Cynata positioned for 2026 trial readouts after doing the leg work in 2025
Cynata is preparing for two trial readouts in 2026 in knee osteoarthritis and acute graft-versus-host disease.
Cynata preparing for two trial readouts in 2026 in knee osteoarthritis and acute graft-versus-host disease
2025 considered a transitional year for stem cell and regenerative medicine company
Cynata’s proprietary Cymerus platform overcomes major limitations in traditional mesenchymal stem cells manufacturing
Cynata Therapeutics (ASX:CYP) CEO and managing director Dr Kilian Kelly has reflected on what he described has been a "transitional year" for the stem cell and regenerative medicine player, which is preparing for trial readouts in 2026.
Kelly said this year had been all about transitioning Cynata from an early-stage clinical biotech to a late-stage one, preparing for two efficacy trial read outs with one potentially leading to commercial approval and partnerships.
"I see 2025 as being a year that has moved us from one side of the hill to another," Kelly said.
"We’re now very much turning into a late-stage clinical company with products where commercial approval is on the horizon."
Melbourne-headquartered Cynata was born from discoveries at the University of Wisconsin–Madison (UWM), a global leader in stem cell science.
Its technology uses induced pluripotent stem cells (iPSCs) to generate mesenchymal stem cells (MSCs) via a unique precursor cell known as the mesenchymoangioblast (MCA).
"MSCs occur naturally in our bodies but in very small numbers and have a lot of potential in treatment of disease through balancing immune system and promoting tissue repair and regeneration," Kelly said.
MSC therapy is about getting much larger numbers of MSC cells and administering them to patients like a normal pharmaceutical product such as injection, intravenously, a skin application to achieve results beyond the naturally occurring cells.
Because the immune system is involved in so many disease processes, Kelly said any therapy that could restore its balance had the potential to slow or halt progression.
"Lots of disease processes also cause tissue damage so being able to promote tissue repair MSC therapy can also enable the body to recover from various diseases," he said.
Like Mesoblast, Cynata develops MSC based therapies but with a difference
Cynata joins fellow Melbourne-based biotech Mesoblast (ASX:MSB) in developing MSC-based therapies.
Kelly previously worked at the dual Nasdaq-listed $3.23 billion company, which became the first company in the world in December 2024 to gain US Food and Drug Administration (FDA) approval for an MSC therapy.
Mesoblast’s Rynocil was approved for treating paediatric patients aged two months and older with steroid-refractory acute graft-versus-host disease (SR-aGvHD).
"Mesoblast was my introduction to cell therapy," says Kelly, who has been head of Cynata since June 2023 after previously being its chief operating officer.
"The difference between us and Mesoblast and essentially everyone else in this sector is how we manufacture cells."
Challenges of conventional MSC therapies manufacturing
Kelly said the conventional way of making MSC-based products involved getting donated tissue, for example MSCs can be isolated from donated bone marrow.
"You end up with a very small number of MSCs from each donation and then they grow them in the lab, which is a process called culture expansion where one cell becomes two, two becomes four and so on," he said.
"It enables them to generate a reasonable number of cells but there’s a couple of problems with this approach."
Hundreds of millions of MSCs are needed per patient treatment, yet a typical donation only yields around 20,000.
MSCs also can’t divide indefinitely — they eventually hit a limit, and even before that point, they start to lose function as they’re expanded.
"Ultimately, it means you need more donors and that can be a challenge logistically," Kelly said.
"If you need people to donate bone marrow regularly that is not easy because it is a big deal."
Another major challenge is donor variability, with MSCs from different donors showing significant differences in potency, function and overall quality.
"That is a real problem when you’re trying to make a pharmaceutical-like product and that’s how really every other organisation working with MSC products manufactures," he said.
"Over the last 20 years or so there’s been about 1800 clinical trials on MSCs initiated by numerous different companies, universities and hospitals and basically all those trials except Cynata’s have relied on that donor-derived process."
However, despite the trial numbers there has not been many approvals with Kelly putting this down to several reasons including manufacturing limitations.
"If you have product with variability between batches because it often comes from various donors or has lost potency and functionality, it can impact clinical results and I think because of that there’s been some disappointment and slower progress," Kelly said.
It has also been difficult to produce the quantity of MSCs needed in an economical way for large clinical trials.
Overcoming challenges of donor-derived MSCs
Cynata’s proprietary Cymerus platform overcomes major limitations in traditional MSC manufacturing by enabling efficient, economically viable production at commercial scale.
The company’s off-the-shelf innovative approach makes it possible to:
- Produce virtually unlimited quantities of consistent, high-quality MSCs from a single donor
- Remove the need for continual donor sourcing
- Preserve cell potency without extensive culture expansion; and
- Deliver a standardised product with greatly reduced variability.
"As our starting material we use an iPSC and the advantages of those cells is they can keep reproducing forever so you can make as many cells as you want," Kelly said.
Cynata has an iPSC bank in place so doesn’t need new donors. Its proprietary process then turns iPSCs into MSCs.
"We avoid those challenges of finding new donors, variability and so on and also have a process that is scalable and consistent," Kelly said.
"It’s an incredibly scalable process and the product that comes out is consistent and retains the potency and functionality of the cells.
"Our products can be mass produced and shipped world-wide like a typical pharmaceutical product and because they’re available in that off-the-shelf manner they’re ready to be used."
Countdown to 2026 trial results
Cynata currently has four clinical programs underway including a phase III Australian trial in knee osteoarthritis and a phase II clinical trial in acute graft-versus-host disease (aGvHD).
Both trials are nearing completion with read uts forecast for Q2 CY26.
"Each of those in their own right have potential to be transformative for the company, which is the most exciting," Kelly said.
The knee osteoarthritis trial being run by the University of Sydney is being funded by the Federal Government through a National Health and Medical Research Council (NHMRC) grant.
"It means we didn’t have to fund the trial and just supply the product," Kelly said.
"The trial aims to show MSC treatment does improve symptoms but additionally it stops degeneration of the cartilage.
"If we’re successful it could be the first treatment worldwide shown to have a disease modifying effect in osteoarthritis."
Positive results would support Therapeutic Goods Administration (TGA) regulatory approval, while an additional trial would be needed for the US and rest of world approval.
"If successful we’ll move forward in Australia and at the same time our aim would be to enter into a commercial partnership for example with a big pharma company who wants to fund a further trial and move forward worldwide," Kelly said.
The aGvHD trial aims to treat a rare condition occurring when transplanted bone marrow material rejects the body.
It is the opposite to usual organ transplants, when the body does the rejecting.
"A complication in blood cancers where bone marrow transplants and similar treatments are used is graft-versus-host disease," he said.
"It is treated initially with steroids, but they only work in about 50% of cases and in the remaining 50%, known as steroid-resistant patients, the outlook is very grim with two-year survival rates in the region of 20%."
Cynata reported encouraging results from its phase I trial in patients with steroid-resistant GvHD, with 13 of 15 patients showing at least a one-grade improvement — a key efficacy endpoint for the US Food and Drug Administration (FDA).
Eight of those patients achieved a complete response, meaning their condition fully resolved, and the trial recorded a two-year survival rate of 60%.
"That was very encouraging. Additionally, MSC products, and not just ours, have been shown to be very safe, which is important for GvHD because lot of other drugs being investigated as a treatment are toxic," Kelly said.
Mesoblast’s Rynocil also addresses GvHD but in a smaller paediatric population who are steroid resistant – SR-aGvHD.
"Our global phase II trial is treating patients earlier so as soon as they’re diagnosed with GvHD and they’re randomised to receive steroids plus MSC or steroids plus placebo," he said.
"We’re really testing the addition of MSC to steroids as a treatment."
Pipeline extends into wound care and transplant medicine
Cynata is also running a trial in diabetic foot ulcers and a trial in patients undertaking a kidney transplant to prevent rejection.
“We’ve got results from a phase I trial in diabetic foot ulcers which were really encouraging, showing quite a dramatic improvement in wound healing," Kelly said.
"We were applying the MSC topically using a wound dressing and so that’s an exciting indication we’re looking to move forward."
Cynata in the past couple of months has just completed treatment in the first cohort of three patients in a phase 1/2 trial of MSCs in kidney transplant patients.
"We’re undergoing a data and safety monitoring board review for that trial at the moment, which we should be able announce the outcome of shortly," Kelly said.
"Overall, it means we now have a deep pipeline and puts us in a position where we will have much more regularity of clinical news flow for investors."
While Cynata is a Stockhead advertiser, the company did not sponsor this article.
This article does not constitute financial product advice. You should consider obtaining independent financial advice before making any financial decisions.
Originally published as Cynata positioned for 2026 trial readouts after doing the leg work in 2025
