Regeneus (ASX:RGS), CEO, John Martin talks about its stem cell and immunotherapy technologies with focus on osteoarthritis, cancer and inflammatory skin conditions and wound healing.
Jessica Amir: Hi I’m Jessica Amir for the Finance News Network. Joining me now from Regeneus Limited (ASX:RGS) is CEO, John Martin. John, welcome to the Finance News Network.
John Martin: Thanks very much for having me Jess.
Jessica Amir: Thanks for coming. First off, can you give us an introduction to Regeneus?
John Martin: Regeneus is a regenerative medicine company; we’re based here in Sydney. We’re listed on the Australian Stock Exchange; we started in about 2008. So next year we’ll be up to our 10th anniversary, which is often a tipping point for most emerging technology companies, so we’re excited by that. In terms of what the business does, we’re in the business of developing, we’re an R&D shop. We develop innovative regenerative medicines for a range of inflammatory conditions, for both the human and animal health markets.
Our technology is largely stem cell based and we also have an immuno-oncology platform. So our stem cell technology uses adipose or fat derived Mesenchymal stem cells, and we grow those. And we use those for various therapeutic applications. We also have a technology, which uses the secretions from Mesenchymal stem cells, in a range of other topical and other delivery technologies as well.
Jessica Amir: Now to you FY17 results. What were the highlights?
John Martin: The highlights were that we were profitable; we had a swing of about $6 million from last year’s result, where we lost $3 million. This year we had a profit of $3.3 million, so that was pleasing for an R&D company. One of the key drivers of that result was that we did a deal in Japan, a licence deal with AGC, which is a major Japanese biopharmaceutical manufacturer. And they licensed our Progenza technology for applications in Japan. The licence fees from that transaction were about $10 million in the last financial year, which was the real driver in our profit result.
The other highlights in the year were that we achieved a couple of important milestones. One was the AGC transaction itself, which we’ve been working for about 12 to 18 months on. So to actually complete that with a major Japanese company was a real feather in our cap, to get it done. The other was that we had some great results in our Phase One clinical trial that we reported in May, for Progenza for osteoarthritis. So we got good results, being the safety results were good. But we also had some interesting efficacy results in pain reduction and knee osteoarthritis. And also the cartilage degradation slowed in the treatment group, over the placebo group. And so we’re pretty encouraged by the results which will really set us up for doing a Phase Two deal in Japan that we’re trying to do now.
Jessica Amir: Now to your therapeutic areas in a little bit more detail. Can you tell us what you’re doing in the osteoarthritis space?
John Martin: What the product does in essence, it reduces pain for people and improves their quality of life. And for many people, it will see really putting off substantially, any joint replacement surgery that may have been on the horizon for them. And this is pretty significant for people who have got painful knees. With an aging population, as you can imagine, increasing numbers of people are finding that what they have is joint pain. And that that joint pain is hard to manage the pain for, so they take a lot of medication.
Jessica Amir: What’s the business doing in the cancer space?
John Martin: We have a different technology in the cancer space; we have immuno-therapy. And so what that therapy does in simple terms is it takes some of the tumour, the patient’s tumour, we attach it to a bacterial agent, which then is re-presented back into the body. And the idea being that what it does, it lights up the immune system, wakes it up, because the immune system hasn’t been working hard enough. It’s allowed cancer to develop in a way where the immune system, has failed to address those cancers.
Jessica Amir: What are you doing in the skin condition or wound healing space?
John Martin: In the dermatology space, the stem cells that we use in something like osteoarthritis, it’s what the cells secrete that is most critical. And so what we’ve done is we’ve taken those secretions and we’ve grown them, and we put them in a gel. So what we’re doing is studies to test the anti-inflammatory and wound healing properties, in a topical application where it’s very hard to apply cells topically, but you can apply the secretions.
Jessica Amir: John, you spoke about your collaboration with AGC. Can you tell us who else are you working with?
John Martin: We have a range of different relationships. We have what I describe as our collaboration R&D relationships. And there are universities who we work with, including Macquarie, the University of Adelaide and we’re looking at a relationship with Monash University right now, Sydney University, the Kolling Institute at North Shore Hospital. We have a range of what I describe as our R&D relationships. When it comes to, call it the commercial side of our business, that’s where AGC really is an anchor to our Japan strategy. Because they’re a large global company, who specialise in biopharmaceutical manufacturing, so they want to manufacture our product in Japan. And from that relationship, we’re hoping to build further clinical relationships in Japan, which then allow us to spread out into other parts of the world.
Jessica Amir: A more general question now John. What’s the potential for stem cell therapy and immuno-oncology on making a major contribution to health outcomes, over the next five to 10 years?
John Martin: The one thing about regenerative medicines, including stem cell therapy, is the capacity to address underlying disease. So we have an increasing number of chronic diseases with an ageing population, whose diet is not optimal. And so we’re seeing the hospital system burdened by expensive therapies to keep people going. What they’re not doing though is they’re not addressing underlying disease, which is exactly what regenerative medicines do. They seek to regenerate and repair, be it damaged tissues or cells or what have you, which really allows people to reset their disease and actually modify the disease, rather than just treat the symptoms.
So I think that stem cell therapy from immuno-oncology, you will see I think, that the next five years will be an exciting time for people looking for new therapies, on the horizon. To really try and address what have been chronic diseases that are now starting to burden healthcare systems substantially.
Jessica Amir: Last question now John. What’s the long-term ambition for the company?
John Martin: The long-term ambition for the company is in simple terms, to have multiple licence partners, both on manufacturing and clinical applications globally. We will be the developer of technology. We will then go out at the right time and licence out to those licensing parties. And they are typically large pharmaceutical companies and big biotech companies. And our job will be to be the brains behind the operations of the development of the technology. And that is essentially our out-licensing business model. So if we’re successful, it’s because the technology and the clinical applications that we’ve licensed have been successful in markets.
Jessica Amir: John, thank you so much for the update.
John Martin: My pleasure Jess, thanks for having me here.