I make no effort to hide the fact that Cynata (ASX : CYP) is one of the ASX-listed biotechnology companies that I despise the most. It is the worst example of a “hollow chocolate bunny” that will only ever deliver on wild speculation from retail punters wowed by the words “stem cells.” If, one day, I am found to be proven wrong about this company I will simply turn my back on science and rationality and go into something like stand-up comedy instead.
I’ll probably suck at that too.
Back in March, I did a strange thing. I both ridiculed and praised Cynata in the same breath. I ridiculed them for proceeding to promote a stem cell technology platform without actually showing any commitment to clinical development of their “game changing” technology. I also (genuinely) praised them for abandoning their plans to pursue a first clinical indication of graft-versus-host-disease (GVHD). What a shitty indication to go after.
Don’t get me wrong, there is considerable evidence that MSCs for GVHD is a sound idea. Most of the existing drugs are also pretty brutal so there is no doubt that we could use new strategies to manage this disease other than immunosuppressants. But the use of MSCs is not without controversy and the biggest issue is trying to understand how to control the exact mechanism of action. Sure Cynata has an imaging project with MRI that could provide some interesting insights, but this is a mere research project (that will be very interesting to see some published results from) and has almost nothing to do with Cynata’s purported actual core technology position.
Moreover, GVHD is not a terribly new focus area for MSCs. Osiris presented fairly robust Phase II data at the 2007 Society of Hematology Meeting for its Prochymal product (yeah, 8 years ago). By the way, this is a product that now has some limited regulatory approval, including with our mates across the Tasman, and was somewhat recently (late 2013) snapped up by Mesoblast (ASX : MSB) because of the the interesting background IP porfolio of the company in the MSC space. I note that Osiris has historically claimed significant intellectual property in MSC expansion, specifically the ability to derive at least 10,000 allogeneic doses from a single donor. Presumably that’s part of the reason why MSB acquired Osiris’ stem cell business, and presumably part of the reason why Silviu doesn’t lose sleep at night about Cynata.
To be clear, there are about 10,000 allogeneic HSC transplants a year in the US (source : CIMBTR) with about 35-50% of recipients going into acute GVHD (inclusive of patients that relapse off steroids). So if Osiris’ claims are valid, then a single manufacturing run should be good for a couple of years or so for the entire US market. Harvesting MSCs isn’t a big deal either.
But now… despite claims back in March that GVHD clinical trials were on the back-burner, we now have Cynata talking again – robustly – about going after GVHD. Like nothing happened. What a completely unfocused, schitzophrenic and stupid company. It honestly can’t decide what its game plan is. It is also rumored to be out chatting to the usual sources of Australian capital because all of the significant financing partners that participated in the IPO (well, reverse merger, to be accurate) are “out” (e.g. Forrest Capital). I can imagine that a lot of investor presentations about a vague and unintelligible “platform technology” may have led management to come to the reasonable conclusion that if one is going to be a successful public biotechnology company, running a clinical trial is possibly not a bad idea.
If you really want to see for yourself that this company is completely clueless, take a look at their “ASX Investors Series” video from the 4th of May. Honestly, I was so fascinated by the amateur scatology in this video that I had to watch it about six times*. Even my 3 year old son got bored – “Daddy, I want to watch a different video, I don’t understand what this man is saying.” (I quote… genuinely).
I have to admit, I didn’t understand what he was saying either.*Ok, I confess. Three of the six re-runs were just watching Lelde Smits. Grrrrrr…. gorgeous!