According to Edison Investment Research analyst Dennis Hulme, Regeneus Ltd. (RGS:ASX) "is in advanced discussions with a large Japanese company regarding licensing Progenza for the Japanese market, and anticipates converting these discussions into a binding arrangement by the end of the current quarter."
In his Sept. 14 research report, Hulme noted that "signing up a manufacturing and commercial partner for Progenza in Japan would provide significant validation of the commercial value of the company's technology and represents near-term potential upside."
In addition, "Upfront fees and milestone payments from the potential deal could offer a source of nondilutive funding for the company's ongoing work on new product development," Hulme stated. "In addition, we would expect a partner to either fully or partly cover the costs of the planned Phase 2 trial of Progenza in patients with osteoarthritis of the knee."
Progenza, an allogeneic (off-the-shelf) stem cell therapy targeting osteoarthritis and other musculoskeletal disorders, is in Phase 1 for treatment of knee osteoarthritis, according to the company, which is preparing for a Phase 2 clinical trial of Progenza in Japan.
"A number of large Japanese companies are seeking access to technology that will allow them entry into the regenerative medicine field," Hulme wrote. "These companies are seeking to take advantage of the favorable regulatory environment in Japan, which includes a fast-track approval pathway specifically designed for regenerative medicine products like Progenza."
Twenty patients have been dosed in the Phase 1 trial, according to Hulme. "We expect 12-month efficacy data from the second, high-dose cohort to be available in the June quarter of 2017."
Hulme also commented on progress in the company's other development programs in the report. Regeneus is expected to finish recruitment of patients for a Phase 1 trial for its human cancer vaccine in December 2016, the analyst wrote. In addition, "Regeneus has developed products for topical application for the treatment of inflammatory skin conditions such as acne and wound healing."
On the veterinary medicine side of its business, the company has a partnership "with an unnamed top-five veterinary pharma company to develop CryoShot Canine," according to the analyst. Results from a "pre-pivotal trial are expected in 2017."
"Regeneus is also developing a therapeutic cancer vaccine for use in dogs, known as Kvax," Hulme wrote. "The company is conducting a marketing study of Kvax in conjunction with Dr. Phil Bergman of VCA, the largest veterinary services group in the U.S., to generate real-world clinical study results in osteosarcoma. Results in this study are expected to be announced in Q4/16."
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Edison Research, Regeneus Ltd. Sept. 14, 2016
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