CYP (ASX) Wilson desk note

Originally posted by Apocalypso ↑

I've been watching this one for a long time and am similarly long in the stock. Nice to see some real interest starting to develop. I'm not an active poster but I thought this worth another look: see this from Wilson's Insto sales desk from June 29:

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Column 1Cynata Therapeutics (CYP) – Buy IdeaWe recently caught up with management after they released some positive trial data for their Stem Cell product candidate in Steroid-resistant acute graft-versus-host disease (GvHD). It would appear this one is not well held in the market and well worth the time to take a look considering the catalysts over the next 12 months. We’ve asked some rhetorical questions to try and peak your interest: What are Mesenchymal Stem Cells (MSCs)? They are a potent form of stem cell which are believed to play a vital role in repair and regeneration in the human body. MSC’s were approved for use as a therapeutic treatment in Japan and Europe which has sparked escalated trial interest in the space. The Japanese approval explains Fuji Films interest in Cynata. Where does Cynata come into it and what can the company do?Cynata has the only platform in the world that can produce commercial quantities of MSCs from a single source which are of consistent quality whilst maintaining potency. Being able to produce the cells on a commercial scale has proved problematic for other companies in the past. Are Cynata solving a problem?Yes, current methods of MSC harvesting are not scalable. Multiple donors are required leading to variability in the cells. Growing the harvested cells on mass scale reduces the potency of the MSC cell. This is partly why larger phase III trials using mass produced MSCs fail. The more you split the MSC cell = less potent = less effective. An example of this is the failed Phase III trial by Osiris Therapeutics (see article here).Cynata How do Cynata do it? Instead of harvesting MSCs, Cynata harvest a more primitive type of stem cell via the blood called Induced Pluripotent Stem Cells (IPSCs). The IPSCs have less replicative senescence, another way of saying they can be divided more times without losing potency. Cynata then use those IPSCs to produce a particular type of MSC called a Mesenchymoangioblast (MCA) which can be used for therapeutic treatment. Cynata have the most IP protection over the process of turning IPSCs into MSCs or MCAs What therapeutic treatment are Cynata doing trials in?Although MSCs can potentially be applied for use in many therapies, Cynata are currently doing a Phase 1 Clinical Trial for the treatment of adults with Steroid-Resistant Acute Graft Versus Host Disease (GvHD). Results have been positive so far, please the desk a call if you need more detail here. How does Fujifilm (Fuji) fit in?In Jan 2017 Cynata executed a license option agreement for the development and commercialisation of certain Cynata tech with Fuji, including Cynata’s lead induced pluripotent stem cell (iPSC)-derived therapeutic mesenchymal stem cell (MSC) product, CYP-001, for graft-versus-host disease (GvHD). Fuji also acquired a ~9% stake in the company. The option is exercisable anytime up to 90 days after the completion of the primary evaluation of the current trial which is already yielding positive data. On that basis Fuji will likely have to exercise the option by 1QCY19 which will a major positive catalyst for the stock. On exercise Cynata will receive US$3m upfront together with other potential furture milestones totalling up to US$60m not including double digit royalty payments. If fuji exercise they have also agreed to pay for all future development costs of CYP-001. So what Next? Next positive catalyst is the 100 day data from the current trial. Also, the company is also looking at the next therapeutic treatment they can look to trial and ultimately partner in. If Fuji pull the trigger early then ultimately that would be a very large head turner and get people very excited. You often look like you’re speaking another language when trying to talk these type of names so please call the desk if you need more information. The stock looks under owned, and under covered in micro-cap land. We think this one is worth a serious look, BUY

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The stock looks under owned, and under covered in micro-cap land.

"Tell them they're dreaming son"

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2	19841	24.0¢

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1	21404	0.230
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0.260	38000	1
0.270	70000	1
0.275	30000	1
0.280	60983	2

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(20min delay)
Last 24.0¢		Change -0.010(4.00%)		Mkt cap ! $43.36M

Open	High	Low	Value	Volume
25.0¢	25.5¢	24.0¢	$8.739K	34.96K

The stock looks under owned, and under covered in micro-cap...

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