Tuesday was the type of shares of Cynata Therapeutics Ltd (ASX: CYP). The shares of the clinical biotech company ended up 5 percent up at $1.20 on the day. This extends its gain by nearly 15 percent to the present year.
The news was that for the financial year 2018/2019 the R&D Tax Incentive Refund obtained from the cell therapy specialist for Cynata’s benefit.
This refund increases the cash condition of the organization, which at the end of September stood at $9.2 million.
Management stated that it will provide additional resources for its comprehensive and important Phase 2 clinical trial programs for ischemia and arthritis critical limb products. It will also help the planned phase 2 analysis of CYP-001 in Japanese Fujifilm’s graft-versus-host disease.
I suspect that some investors have taken advantage over the last several months of their pullback on their share price and have bought shares without any other news from their company so far this year. After the collapse of the acquisition talks between it and Sumitomo Dainippon Pharma Co, Cynata’s shares fell substantially in the second half of last year.
On 20 June, on the possible acquisition of all its shares for a price of $2.00 per share in cash via a scheme, Sumitomo received a clear, non-binding, conditional proposal from Sumitomo.
On 17 October, however, after not being able to come to an agreement on terms, the two parties withdrew from the discussions. Today’s profit means that the shares of Cynata are traded in the pre-acquisition deal now. But if its clinical trials in phase 2 are successful, that may change. Both critical limb ischemia and osteoarthritis trials are planned for the first half of the calendar year 2020 and should be looked for.