Melbourne, Australia; 17 September 2019: Cynata Therapeutics Limited (ASX: CYP), a clinical-stage biotechnology company specialising in cell therapeutics, is pleased to announce that FUJIFILMCorporation (“Fujifilm”) has today exercised its license option in graft-versus-host disease (GvHD).
The exercise of the license option follows the successful completion of the Phase 1 clinical trial of CYP001 in GvHD (announced to ASX on 30 August 2018), where all safety and efficacy endpoints were ahieved.
Key highlights of the transaction...
• Fujifilm is granted an exclusive, worldwide license to develop and commercialise Cynata’s lead mesenchymal stem cell (MSC) product, CYP-001, for the prevention and treatment of GvHD in humans
o Cynata will receive US$3m cash from Fujifilm as an upfront fee.
o Fujifilm will bear responsibility for all costs of any further product development activities in relation to GvHD, along with responsibility for regulatory submissions and commercialisation.
o The non-dilutive upfront payment of US$3m will lengthen Cynata’s cash runway and support further investment in the upcoming Phase 2 trials in critical limb ischemia (“CLI”) and in osteoarthritis, along with other potential future clinical programs.
o Cynata will potentially receive additional future milestone payments from Fujifilm totalling up to US$43m based on successful attainment of certain industry standard product development and commercial milestones, the first of which is US$2m on completion of the first Phase 2 clinical trial in USA, UK or Japan. Subsequent milestones are completion of Phase 3 clinical trials (US$3m), submission of applications for regulatory approvals (US$12m), acceptance of geographic marketing authorisations and first sales (US$16m) and extending the indication (US$10m).
o Cynata will receive a 10% royalty on all future product sales if the licensed product is successfully commercialised in any country in which any licensed patents are granted or pending.
o Having sub-licensed certain patent rights licensed-in from the Wisconsin Alumni Research Foundation (“WARF”) in respect of Cynata’s Cymerus™ technology to Fujifilm, Cynata will be required to make a one-off cash payment to WARF of US$10,000. Cynata is also required to pay WARF a mid-single digit percentage royalty on Fujifilm product sales and 30% of other amounts received from Fujifilm, including in respect of milestone payments.
o Both Fujifilm and Cynata have rights to terminate the license under certain conditions such as material breach and bankruptcy and failure to use reasonable efforts to achieve certain specified milestones. The agreement also includes limited mechanisms for potential royalty adjustment on termination of the WARF Head License, entry of a generic competitor or in-licensing third party enabling technology.
Fujifilm and Cynata will enter into a separate agreement for the supply of product by Cynata for certain future product development activities at cost plus a moderate doubt digit manufacturing margin
• The endorsement by Fujifilm of Cynata’s Cymerus platform supports the continued commercialisation of Cynata’s cell therapeutic products in other indications, including CYP002 for critical limb ischemia (CLI) and CYP-004 for osteoarthritis
To facilitate Cynata’s ongoing partnering efforts certain amendments have been made to the license agreement between Cynata and WARF, particularly in relation to sub-sublicensable sub-licenses under the WARF patents and extending certain interim development milestones, whilst not changing the current milestone for obtaining approval from the U.S. Food and Drug Agency (or an equivalent foreign agency) in 2026.
Dr Ross Macdonald, Cynata’s Chief Executive Officer, said, “Fujifilm’s decision to exercise its license option in GvHD is a clear validation of our Cymerus platform technology solution for manufacturing MSCs at scale.
We now look forward to Fujifilm taking this product through further clinical development activities and subsequently to market.”
CYP Price at posting:
$1.42 Sentiment: Buy Disclosure: Held
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