Proactive Investors: Regeneus enters 2017 backed by transformational Japan deal

Friday, 20 January 2017

View the original story at Proactive Investors.

Regeneus (ASX:RGS) has a busy 2017 to come, spearheaded by its recent entry into the Japanese market for its Progenza product.

The company entered into a strategic collaboration and licensing agreement for the manufacture, clinical development and commercialisation of Progenza in Japan.

A 50/50 joint venture will be formed and Regeneus will receive $16.5 million in financial benefits as well as be entitled to its share of licence fees, milestone payments and royalties from any sub licensing deals for the development and commercialisation of Progenza for osteoarthritis and all other clinical indications in Japan.

Progenza is a patented off-the-shelf stem cell technology developed for the treatment of knee osteoarthritis and other inflammatory conditions.

Regeneus is an emerging leader in cell based medicines for both humans and animals.

It is a clinical-stage regenerative medicine company with a focus on osteoarthritis and other musculoskeletal disorders, oncology (cancer) and dermatology diseases.

Regeneus’ Japanese partner

Regeneus has entered the agreement with Asahi Glass Co (TYO:5201), a world-leading manufacturer of glass, chemicals, high-tech materials and biopharmaceuticals.

Asahi Glass, Japan’s leading biopharmaceutical contract manufacturer, headquartered in Tokyo has a clear vision and strategic priority to grow its life science business, with a commitment to invest US$13 billion into growing their strategic businesses within the next 5 years.

This strategic collaboration is an endorsement of the company’s Progenza technology.

Terms of agreement

As per the agreement, Regeneus is to receive US$16.5 million comprised of $5.5 million upfront and US$11 million in specified milestone payments.

This will see Regeneus and Asahi Glass establish a 50/50 joint venture for exclusive clinical development and commercialisation of Progenza for osteoarthritis and all inflammatory conditions for the Japanese market.

With the agreement including the clinical development and commercialisation of Progena for osteoarthritis and all other clinical indications, the door is open to a mass of opportunities for partnering in Japan.

Regeneus will be entitled, through its 50% interest in the joint venture, to its share of upfront licence fees, milestone payments and royalties from any sub licensing.

STEP trial on track

The safety, tolerability and efficacy of Progenza (STEP) trial of Progenza for knee osteoarthritis is on track to report results in Q4 FY17.

These results will be an important addition for clinical partnering discussions in Japan.

Japanese market

The Japanese market is currently the most dynamic market in the world for regenerative medicine.

This is evidenced by the unprecedented number of licensing deals, manufacturer tie­ups and corporation deals involving Japanese pharmaceutical companies that have taken place over the last few years with at least 10 such deals taking place in 2016 alone.

The market in Japan for regenerative medicines is projected to grow to US$12.7billion by 2030 according to the Japanese government.