fnn interview transcripts fri 25th

Dr Stewart Washer: Thanks Joel.

Joel Spreadborough: For those not familiar with EcoQuest, can you give us a brief rundown of the Company’s history and its focus?

Dr Stewart Washer: Yeah sure. Look EcoQuest was a biodegradable hygiene company before I came along and before the current Board and management came along. And really for various reasons, didn’t do so well as that. So we came along and it was a nice clean shell, and are now putting a stem cell company into it. And I’m a scientist by training and have run many biotech and healthcare companies. And so myself and Ross Macdonald, who’s the CEO, came along and joined and we’re acquiring the stem cell assets now.

Joel Spreadborough: Now you’ve recently exercised options to acquire 100 per cent of stem cell company, Cynata. Tell us what was the strategy that drove this acquisition?

Dr Stewart Washer: Well look, I’ve been looking at regenerative medicine for some time. I’ve got two loves in the world at the moment, digital health is one and that’s really digitising medicine. And you know, so that the power of the medical community can be in the patient’s hands directly, through their Smart phones, through their medical devices which interface with their Smart phones. So I’m a company Chairman of the Board of iSonea (ASX:ISN), which is a digital health company.

And the other thing I love is regenerative medicine and I’ve been looking at this for some time, and stem cells are a phenomenal area. I have been aware of Cynata for some time, just over a year and been watching their technology with interest. So when we had the opportunity to acquire into a publicly listed company and fund it going forward, I jumped at the opportunity.

Joel Spreadborough: For those who’ve not heard of Cynata, tell us about their proprietary stem cell technology Cymerus and its commercial potential?

Dr Stewart Washer: Yeah well what Cymerus is, it’s an amazing – stem cells are stem cells at the end of the day. Most of the Mesenchymal stem cells are the common type and they treat a range of diseases. And there’re a couple of approved ones on the market now and a massive pipeline coming through. But what we’ve got in Cymerus is a way of making stem cells on a very scalable basis. So instead of taking one donor and treating a few hundred or a thousand people, we can take one donor and treat the world’s population for any disease. So it’s a very scalable, reproducible manufacturing technology we’ve got in the Cymerus stem cell line.

Joel Spreadborough: Stewart it sounds like a remarkable venture.

Dr Stewart Washer: Yes and I mean the nice thing is where it’s come from is the best thing. It’s come from the University of Wisconsin in the US and that is the home of stem cells. So that’s where they found and isolated the first embryonic stem cell, and also the first place that made adult stem cells. So on basic leverage on both of those technologies, we’ve licensed this technology into Cynata and which is now owned by EcoQuest of course. Then we’ll make a name change to Cynata to save everyone’s confusion as well, so it will be Cynata Limited going forward.

Joel Spreadborough: So what are some of the changes EcoQuest will propose to make with its new holding and why?

Dr Stewart Washer: So really, what we need to do with any of these things is test the technology in humans. So we’ve got very good pre-clinical data, so that’s animal model data showing our stem cells, the Cymerus stem cells work as well as anyone else’s stem cells. But with those benefits I spoke about in terms of we can manufacture for the world’s population, you know, of any disease. So what we need to do now is pick a disease in humans and take our stem cells in, and treat that disease in a clinical trial. That’s exactly what we’re raising this current round of funding for and what we’ll be doing over the next year or so.

Joel Spreadborough: How does EcoQuest plan to secure for itself a strong commercial position, in what is a very high growth sector of regenerative stem cell technology?

Dr Stewart Washer: So the nice thing is stem cells now – there’re two modes of action for stem cells. One is they cause tissue repair, so chronic heart disease. When the heart has got diseased areas that are dying, stem cells seem to come in; they release some goodies and regenerate the heart tissue. So that’s one mode of action which we’ve been aware of for some time and a lot of the treatments coming through in stem cells, are based around that mode of action of repair.

The other incredible thing is they immunomodulate. So they actually take the immune system when it’s gone a bit crazy, like Crohn’s disease, asthma and osteoarthritis and down modulate the immune system, so that it stops causing those autoimmune type diseases. And that’s a very exciting area, you know, that stem cells are implemented in now and people are developing through.
So we’ll be developing in one or both of these areas, proving out platform, so we’ll have our own Cymerus cell therapies in certain diseases.
But we’ll have the very valuable platform for licensing to the big pharmaceutical companies, who want to get into stem cells, where now they can treat it like a drug. They don’t have to treat it like a cottage industry, where they have to keep going back to donors and revalidating each donor. They can just take one donor, grow as many stem cells as they want from that single source and treat the disease of interest.

Joel Spreadborough: You’ve outlined the possibility of a capital raising to assist with the acquisition costs, as well as future activities. What would that comprise?

Dr Stewart Washer: So we’ve got, at the moment we’re looking at $5 million capital raising that’s fully underwritten and placed. So that’s, you know, it’s done before we begin which is always good. The interest in this area from the professional investor community has been phenomenal. And of course, healthcare and biotech is becoming a very hot sector again and we’ve got a position of one for overs. So we can go up to $6 million in that raising, but that extra million’s already been spoken for as well.

So we’re in a nice position to raise that $6 million and that will really get us through to that human clinical trial, which is decisive trial obviously, to prove that disease and that stem cell Cymerus treating that. But also unlock at value the platform, you know, for those big licensing deals with pharma.

Joel Spreadborough: Finally Stewart, tell us about some of EcoQuest’s other key potential commercial opportunities for Fiscal 2014?

Dr Stewart Washer: Well I think the nice thing is if you look at we’re doing right now a pre-money of around $20 million. Look we’re deliberately doing it low to leave a lot of upside on the table, I think we’ll get traction pretty quickly and you’ll see us start to come up near the other stem cell companies. Stem cell companies that are in the clinic or even pre-clinical, are in the hundreds of millions; of course Mesoblast (ASX:MSB) is $1.8 billion market cap. So we’ve got some good upside in terms of where we’re going.
I mean we’re not there to compete or replace other stem cell companies; we want them to succeed in their diseases. We’ve got a manufacturing technology which is very valuable with the Cymerus technology, which could compliment very well.

Joel Spreadborough: Dr Stewart Washer thanks for the update on EcoQuest.

Dr Stewart Washer: Thanks very much.

Ends