Cynata Therapeutics Receives Orphan Drug Designation from FDA

While all US Food and Drug Administration (FDA) regulatory news is important, the orphan drug designation incentivizes companies to develop treatments for the rare disease market.

On Wednesday (March 28), Cynata Therapeutics (ASX:CYP) received this designation for its CYP-001 product to treat acute graft versus host disease (GvHD). The incentives include: market exclusivity, which may potentially last seven years after the FDA market is approved, half of the qualified research costs for the product may be claimed as tax credits, and waived FDA fees.

With these catalysts, the company expects a cost-effective commercialisation in the US.

The FDA classifies the orphan drug designation to drugs and biologics intended for safe and effective treatment, diagnosing or preventing rare diseases and disorders which affect fewer than 200,000 people in the US or with the exception that the company is not expected to regain the developing and marketing costs of the drug.

“We are delighted that the FDA has seen fit to grant Orphan Drug Designation to CYP-001, in recognition of the potential of this product to address the substantial unmet need associated with GvHD,” Kilian Kelly, Cynata’s vice president of production development said in the release. “This follows on from our successful pre-IND meeting with the FDA last year, and we look forward to building our productive relationship with the FDA over the coming years.”

GvHD can occur after a bone marrow transplant or similar treatment when the donor’s immune cells attack the recipient of the transplant. Currently the only other approved treatment for the disease is corticosteroid therapy which is only effective for about 50 percent of the patients. The result from this treatment often results in the patients having steroid-resistant GvHD, resulting in a 90 percent mortality rate.

In Cynata’s Phase 1 trial of CYP-001, the survival rate was 87.5 percent at 100 days.

The company is an Australian clinical-stage stem cell and regenerative medicine company also working on Cymerus, a therapeutics stem cell platform technology. The technology addressing a shortage of mesenchymal stem cells (MSCs) for therapeutic use.

Investor takeaway

Following Wednesday’s announcement, shares of Cynata increased 10.37 percent to AU$1.49 as of 2 p.m. EST, a.m. then dropped slightly to AU$1.44 at market close.

An analyst report by Shaw and Partners on March 14, gave the company a “buy” rating with a high risk—which was lowered from the previous report. The recommendation was based on the company producing, “excellent first cohort results during 1H18 which we believe has de risked CYP and generated increased partnering interest.”

The report gave the company’s share price a AU$1.95 value when the share price was at AU$1.19 and lowered the risk factor.

Overall, Cynata Therapeutics is a company investors may be increasingly more interested in as future clinical trials results are announced and the company meets its milestones.

Don’t forget to follow us @INN_LifeScience for real-time news updates!

Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.