"29 January2019" "Towards the end of the December quarter the...

"29 January2019"

"Towards the end of the December quarter the Companyannounced that it had completed the CSR describing full details of the resultsfrom the Phase 1 clinical trial of CYP-001 for the treatment of steroid-resistantacute graft versus host disease (GvHD). Significantly, a copy of theCSR has now been provided to Fujifilm in accordance with the terms of thelicence option between Cynata and Fujifilm. This triggered a 90 day period for Fujifilm to exercise the licenceoption. A decision to do so would see Fujifilm pay an initial US$3m upfrontlicence fee to Cynata for the exclusive worldwide licence for the product forGvHD and a potential further ~A$60m in milestone payments, plus double -digitroyalties on product sales. Fujifilm would also take onall development and commercialisation costs associated withprogressing CYP-001 to market for GvHD. " (1)


"It remains our view that theactions of Fujifilm indicate an intention to exercise the licence option forGvHD. Cynata has commenced planning fora Phase 2 trial in GvHD with Fujifilm, including conducting a joint meetingwith Japanese regulator (PMDA) and joint media briefings." (2)


"Outlook"

"Theclinically and commercially significant outcomes generated by our Phase 1 trialin GvHD provide clear validation of Cynata’s MSCs and the Cymerus platform. Webelieve this will support the continued evaluation of Cynata’s MSCs in a Phase2 trial in GvHD inpartnership with Fujifilm (assuming exercise of the licence option)".(3)

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(1) Would be good to know what "all development and commercialisation costs associated with progressing CYP-001 to market for GvHD" would actually be, in some detail. Even if just to know that CYP actually knows what is involved. And so could game out alternatives.

(2) "Joint meetings" and "joint media briefings" - perhaps that wasn't so smart in hindsight? Can CYP "commence planning" or just meet with "Japanese regulator (PMDA)" now on their own?

(3) Okay - so now, perhaps, stop "assuming exercise of the licence option" and perhaps stop giving away free publicity and support to a potential competitor (if someone else, someone not Fujifilm might want a global GvHD license or a Japanese licence) if they can get a copy of the Clinical Studies Report) that hasn't exercised.

@sigmadelta

You say you "would" (not "are" or "will be") agitating to replace management. I am not sure replacement management would be any better given these guys have share based incentives already and new guys, being different guys, don't. (We don't know what partially completed deals these guys have made - if any - it is all a matter of trust, or not, as the case may be). I think as a practical matter these guys are the guys we are stuck with. So better to prompt them to lift their game rather than rattle their cages and make them have to defend their jobs when their minds would be better directed towards general shareholder wealth creation.