Came across this article...
From merger market today.
ASX:CYP], an Australian stem cell and regenerative medicine company, will seek a trade sale this year once it has secured two to three licensing deals for its mesenchymal stem cell (MSC) technology, Chairman Stewart Washer said.
The AUD 63m (USD 48.5m) market capitalization company will engage financial advisors for the sale after the first licensing agreement is executed, which could take place over the coming months, Washer said.
The company will seek to work with advisors and will welcome initial interest from potential suitors at that time, he said. Cynata has used Perth, Australia-based Forrest Capital as financial advisor previously, as reported.
“I think 2015 is the year of the deal,” Washer told Mergermarket.
The Victoria, Australia-based company is currently in licensing talks with several companies in the US, Japan and Europe regarding its MSC technology, and the deal structure could either involve up-front payment or milestone payment, among others, the chairman said.
The share price of Cynata is expected to significantly increase upon the inking of each licensing agreement, after which it expects to be an attractive target to larger suitors, Washer said. It could achieve multiples of between 10x and 20x its current share price from bidders once it has secured several licensing deals and proved the commercialization potential of its MSC technology, he added. Cynata last traded at AUD 0.95 per share on 19 March.
Cynata's Cymerus platform stem cell technology is based upon extremely important and versatile stem cells known as mesenchymoangioblasts (MCAs). MCAs are a precursor of mesenchymal stem (or stromal) cells (MSCs) which are at the forefront of a new generation of treatments being investigated for devastating diseases such as osteoarthritis, Crohn’s disease and heart disease. Cynata’s proprietary technology utilizes induced pluripotent stem cells (iPSCs) originating from an adult donor as the starting material for generating MCAs, and in turn for manufacturing MSC therapeutic products, according to the company’s website. .
The company recently appointed founding CEO of Arana Therapeutics John Chiplin to the board to tap into his deals experience as he has been directly involved in several M&A transactions in recent years, Washer said. Arana was in 2009 acquired by Cephalon, which is a wholly-owned subsidiary of USD 57.5bn behemoth Teva Pharmaceutical Industries [NYSE:TEVA], as reported.
Cynata retained New York-based PCG Advisory Group in February to help it seek investors in the US, according to an ASX statement. The company is currently undertaking a roadshow in the US and Hong Kong to attract international investors, Washer said.
It is targeting family offices, high net-worth individuals, as well as small institutions and funds, the chairman continued.
Meanwhile, Cynata is no longer seeking to raise USD 30m this year to launch its phase II clinical study for a drug to treat graft-versus-host disease (GvHD), as previously reported. It is fully funded for the next two years and is currently undertaking a pre-clinical program that will form the basis of its phase I clinical study, washer said.
Celtic Capital (4.01%) is the company’s major shareholder, according to a January ASX announcement.
by Adam Orlando in Perth
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