AAP Finance

Fujifilm licenses Cynata stem cell option

By AAP Newswire

Japanese multinational Fujifilm has exercised its option to license a stem cell-based treatment being developed by a small Melbourne biotech company.

Fujifilm is licensing CYP-001, Cynata Therapeutics's treatment for graft-versus-host disease, a rare but potentially lethal complication from bone marrow transplants including for leukemia.

"Our product represents an extraordinary breakthrough in the treatment of this disease," Cynata chief executive Ross McDonald told AAP.

Graft-versus-host disease occurs when immune cells from a transplant (the graft) see the recipient's cells (the host) as foreign and attack them, causing inflammation throughout the body.

Serious cases can be treated with high-dose steroids and immunosuppressants, but in about half of cases the patient fails to respond to treatment and the consequences are generally deadly.

Dr McDonald said Cynata's CYP-001 treatment, an infusion of millions of stem cells, work to control and mediate the immune response.

A phase I clinical trial in 2018 showed that 14 out of the 15 graft-versus-host disease treated with CYP-001 showed improvement.

Fujifilm said it would start a company-sponsored clinical trial in Japan before the end of 2020.

Dr McDonald said the validation from a major pharmaceutical company was a very important step for Cynata as a small biotech company.

While famous for its photographic film business, Fujifilm had the foresight to diversify into health care at the start of the century as cameras transitioned to digital.

Cynata will receive $US3 million ($A4.4m) from Fujifilm as an up-front fee and stands to get up to $US43 million ($A62.7m) more in future milestone payments, as well as 10 per cent royalties if the drug is successfully commercialised.

Cynata shares were up 16.6 per cent to $1.655 at 1108 AEST.

Dr McDonald said the Cynata board was also continuing to consider a non-binding $2-per-share, $200 million takeover proposal by Japan's Sumitomo Dainippon Pharma made in July and would update the market about it in a few weeks to a month.

Cynata is also working to develop stem treatments for osteoarthritis and critical limb ischemia, a reduction of blood flow to the extremities that can lead to amputation and death.