Ann: Activities Report & Appendix 4C-CYP.AX, page-11

For some of the new HC investors in CYP that might not have read this.

Recently, the LA Times released an article highlighting the mounting evidence that stem cell treatments will be some of the highest priced treatments within the medical marketplace. Titled “Sky-high price of new stem cell therapies is a growing concern,” the author Michael Hiltzik explores the often exorbitant costs associated with stem cell procedures.
In a powerful statement that summarizes the author’s position, he writes, “The evidence is already mounting that stem cell and other advanced biologic treatments will be among the most expensive therapies in the medical arsenal.”
As examples of expensive cell therapy procedures, Hiltzik cites that Prochymal, a mesenchymal stem cell treatment approved in Canada, can costs as much as $200K, while Provenge, a cell-based vaccine for prostate cancer, can cost nearly $100K to extend a patient’s life by a few months.
Similarly, the U.S. Department of Health and Human Services website estimates that an unrelated bone marrow or cord blood transplant in the U.S. can cost from $100,000 to over $300,000 for the transplant and post-transplant care. While healthcare groups often provide some coverage for the procedure, they rarely cover the process of searching for a matched donor or cord blood unit, which can cost up to $50,000.
These price tags are disconcerting, given that stem cell treatments are some of the most promising treatment now in development. Within the past few weeks, research has been released suggesting that stem cells may be capable of reversing infertility in patients after chemotherapy, reversing HIV, and helping patients recover after a heart attack. Clearly, it is important that new stem cell treatments to enter the marketplace are priced to be accessible and utilized by a broad base of patients.
How to Address the Rising Costs of Stem Cell Treatments?
Knowing that stem cell therapies are positioned to be some of the most expensive treatments in the medical marketplace, how can individual companies (and the industry at large) address these “sky high costs”? Because the manufacturing process substantially impacts the final cost of a stem cell therapy, economically manufacturing stem cells will be a critical step forward.
As an industry, it will be essential to manufacture high-quality, reproducible, clinical-grade stem cells in mass quantities, at a reasonable cost.
Unfortunately, very few companies are able to meet this demanding set of criteria.
However, one company who is doing this successfully is a new player to the scene, Cynata Therapeutics (ASX: CYP). This Australian company has developed a therapeutic stem cell platform technology, Cymerus™, using discoveries made at the University of Wisconsin-Madison (UWM). Its Cymerus™ stem cell 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.
MSCs are of intense therapeutic interest, because they represent a population of cells with the potential to treat a range of acute and degenerative diseases. They are advantageous over other stem cells types for a variety of reasons. They avoid the ethical issues that surround embryonic stem cell research, and repeated studies have found MSCs to be immuno-privileged, which make them an advantageous cell type for allogenic transplantation. MSCs also being explored for use in 3D printing applications, because of their unique capacity to form structural tissues.
Furthermore, because MSCs are now being explored in more than 400 clinical trials worldwide, manufacturing approaches for this cell type will be of particular importance.
How Does Cynata Achieve a Cost-Savings Advantages?
Cynata has achieved a cost-savings advantage by taking an unusual approach to MSC manufacturing. Specifically, Cynata’s proprietary technology utilizes iPSCs originating from an adult donor as the starting material for generating mesenchymoangioblast (MCAs), and subsequently, for manufacturing therapeutic-grade MSCs. According to Cynata, it will use its proprietary Cymerus™ technology to “address a critical shortcoming in existing methods of production of mesenchymal stem cells (MSCs) for therapeutic use, which is the ability to achieve economic manufacture at commercial scale.”
Another key aspect of the Cymerus™ technology is that its use of iPSCs as source tissue allows MSCs to be produced in nearly limitless quantities. Therefore, Cynata will not have to spend company resources seeking out new stem cell donors to support its manufacturing demands.
With the company’s ability to economically manufacture stem cells, Cynata will be well-positioned for dominance within the cell therapy marketplace. Potentially, this breakthrough could also encourage a new standard of manufacturing efficiency within the stem cell industry. For investors interested in Cynata Therapeutics, see this recent interview with Cynata CEO, Dr. Ross Macdonald on Stock News Now (SNN), in which Dr. Macdonald discusses business strategy, market competition, the FDA approval process, and more.
To see the full article from the LA Times, titled “Sky-high price of new stem cell therapies is a growing concern,” click the title or visit this URL:
http://www.latimes.com/business/hiltzik/la-fi-hiltzik-20151010-column.html