Shares in stem cell and regenerative medicine firm Cynata Therapeutics have surged after the company said it is negotiating a deal with Japan's Fujifilm Corporation to develop and commercialise some of Cynata's stem cell technology.
It is expected that the agreement - which Cynata hopes will be finalised in the fourth quarter of 2016 - will grant Fujifilm an option to an exclusive, worldwide licence to make and sell Cynata's lead product designed to prevent and treat graft-versus-host disease.
Graft-versus-host disease occurs when newly transplanted donor cells attack the recipient's body.
It is expected that Fujifilm will also be granted certain rights to Cynata's Cymerus technology for the prevention and treatment of other diseases.
In addition, it is anticipated that Fujufilm will buy Cynata shares to the value of $US3 million ($A3.95 million), at a price including a 35 per cent premium.
Cynata chief executive Ross Macdonald said Fujifilm was one of the most dynamic, progressive companies in global regenerative medicine.
"The proposed acquisition by Fujifilm of shares in Cynata at a substantial premium is a strong vote of confidence in Cynata's unique technology and we look forward to closing the definitive agreement in the near future," Dr Macdonald said on Monday.
Cynata is developing a therapeutic stem cell platform technology called Cymerus, which can produce all the stem cells one would ever need for therapeutic purposes from a single donation of cells from one donor, eliminating the need for multiple donors.
Fujifilm, originally known for its photographic film, has been developing technology in other areas since the 1980s, including photography, printing and regenerative medicine.
Shares in Cynata were five cents, or 13.51 per cent, higher at 42 cents at 1312 AEST.
