Why 2019 Could Be a Breakout Year for Cynata Therapeutics

Cynata Therapeutics Limited [ASX:CYP] ended 2018 on a strong note, posting a gain of 30% in the last two weeks of the year. The company’s stock value has increased by more than 124% over the past 12 months.

News out of the company over the past few months suggests that CYP could be set to continue this trend into 2019.

CYP is an Australian stem cell and regenerative medicine company that is developing a therapeutic stem cell platform technology, Cymerus, using discoveries made at the University of Wisconsin-Madison (UWM), a global leader in stem cell research.

The company’s Cymerus platform stem cell technology is at the forefront of new treatments for devastating diseases such as osteoarthritis, Crohn’s disease and heart disease.

Currently, there is a shortcoming in the existing methods of production of mesenchymal stems cell (MSCs) for therapeutic use. That shortcoming is the ability to manufacture the cells at a commercial scale. The current technology being developed by CYP has the potential to fill this gap in the market.

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Intellectual Property and Patents

In an announcement released this morning, CYP notified investors a patent application covering its proprietary Cymerus had been accepted by IP Australia (the department responsible for intellectual property rights).

This comes just months after having patents accepted by both the European Patent Office and the United States Patent and Trademark Office covering the same technology.

Dr. Ross Macdonald, Cynata’s CEO, said the patent reinforces the company’s proprietary method of manufacturing MSCs, enabling economic production of therapeutic MSCs at scale with consistent quality.

Advancing Cymerus stem cell treatment

In the final weeks of 2018 CYP announced it had completed phase one of its flagship drug CYP-001 for the treatment of steroid-resistant acute graft-versus-host disease (GvHD). The company stating that it had ‘met all clinical endpoints’.

According to the company, The Phase 1 trial of CYP-001 represents the first time a clinical trial using an induced pluripotent stem cell (iPSC)-derived therapy has been completed.

The standout highlights from the preliminary results include an overall response rate of 87% with 13 out of 15 patients showing an improvement compared to their condition before the trial. The complete response rate was 53% while the overall survival is ‘at least 87%’, according to Cynata.

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Dr. Adrian Bloor, the UK Chief Investigator for the trial said, ‘We are very pleased with the results of this important trial. Importantly, no safety concerns have been identified, and the Overall Response and Complete Response rates are very encouraging. We look forward to further evaluating CYP-001 in later phase clinical trials in the near future’.

Steroid-resistant GvHD can be fatal and is a disease where current therapy is only effective in about 50% of patients. Prognosis of patients who develop steroid-resistant GvHD is poor, with mortality rates exceeding 90%.

What are Cynata’s 2019 prospects?

With the success of phase one of the drug CYP-001, phase two is expected to commence in the second half of 2019. CYP was approved late last year by the Australian National Health and Medical Research Council (NHMRC) for a grant to fund the second phase of the Cymerus trails.

The second trial will target mesenchymal stem cells (MSCs) as a treatment for osteoarthritis. Cynata owns the full commercial rights to use Cymerus MSCs in osteoarthritis, representing a market opportunity forecast to be worth US$11.6 billion globally by 2025 if the trial is successful.

With the global stem cell market expected to grow at a rate of 25.5% from 2015 to 2022, expecting to reach a market value of US$297 billion, CYP stands to carve out a significant chuck of this market.

As funding increases from governments and private sector investors, along with a rising global awareness of stem cell therapies and research, there may be greater attention given to companies in this industry.

A surge in government funded therapeutic research activities has immensely propelled the global stem cells market. Although the high cost of stem cell treatment and stringent government regulations against the harvesting of stem cells continue to retrain the global stem cell market, CYP’s Cymerus technology provides the company with a unique advantage.

CYP’s proprietary Cymerus technology allows nearly unlimited production of stem cells from a single donor, ensuring there is batch-to-batch uniformity. This gives Cynata a cost-saving advantage — the ability to achieve economic manufacture at commercial scale.

While this technology has now only reached an intermediate stage of development, preliminary results show promising signs for the value of CYP’s stock. And with a rapidly growing stem cell market, CYP could continue to see the great gains it made last year. Of course, nothing is for certain.

 

Regards,

Ryan Clarkson-Ledward,

For Money Morning

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Ryan Clarkson-Ledward is one of Money Morning’s junior analysts. Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects. Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities. You can find Ryan’s contributing research, developments, and supporting information across several e-letters, including:


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