TOKYO – Japan's Fujifilm Corp. is set to invest $3 million in the Australian regenerative medicine venture Cynata Therapeutics Ltd.

The agreement gives Fujifilm the option to acquire the development, manufacturing and sales licensing rights as well as the contract manufacturing rights to a new therapy Cynata is developing to treat patients with graft-vs.-host disease (GvHD). In exchange, the Australian company will gain access to allogeneic iPS cells supplied by Cellular Dynamics International (CDI), a Fujifilm subsidiary.

It is the third investment by Fujifilm in a company working to bring regenerative medicine to the market.

"In regenerative medicine M&A, Fujifilm invested in Japan Tissue Engineering Co. Ltd. in 2010 and made it a consolidated subsidiary in 2014," said Kana Matsumoto, a spokesperson for Fujifilm. "Fujifilm acquired 100 percent of Cellular Dynamics International Inc. (USA) in 2015."

Cynata, which has close ties with CDI, has been in discussions with Fujifilm about the regenerative medicine field for more than a year.

"We have had an ongoing, nondeal-specific dialogue with Fujifilm for over 18 months," Ross Macdonald, CEO of Cynata, told BioWorld Today. "Cynata's business strategy has a clear focus on partnering; as such, and given Fujifilm had made an obvious and spirited commitment to stem cells and regenerative medicine, we were keen to maintain an open channel of communication."

Macdonald said that the deal will allow Cynata access to major commercial markets, if its therapy passes trials.

"Through the relationship with Fujifilm, Cynata gains a dynamic strategic partner with a leadership position in the regenerative medicine sector," he said. "Additionally, we gain direct access to the Japanese market, along with other major commercial markets worldwide."

Cynata will begin trials of its therapy for GvHD in the U.K. before the end of this year. Matsumoto said that despite the political situation in Europe, with Britain having voted to leave the EU, there are few worries about the trials going ahead as planned.

"There is no risk on the matter of starting phase I clinical trials in the U.K.," said Matsumoto. "Fujifilm highly values the fact that Cynata got accepted by the Medicines and Healthcare Products Regulatory Agency of the U.K., which has a top level drug approval system in the world."

Further trials are likely to take place in Japan, with the aim of getting a product to market before 2020, according to Macdonald.

"Should Fujifilm choose to proceed with this product, we expect to commence a clinical program in Japan by 2017 and potentially market launch in that country under new regulatory guidelines in 2019," he said.

BREXIT IMPLICATIONS REMAIN UNCLEAR

Reforms in Japan mean that regenerative medicines will be fast-tracked to market and then tested during an initial period to ensure safety, rather than having to go through a longer period of clinical trials. The aim of the government, through the law, is to make Japan a market leader in this area over the next decade.

According to Macdonald, the outlook for regenerative medicine in Europe has become murky in light of the Brexit vote.

"We do not see the impending Brexit having any impact on our current phase I plans," he said. "The longer term implications for the pathway to U.K. and EU approval of medicines generally remain very unclear."

Beyond gaining access to markets, clients and technology, Cynata also welcomed the deal with Fujifilm for the capital it brings to the firm.

"The financial elements of the deal will substantially bolster Cynata's balance sheet," said Macdonald. "Our shareholders gain confidence in their investment through Fujifilm's endorsement of our proprietary stem cell technologies."

Founded in 2013, Cynata has paid-in capital of A$28.8 million (US$21.58 million). The Victoria-based company has seen good results in preclinical trials and is looking forward to moving into the U.K. trials.

Fujifilm, meanwhile, has been a camera company for most of its life, but diversified at the turn of the century as the digital revolution took a bite out of its mainstay business. Earlier this year, it announced it had managed to create a compound, called Cellnest, which worked as a scaffold to help rats regenerate cells in their knees, though the technology has no practical application in humans yet.

"If Cynata develops regenerative medicine which requires cellular adhesiveness and so on, there is possibility for Cynata to use Cellnest," said Matsumoto.

Fujifilm is also open to further investments in regenerative medicine.

"There is a possibility of investments in the regenerative medicine field in the future, if we can expect good synergies," she said.

Macdonald sees the full sale of the company coming together sooner rather than later.

"I expect the company will have been acquired well within 10 years," he said.