Ferret's Stock to Watch: CYGENICS LIMITED
09:04, Friday, 8 September 2006
A LOCAL BIOTECH COMPANY DEVELOPING TISSUE AND CORD BLOOD
Sydney - Friday - September 8: (RWE Aust Business News)
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OVERVIEW
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CyGenics Ltd (ASX:CYN) has a lot of paths to tread as a stem cell
therapy services company and directors are taking the commercial
direction to enable the company to develop its core revenue-generating
tissue and cord blood banking businesses.
This was the message CyGenics gave to its shareholders and the
market yesterday.
The company has continued to show substantial growth in numbers
of clients and revenue.
In the past financial year CyGenics's tissue and cord blood
banking businesses produced an increase in revenues of more than 115 per
cent.
Included in this revenue was tissue banking annuity revenue,
which rose 216 per cent and is budgeted to more than double this year.
Total client numbers currently exceed 6,000 and over the past
year rose by 73 per cent.
CyGenics is expecting a higher number of new clients in the
current year.
This growth took place across the company's existing markets,
namely Australia, Hong Kong, Indonesia, Philippines, Singapore and
Thailand.
The company expects client numbers and revenue to be boosted
further when CordLife India becomes fully operational in mid-2007.
CyGenics says it will continue to expand its tissue banking
businesses into new geographic markets, notably those with a significant
population base and higher disposable incomes.
One such market is China, where management has been sourcing
appropriate opportunities for the past five years.
A Shanghai-based subsidiary was established in 2003 in
preparation of implementing the right opportunity.
A number of "exciting transactions" in the Asian region, the UK
and Europe are under assessment.
CyGenics will seek out-licensing partners for its stem cell
expansion and T-cell production technologies and potential partnering
opportunities have already been identified.
This will enhance further development of the technologies.
The management and funding of the development programs will be
managed by the partners.
The Cell Sciences division was established in Singapore in
September 2003 and has now been sold.
The company also markets and distribute medical and research
products in Asia.
It has developed, commercialised and commenced marketing a range
of disposable cell growth devices.
These devices replace glass cell growth vessels generally in use
today, and part of the range incorporates the patented, three-dimensional
cell growth matrix, the Cytomatrix.
Established in May 2001 in Singapore, CordLife is a
fee-for-service tissue banking company.
CordLife initially focused on umbilical cord blood banking, but
is expanding its services into peripheral blood stem cell, and other
tissue banking.
From its base of operations in Singapore, CordLife has been
providing its cellular banking services across the Asian region, and has
plans for wider expansion.
Cytovations provides consulting services to assist facilities in
achieving and maintaining accreditation and regulatory requirements at
all levels of manufacturing, basic and applied research.
It provides worldwide consulting services in the area of quality
management and technical applications for accreditation and governmental
compliance bodies in the area of cell therapy (cord blood, peripheral
blood progenitor, cells, and bone marrow) and at various levels of
manufacturing, applied, and basic research.
SHARE PRICE MOVEMENTS
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Shares of CyGenics yesterday edged up 0.5c to 24.5c. Rolling
high for the year was 50c and low 19.5c. The company has 68 million
shares on issue with a market cap of $13.2 million. The market may well
have been pressured recently after 16.7 million shares came out of
escrow on June 2.
However, last month, the company disposed of its wholly owned
subsidiary, Cell Sciences Pte Ltd, in exchange for a 20 per cent equity
in DNAPro Sdn Bhd.
Cell Sciences is primarily a distributor of various medical and
research products.
DNAPro is a Malaysian company engaged in manufacturing and
trading biopharmaceutical products.
These include hepatitis B vaccine (recombinant), and anti-cancer
and anti-AIDS vaccines.
It supplies various medical products to the Malaysian government
and the private sector.
"We have long wanted to tap into the growing healthcare sector
in Malaysia," said Steven Fang, Group CEO.
"DNAPro is the partner we have been looking for.
"Our exchange of Cell Sciences for a minority interest in
DNAPro, is expected to provide an improved return, partially from the
synergies generated.
"Further, this transaction allows us to better focus on our core
revenue generating activity of cord blood banking, which has seen annual
growth in excess of 70 per cent.
"It is further expected that this arrangement will provide the
CyGenics group, which will have a representative on DNAPro's board, with
enhanced access to the Malaysian healthcare markets, and enable
cross-selling and licensing of DNAPro's products via CyGenics's
international network," Mr Fang said.
CyGenics now has a business presence in Australia, Hong Kong,
China, India, Indonesia, the Netherlands, the Philippines, Malaysia,
Singapore, Thailand, the UK and the US.
"DNAPro is now part of a growing global family," said Dr Halim
Bin Hamat, managing director of DNAPro.
"Our association with CyGenics will help open doors for our
growing vaccines business into other parts of the world.
"The acquisition of Cell Sciences in particular, with its
established relationships with various healthcare establishments, will
help drive DNAPro's business forward," Dr Halim added.
BACKGROUND
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CyGenics Ltd was listed on the Australian Stock Exchange on June
18, 2004.
The company CyGenics is an international cell therapy company
focused on the development and commercialisation of adult stem
cell-related products, services, applications and technologies.
From its headquarters in Australia, CyGenics operates four
subsidiaries: Singapore-based CordLife (tissue banking services, in
particular, cord blood banking); BioCell, a cord blood bank in Melbourne;
Cytomatrix (cell therapeutics and technology development) and Cytovations
(consumable cell culture products and new product development) based in
New Jersey.
In June the stem cell therapy company completed its strategic
investment of an initial 20 per cent stake in Dutch-based Pharmacell BV,
with an option to purchase the remaining 80 per cent at a later date.
As announced in April, an investment in Pharmacell enables
access to a Food and Drug Administration approved Good Manufacturing
Practices facility, positioning CyGenics as a vertically-integrated cell
therapy group.
CyGenics now offers:
* Cell therapy manufacturing services - Pharmacell
* Cell and tissue banking services - CordLife and BioCell
* Cell-based therapeutic products and cell growth device
products - CytoVations and Cytomatix.
ENDS
CYN
cygenics limited
