Good interview here from teh MD of CJ Partners, on regenerative...

Good interview here from teh MD of CJ Partners, on regenerative medicine in Japan, the implications of the 21C Cures act for regenerative medicine in the US, and a discussion of the RGS/AGS deal, the latter of which is pasted below. It reinforces in my mind that the RGS/AGC deal has not been fully digested yet by ASX investors.

A link to the entire article is below - a good read.

TLSR: Would you talk about what is actually happening in Japan—mergers, licensing deals, contract manufacturing tie-ups, etc.?
CN: We can classify the types of deals in Japan into three major categories. The first category is cellular manufacturing deals or contract manufacturing organization (CMO) deals. These are categorized by some of the major players in cellular manufacturing teaming up with some major Japanese corporate conglomerates that are looking to pivot into pharmaceutical manufacturing.
Examples are the Lonza Group AG (LONN:SIX; LO3:FSE; LZAGF:OTCPK)–Nikon Corp. (7731:TYO) deal that everyone’s talking about that was signed in May 2015. Also, in March of last year, PCT, a subsidiary of Caladrius Biosciences Inc. (CLBS:NASDAQ) signed a deal with Hitachi Chemical Co. Ltd. (4217:TYO).
Those are both instances where a cellular contract manufacturing organization outside of Japan is licensing its know-how to a large company in Japan that has no experience in contract manufacturing, like Nikon and Hitachi.
Very recently, a third behemoth showed up on the scene for CMOs, and that is a deal between an Australian biotech called Regeneus Ltd. (RGS:ASX) and a very large Japanese corporate conglomerate called Asahi Glass Co. Ltd. (5201:TYO) (AGC). Now, the name doesn’t really spell it out for you, but AGC is Japan’s largest biologics CMO. AGC is basically saying it would like to expand its CMO offerings from a simple biologics manufacturing capacity to regenerative medicine.
AGC, over just the last six months, has acquired a German biologic CMO called Biomeva GmbH and a very large Danish CMO that does monoclonal antibodies called CMC Biologics A/S. It followed that up very quickly with this deal with Regeneus.
The Regeneus deal, compared to the CMC one, is small, but for a company of Asahi Glass’ caliber to come out and say, “We’re going to enter into the regenerative medicine space now,” is highly indicative of the potential seen by the firm in the space. Also it highlights that when one looks to Japan, the usual suspects that are the pharmaceutical companies are not the only places to look; that’s one thing that Regeneus was able to do.
TLSR: Could you tell us about the Regeneus deal?
CN: Regeneus is developing a number of products, and one of its lead product platforms is called Progenza. It’s an allogeneic mesenchymal stem cell product platform that has a patented differentiating factor from its competitors by adding back in the secretions, the anti-inflammatory cytokine and chemokine and growth factors that the cells secrete just by being wherever they happen to be.
By adding these back into the Progenza cells and then freezing them down, the secretions help the cell functionality. A Phase 1 clinical trial is currently being conducted. The hypothesis is that the secretions help the product be even more efficacious. Of course, it also helps that Regeneus has a patented process of combining cell secretions with their cells.
Rights to any product in any jurisdiction are divided into three subcategories—the rights to manufacture the product, the rights to develop the product and the rights to sell the product. Generally companies will license all three out in to a single company, or a company will retain the manufacturing rights and license out the development and marketing rights.
Regeneus licensed to AGC the right to manufacture Progenza for Japan; for that, AGC is paying US$5.5M up front and an additional US$11M in specified milestones, one or two of which will likely come within 12 to 18 months.
Another part of this deal that Regeneus and Asahi Glass signed was the formation of a subsidiary, 50% owned by each of the companies. This company will allow both involved companies to have a say in who the marketing partner for Progenza will be in Japan.
Asahi Glass and Regeneus will now cooperate to find a pharmaceutical partner in Japan to sublicense out the marketing and development rights for Progenza in Japan. Regeneus now has a very large Japanese company that is well known by Japanese pharmaceutical companies because they outsource to AGC on a regular basis. So Japanese pharma companies will be able to deal with Regeneus alongside a face that they recognize. This should help immensely in further negotiations with potential marketing partners.
This is a nicely designed deal. Regeneus gets the upfront payments and the milestone payments from AGC, but it also gets a portion of subsequent milestone payments and upfront payments from any pharmaceutical company that it teams up with for the commercialization rights. And the pharmaceutical company gets the added benefit and reassurance that its product is going to be manufactured by a Japanese company that the PMDA, the regulator of Japan, is very used to. So keep an eye out for Regeneus over the next 12 to 18 months for assigning a marketing partner.
I should add that last year AGC announced its midterm growth strategy called Vision 2025. Within that, AGC designated the life sciences sector as a strategic growth business. It said that within the next five years it has a budget of 1.3 trillion Japanese yen (1.3T JPY) that it has set aside to grow these strategic businesses; that figure is divided into 1T JPY for investments and R&D and 300B JPY for mergers and acquisitions (M&A). So for the M&A portion, it has already done the CMC Biologics and the Biomeva acquisitions. The Regeneus play was part of that 1T for investments and R&D.
I think it’s good for the industry that Japan now has AGC, Hitachi and Nikon, which are three corporate behemoths in Japan, all saying, “We’re going to get involved in this industry.” Each one offers a slightly different value proposition. Hitachi and Nikon have Lonza and PCT, which are experienced in cellular therapies, backing them up, and that’s how they are going to ramp up the learning curve. AGC knows how to do contract manufacturing with biologics. It needs to modify this knowhow to cellular manufacturing.

http://jutiagroup.com/20170201-companies-flocking-to-japan-for-biotech-deals/