Cynata Therapeutics secures $8.1m funding after promising results from diabetic foot ulcers trial

Cynata Therapeutics Limited, a clinical-stage biotechnology company listed on the Australian Securities Exchange (ASX: CYP), has raised A$8.1 million through an institutional placement. The funding comes on the heels of a significant breakthrough in the company’s Phase 1 clinical trial for diabetic foot ulcers (DFUs), where its innovative CYP-006TK treatment demonstrated safety and efficacy.

The Melbourne-based firm announced that it had received firm commitments from new and existing institutional investors for $8 million, complemented by an additional $0.1 million through a conditional director placement. The funds will enable Cynata to advance its pipeline of clinical programs, including projects focused on graft-versus-host disease (GvHD), kidney transplants, and osteoarthritis.

Pioneering diabetic foot ulcer therapy

The clinical trial for CYP-006TK marks a major milestone in addressing diabetic foot ulcers, a condition known for its high risk of complications and limited treatment options. Cynata’s study not only established the treatment’s safety but also delivered compelling efficacy results. Patients treated with CYP-006TK exhibited significantly improved wound healing compared to those receiving the standard of care. Notably, the data indicated that larger wounds healed more effectively under Cynata’s therapy.

This success bolsters the commercial potential of Cynata’s proprietary Cymerus platform, which uses induced pluripotent stem cells to produce mesenchymal stem cells (MSCs) at scale. Dr Kilian Kelly, Cynata’s CEO, emphasised that the DFU trial results, alongside earlier positive outcomes from the CYP-001 program targeting GvHD, illustrate the platform’s versatility and attractiveness to potential partners.

Strategic use of funds

The $8.1 million raised will support several key initiatives, including engagements with regulatory agencies such as the US Food and Drug Administration (FDA), advancing licensing discussions, and preparing for additional clinical trials. Manufacturing activities will also be scaled up to accommodate the growing demand for clinical development of Cynata’s therapies.

The placement offer price of $0.18 per share represented a discount of approximately 16% to the last traded price, reflecting a strategic move to attract and secure investment. Euroz Hartleys Limited served as the sole lead manager for the placement.

Investor confidence and future outlook

The strong backing from institutional investors underscores growing confidence in Cynata’s innovative therapeutic pipeline. The company is preparing to deliver key results from multiple trials over the next 18 months, including Phase 2 data for GvHD, Phase 3 results for osteoarthritis, and Phase 1/2 outcomes for kidney transplant patients.

Dr Kelly noted that the DFU trial success positions Cynata to pursue partnerships actively, further enhancing its long-term prospects. He expressed gratitude for the support of shareholders and welcomed new investors during this transformative period.

Building momentum for Cymerus platform

Cynata’s Cymerus platform continues to demonstrate its potential across diverse therapeutic areas. Beyond DFUs and GvHD, preclinical models have shown promise in treating conditions such as idiopathic pulmonary fibrosis, heart attacks, and acute respiratory distress syndrome. The platform’s scalability and efficacy remain key factors driving its appeal in the regenerative medicine space.

Cynata’s leadership, supported by a strengthened cash position, is poised to accelerate development across its portfolio, ensuring the company remains at the forefront of cell-based therapies.