Wednesday, 29 February 2012 11:45

Cytori- its Partners-past and present-Olympus

Partner Olympus, as a Company, has major issues to resolve after the accounting cover-up scandal emerged. Dont want to comment that here, but you can read all about Woodford, Kikukawa and tobashi in the Wikipedia article- Link here

According to Cytori management this scandal doesnt affect the relationship between Cytori and Olympus at all, which could be partially true, but new strategic developments will hardly be possible, since Olympus probably is like a ship after a fire in the machineroom, after which navigation, power supply etc etc is all non functioning. As we speak- late 2012- CEO Sasa has taken over and the BOD is newly installed. In some aspects the Olympus-Cytori relationship seems to be drawing to an end, but certainly not all. Time will tell. 



Japanese companies tend to be very loyal partners also to smaller outfits, but prefer to operate in the background and out of the limelight. I tend to think Europeans are a kind of "happy medium" in that "profile", compared to the "business-media" style in the US, where lies and hype are covered by forward looking statement "exceptions" and concise legal review before uttering "media statements".

 In the Q1 CC of 2009, Calhoun described Olympus as follows in his prepared statements-  


also, please take note about his statement on seeking regulatory approval of Celution One- meaning the device should have been "ready" and useable for commercial as well as pilot- or pivotal clinical trials purposes after that statement. Obviously things took a bit longer- around three years or so, since (CE mark WITH added claims) approval from EMA was only received in November 2011.

The key to it all 

The Partnership announcement in November 2005

On November 4th 2005,Cytori announced its partnership with Olympus, which followed the equity participation from May of that year (2005- 1,1 Million shares at $10)- see announcement here-

"Olympus Corporation, through its leading medical life science business, recognizes the potential of regenerative medicine and the enormous role that adipose stem and regenerative cells could soon play in healthcare," said Yasunobu Toyoshima, General Manager, Head of Medical New Business Project of Olympus. "Cytori's technology represents a novel approach to regenerative medicine, as it enables real-time delivery of autologous stem and regenerative cells. Based on Cytori's progress in the development of therapeutic applications of these cells, we look forward to collaborating on next generation designs of these state-of-the-art devices

Work done by both parties- i.e Due Diligence

I still have a transcript of the conference call on file which nicely describes the work done by both parties in achieving this deal- link here - an excerpt of that call-

Question by Brian Gagnon :Okay. Alright. Next question. Can you talk a little about the due diligence that Olympus has done?

Mark Saad: I'll take that one äs well. There has been an extensive amount of mutual due diligence conducted over the past year. both by Olympus äs well äs by Cytori. I'd say that, just to describe the scope of thaolympus-endoscopest, there has been a detailed amount of due diligence into our technology, our pre-clinical data which has been achieved over the past five years, the 350 plus pure reviewed publications, that they have examined in detail, our 100'ish filed and issued patents, numerous Interviews with clinicians all around the world in a variety of therapeutic indications, and I think Olympus has concluded after a significant amount of time that Cytori has a clear and dominant position in the space.
And I would also say that on the other side, we've done a lot of diligence äs well. I don't think it's any surprise to the folks that have called the Company that it has been a stated strategic objective for Cytori to align ourselves in a substantive way. We have spent a lot of time over the past several years figuring out what is the right way to launch a meaningful strategic relationship. And we considered many potential partners, many potential deal opportunities and deal structures. What we found is that Olympus has truly distinguished themselves in a variety of ways, both through the quality of their organization, the high level of sophistication and their market leadership position and specifically to us, really sharing a common vision with how we expect that a very dynamic new technology is going to be commercialized. And obviously they put in a very significant equity stake and showed us pretty early on,  that they are very serious about partnering with us. This enables us to focus on scientific clinical development to drive value in future partnerships. This is a win-win in many ways. A lot went in this, on both sides of the table. They certainly did their homework with no short cuts, äs we did the same.

The result of the Partnership to date

Here we are then -celution one

The Mercedes-Benz of all Celutions. As Tom tend to say- the one with all the "bells and whistles", which does everything twice as good and as fast as what the engineers and scientists of Cytori have produced sofar. We have to wait sometime before we know for which applications this device will be used-

Why was Olympus interested in a partnership?

Answer: since Olympus hasolympus bone been involved since 2001 with stem cell research - yes-they were heavily interested. In the early days, they participated in using a "competence" centre in Kobe (picture below), where they pursued development of their synthetic bone material-ß-tricalcium phosphate (OSferion) in combination with marrow stem cells according to the process pictured on the left.

olympus kobe

They utilized this competence centre together with other large companies like Kirin Breweries and Terumo Corp.


The last company, a Cardiac specialist, acquired GenVec Myoblast technology which is/was similar to the BioHeart tech- for the birds -so to speak. They cultured the required cells in gigantic looking breeding devices (picture below) , but I guess that was not what they were looking for and came (rightfully) back to investigate the Cytori technology, with known results. olympus culturing

Interestingly enough -Olympus and Terumo got together in a Joint Venture afterwards- basically on bone development, but also other stuff- see announcement here- I think this might have an impact on Cytori´s future also sometime- when things settle down. Anyway, there is more to this all - as discussed in Relections of 11 years CYTX listing (see menu bar) we still are awaiting news on the Fistula application, which is assumed to have been developed by Olympus. I do think similar pilots and pivotals have been going on in the orthopedic field. We will learn some fine day, but that might take some time- as usual. 


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