BioWorld International Correspondent

SYDNEY, Australia - Singapore-based CyGenics Ltd. switched its headquarters to Melbourne, Australia, and plans to test the strength of the still robust local biotech market with an A$18 million (US$12.4 million) initial public offering.

The money would pay for two sets of Phase I and II trials. The first set would be of a technique to harvest stem cells, increase them and transplant the increased numbers back into the patient. The second, using related technology, would test an artificial thymus able to create T cells for patients lacking them. The trials would start in Australia later this year.

Following a complex set of mergers of companies in both Singapore and the U.S. as part of the IPO deal, the company will have three divisions.

The Singapore-based CordLife Division is involved in tissue banking of umbilical cord blood and blood stem cells. The Cell Sciences Division, also in Singapore, has developed a range of disposable cell-growth devices, including a 3-dimensional cell-growth matrix.

The third division, Cytomatrix, in Boston, developed the stem cell expansion and T-cell-growth technology. That technology involves hematopoietic stem cells (HSCs) either taken from a patient or from umbilical cord blood. It involves replicating the conditions in the bone marrow, where HSCs are produced, but without the use of growth factors such as cytokines. Those growth factors cause the stem cells to differentiate into maturing blood cells, which are of lesser clinical value.

CyGenics' float documentation states that using the matrix, the cell therapeutics division had achieved a reproducible twofold to sixfold expansion of blood stem cells in one week, while preserving the quantity of the cells.

The company is in the final stages of planning for clinical trials of that technique. The trials are estimated to cost A$1.2 million for Phase I/II and A$3.5 million for Phase III and approvals.

A similar story can be told for the artificial thymus trials, with researchers replicating conditions inside the thymus to produce T cells.

CyGenics CEO Steven Fang said that the company's trials would be the first in the world to increase the quantity of those cells outside the human body, without changing their nature and without the need to add cytokines or serums.

Regarding the move, he said, "Australia offered the right combination of advanced biotech sector and costs, plus a sophisticated equity market for our sector."

The IPO offer of 18 million shares at A$1 each is scheduled to close May 28.

CyGenics' float is part of a strengthening market for life sciences in Australia. An assessment by PricewaterhouseCoopers found that the life sciences sector increased 30 percent to $14.6 billion thus far this year, measured at March 31. Karen Dado, author of the report, said the Australian market is becoming more sophisticated, as shown by Australian companies' willingness to expand offshore. In the last three quarters, local companies have formed 47 alliances with overseas companies, she said.