Regeneus entered into a strategic collaboration and licensing agreement with AGC of Japan in December 2016, granting AGC exclusive rights to manufacture its Progenza allogeneic mesenchymal stem cell (MSC) product in Japan. Regeneus and AGC have established a 50:50 JV, Regeneus Japan, which holds the rights to develop and commercialise Progenza in Japan. Regeneus received US$5.5m upfront and a US$1m milestone in June 2017 following the successful completion of the STEP Phase I study of Progenza in patients with knee osteoarthritis (OA). Regeneus could earn two further payments of US$5m each if it achieves certain development milestones.
The Regeneus Japan JV is seeking clinical development partners to progress the development of Progenza for OA and other indications in Japan. The positive safety data, early indications of efficacy and recently granted Japanese patent should all aid the JV as it negotiates with potential partners to progress the clinical development of Progenza for OA and other indications in Japan. Japan is a most attractive market for regenerative medicines because of laws that took effect in November 2014, which allow for expedited conditional approval of regenerative medicine products on the basis of safety and early evidence that is predictive of efficacy. Regeneus has guided that it expects the JV to grant a licence for the clinical development of Progenza in Japan by the end of FY18, which would trigger the first US$5m milestone payment; we model the second milestone being achieved in FY21
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