmfjk.pdf

· Brain Cancer / Glioblastoma:
“Further engineered MSC pipeline developments in planning stage” http://files.cynata.com/528/19.10.30.Cynata-Corporate-Presentation.pdf

· Industrially scalable biomaterials that facilitate the expansion and delivery of MSCs, withfunding received under Victorian Medical Research Accelerator Fund: http://files.cynata.com/467/19.03.11.Joint-Study-of-Cynata-MSCs-Receives-VMRAF-Funding.pdf

Possible updates:

· FDA interaction:
“FDA Meeting Provides Clear Path for Cynata US Development Plans” Unchanged, and at the back of the current ongoing pandemic and after sadly seeing a new record number of new infections in the US yesterday, it would be - in my humble opinion - careless not to pursue any further discussions. Once again, well done to MSB and SI for pursuing the FDA avenue and having an IND and a product in place, when needed.
http://files.cynata.com/282/17.07.05.FDA-Meeting-Provides-Clear-Path-for-US-Development-Plans.pdf

· Health Canada:
“Health Canada Meeting Advances Cynata’s Global Development Plans”
http://files.cynata.com/289/17.08.31.Health-Canada-Meeting-Advances-CYP-Global-Development-Plans.pdf

· Although reading it in almost every single announcement, it feels like we are closer than ever to our second and this time more lucrative deal, or even another takeover approach (just remember to offer a fair price this time )
“Cynata continues to focus on early commercialisation of Cynata’s Cymerus MSC products, and is in active commercial discussions for numerous therapeutic targets”
http://files.cynata.com/539/19.11.27.Cynata-AGM-Presentation.pdf

Additional updates/announcements not covered:

• More Patents in Israel and Japan... yay...
• The loan ordeal seems to be coming to an end with directors selling a chunk of their holding below the current SP and prior to OA P3 upgrade, which saw our fourth largest trading volume day over the past 3 years. Interesting that this was done as mentioned above at such a low price when the loan still had another year to go... And based on what's in the pipeline, it really begs the question if we should call the Scorpions to get ready to perform "Wind of Change" at Lygon Street any time soon... hmmm...
• Two placements have taken place, that in addition to the loan repayments and the R&D Tax Incentive Refund put us in a comfortable position going forward, especially considering that OA and GvHD are fully funded.
• Announcement of a new Non-Executive Director with a CSL past is a very welcome addition to the board. Time will tell what the plans are and what he can contribute.
  

Especially the most recent OA P3 clinical trial upgrade makes you wonder where CYP could be going MC/SP wise, given the comparison to MSB's (MC about $2 billion) most recent success in the MSC and PAR's (MC about $850 mio) success in the OA sector.
At this stage, CYP with a MC of currently $74 mio, appears to be the somewhat badly behaved, sometimes even ill-advised, very young love child of MSB and PAR. Not too late to get this littler bugger on the right track I would say.