Cynata tries to calm panicking shareholders after the Fujifilm deal got delayed
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This week was meant to be a big week for Cynata Therapeutics (ASX: CYP) shareholders.
This was because it was the deadline for investor & strategic partner Fujifilm to exercise a licence option to their lead stem cell product – CYP-001. CYP-001 aims to prevent and treat graft-versus-host disease.
In January 2017, Fujifilm bought a 8 million shares in Cynata, then 10 per cent of the company and worth $3.97 million.
It agreed that once CYP-001 phase 1 clinical trial was done, it would have a 90-day timeframe to exercise an option to an exclusive, worldwide license to sell CYP-001.
This would give Cynata a US$3 million upfront licensing fee and up to $60 million in milestone payments as well as royalties.
On Tuesday, with the deadline looming, the company was put into a trading halt. Shareholders anticipated this was the announcement they were waiting for.
But this morning they were told they would have to wait another six months. The deadline is now 5pm (AEST) on Thursday, September 19.
Cynata CEO Ross Macdonald said:
“The purpose of this extension is to enable the parties to seek to accomodate certain requests made by Fujifilm in relation to structural aspects of the GvHD license agreement.
“We note that Fujifilm has not raised any material issues in respect of the financial, clinical or technical aspects of CYP-001 or Cynata’s core Cymerus technology generally.”
The second the market opened, Cynata fell by over 40 per cent. Since 12pm, it has rebounded slightly but as of 12.30pm is still down 32.5 per cent.
Fujifilm’s own stake (now 8% after dilutions but with the same number of shares) fell from over $14 million to as low as $8.2 million but is now just under $10 million.
Two hours into trading, the company put out another release, attempting to calm shareholders.
While it confirmed, “there can be no guarantee that Fujiilm Corporation will exercise the license option”, it also noted it was “not negotiating any changes to those material terms and no changes have been agreed”.
The stock is still up by 136% since Fujifilm’s investment (at 50 cents) but has wiped out almost all of this year’s gains even with the slight bounce in the last hour.