Cynata Therapeutics (CYP: $0.285) is approaching two major inflection points. The first will be the readout from its Phase II/III osteoarthritis study expected early this month. The second is results from its Phase II GvHD study later this month.
The timing of the osteoarthritis study results are dependent on third parties, primarily the principal investigator of the trial at the University of Sydney. This was a physician-led study that was funded by NHMRC. It has recruited 321 patients. Mesenchymal stem cells (MSCs) are believed to provide benefits to patients with osteoarthritis. However most studies have been small. The Cynata study will be the largest trial conducted with MSCs in this indication. It is a blinded, placebo-controlled study.
The trial in GvHD has recruited 65 patients with newly diagnosed acute GvHD. This is a Phase II study that Cynata has paid for and is actively managing. It is also a placebo-controlled study, with corticosteroids being the standard-of-care control arm. Arguably it has a stronger chance of success given the encouraging Phase Ib data.
In that study in 15 patients (who were steroid resistant), the Cynata therapy achieved a clearly better response than historical data from best available therapy at 28 days (67% versus 39%) and with this gap widening at day 50-60 (73% versus 22%), showing a more durable effect. It also showed a survival benefit.
The primary endpoint in this study will be response rate at 28 days, however durability of effect (at day 60 and 100) will be looked at as secondary endpoints. There were 37 sites involved in this study which took 21 months to recruit. This was reasonably quick given the disease.
This week Cynata reached an agreement with the EMA on a Pediatric Investigation Plan in GvHD, which is a requirement before a Phase III study begins. Pending positive results in the Phase II study, Cynata plans to initiate a single Phase III study in adult patients with newly diagnosed acute GvHD. This would then be followed by a Phase II/III study in around 72 children. Presumably it can file for approval before the pediatric study commences.
Mesoblast Sales Progress with Ryoncil MSC in aGvHD
Cynata's competitor Mesoblast received approved from the FDA for its MSC therapy, Ryoncil, for the treatment of steroid resistant pediatric patients with acute GvHD. In the March quarter, the company generated gross sales of US$35.5 million for the quarter and US$30.3 million in net revenue.
Financials
At the end of March Cynata held cash of just $1.6 million which was topped up with a placement in April for $1.5 million at $0.25 per share. The company's low cash balance is a risk for the company. However positive results, particularly in GvHD, should place the company in a considerably better position to raise funds.
Cynata is capitalized at $69 million.
Bioshares recommendation: Speculative Buy Class B
