- Cynata Therapeutics and Japanese pharmaceuticals company Sumitomo have ended talks of a potential Cynata buyout
- Sumitomo offered to grab all Cynata shares for $2 per each in July this year, and the companies started negotiating the terms of the purchase
- Today, however, the companies said they couldn’t come to an agreement, and have said their goodbyes as a result
- Cynata will keep developing some important medical trials with Fujifilm
- Cynata shares closed 5.72 per cent down on yesterday, worth $1.40 each
Cynata Therapeutics has announced today its potential takeover by Sumitomo Dainippon Pharma has fallen through.
Cynata, an Aussie stem cell company, saw shares hit an all-time high in July 2019 after announcing a proposed takeover from the Japanese pharmaceutical giant.
Sumitomo had offered a potential buyout of all Cynata shares for $2 apiece. At the time, Cynata’s shares were floating around $1.20 each.
This massive premium on the share price caused a surge in investor interest, and Cynata’s shares were trading as high as $1.85 per share a fortnight later.
Today, the company shares closed at $1.40 each.
Cynata has been in negotiations with Sumitomo since the July announcement but said today it had been “unable to reach agreement on terms to its satisfaction” of the potential Sumitomo takeover. Both companies subsequently said their farewells and ceased discussions.
Sumitomo, which is listed on the Tokyo Stock Exchange, released a similar announcement today, saying the companies could not come to a mutual agreement for the takeover.
However, Cynata said it will keep progressing its Phase 2 clinical trial programs in osteoarthritis, critical limb ischemia, and — importantly — graft-versus-host disease (GvHD) in partnership with Fujifilm’s medical division.
The GvHD trials are significant for several reasons.
Firstly, Cynata said in July it believes the Fujifilm partnership could have been a significant factor in the company’s rapidly rising share price. Shares saw a steep incline before the announcement of the Sumitomo takeover, and in response to an ASX query Cynata cited GvHD research as a potential impacting factor.
Beyond this, the partnership means Cynata’s lead GvHD stem cell product is set to be developed and commercialised by Fujifilm.
So, perhaps the withdrawal of the potential Sumitomo purchase is not as much of a heavy hit for Cynata as it may seem.
Nevertheless, Cynata shares closed 5.72 per cent down on yesterday, worth $1.40 each in a $143.97 million market cap.