Appendix 4C - Quarterly
- MOU agreement signed with Japanese multinational manufacturer Kyocera Corporation for exclusive negotiation rights for Progenza in Japan
- Milestone payment of A$1.6M received from Kyocera
- New key patent for Progenza to be granted by U.S. Patent and Trademark Office
- $4M loan facility from Directors to support Licence and commercialisation negotiations for Progenza
- Cash balance of $1.4M as at 31 March 2020
During the quarter, the Company made significant progress on its commercialisation strategy for its lead stem cell platform technology Progenza for Osteoarthritis (Progenza OA) in Japan by signing a non-binding Memorandum of Understanding (MOU) with Kyocera Corporation. As part of the MOU, Regeneus received JPY100M (A$1.6M) upfront milestone payment from Kyocera.
Kyocera is a diversified multinational manufacturer; their life sciences business operates as one of the major producers of medical and dental products in Japan, including artificial joints for the knees and hips.
Under the MOU, Kyocera will conduct due diligence on Progenza OA. Upon completion of this, Regeneus will receive formal notification from Kyocera and Kyocera will have exclusive negotiation rights for Progenza OA in Japan until the end of July.
During the quarter, the Company also strengthened its intellectual property (IP) portfolio, with the U.S. Patent and Trademark Office (USPTO) issuing a notice of allowance for a new key patent for Progenza in the U.S.
The new patent to be granted covers the treatment of inflammatory conditions with the combination of stem cells and secretions. This includes inflammatory conditions caused by arthritis, heart disease, autoimmune conditions, respiratory diseases, asthma, Crohn's disease and other gastrointestinal diseases.
In February, the Board of Directors put in place a $4 million loan facility to support the Company's funding runway to commercial licensing negotiations, CEO and Executive Director Leo Lee and Paddington St Finance Pty Ltd, a company associated with Independent Chairman Barry Sechos, have both provided facilities of $2 million.
The Company believes these funding arrangements provided by related parties on 'arm's length terms' demonstrate the Directors' commitment to Regeneus and confidence in the management team's ability to conclude commercial licensing arrangements for its lead platform technology in Japan.
Regeneus' cash balance as of 31 March was $1.4 million. Receipts for the quarter totalled $1.6 million, representing the milestone payment from Kyocera. Net operating cash outflows for the quarter was $1.1 million, mainly related to operational costs, IP filing and R&D-related expenditure and expenditure associated with securing the Kyocera arrangements.
Regeneus continued its cost containment initiatives over the quarter. It is anticipated that the cash at end of March of $1.4 million and the undrawn facilities of $2.9 million will provide adequate cash to fund operations until Kyocera arrangements are finalised.
Regeneus CEO and Executive Director Leo Lee said the Company has made positive progress towards its revised strategic direction this quarter.
"The MOU with Kyocera Corporation was a critical milestone in our commercialisation pathway for Progenza OA in Japan. We look forward to the completion of Kyocera's due diligence on Progenza OA and updating the market on this front," said Mr Lee.
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About Regeneus Ltd
Regeneus Ltd (ASX:RGS) is a Sydney-based clinical-stage regenerative medicine company using stem cell technologies to develop a portfolio of novel cell-based therapies to address significant unmet medical needs in the human health markets with a focus on osteoarthritis and other musculoskeletal disorders, neuropathic pain and dermatology.