BioWorld International Correspondent

LONDON - VetCell Bioscience Ltd. is raising £10 million (US$20.3 million) to translate its stem cell technology for treating tendon injuries in race horses to the treatment of humans.

The company currently is raising the first £2 million from the existing 52 investors and high net worth individuals, paving the way for a formal venture capital round to make up the rest, beginning in September.

Greg McGarrell, CEO, told BioWorld International the investors, many of whom are race horse owners, have been supportive. "These are guys who would spend half a million on a race horse, only to see it break down on the course and then be worth £1,000, so they understand risk."

Meanwhile, soundings have been taken over the second, larger element of the fund raising, and McGarrell said the feedback is positive. "The £2 million first tranche will put us in a stronger position and enable us to get a better price."

McGarrell believes VetCell's autologous mesenchymal stem cell technology will translate directly from horses to humans. "There is no laboratory model for tendon injuries in humans, but it is often overlooked when developing drugs that there is often an equivalent animal health need that is a good model for humans. Don't forget the horse is an athlete; horses are the only animals to compete in the Olympics."

To date VetCell has data on the treatment of 500 horses, which have had treatment, gone through a year of rehabilitation and done a year of performance racing subsequently, providing evidence of safety and proof of concept. "When we over use horses, they get musculoskeletal injuries like humans. Horses are a perfect research model," McGarrell said.

The company has made post-mortem studies of treated horses. They show that tendons treated with its stem cells heal without the scarring that occurs normally. "The newly formed tissue had the elasticity of the original," McGarrell said.

Horses treated with the VetCell product have returned to the track and won races. Apart from higher initial response rate, there is less chance of subsequent tendon failure, according to McGarrell. Given conventional treatment about 30 percent of horses recover from tendon injuries.

However, 50 percent of those will have subsequent breakdowns, as the healthy tissue attempts to compensate for the loss of elasticity caused by the fibrous scar tissue.

Eighty-six percent of the horses given VetCell's stem cell treatment recover, of which 30 percent are re-injured.

Newmarket-based VetCell is not targeting its human treatment at athletes, but at more mundane tendon wear suffered by those who are middle-age.

The company has GMP production in place at contract manufacturer Eccocell Biotechnologies GmbH in Lagenfeld, Germany, one of the laboratories where the equine product is made.

The new funding will enable VetCell to set up a pilot clinical study, probably in the UK, in which 25 patients will be treated.

Based on the equine experience, McGarrell expects the unit cost of the human product to be between £1,500 to £2,000 and believes it will be reimbursable.

VetCell has a patent on the combination of the cultured cells with a bone marrow supernatant as carrier, administered under ultrasound guidance into the core of the lesion. When the product is injected, the supernatant coagulates, keeping the implant in place and releasing growth factors that aid the healing process.

Formerly known as the Equine Regenerative Medicine, Vetcell was founded in 2002 in partnership with the Royal Veterinary College and the Institute for Orthopaedic and Musculoskeletal Science, both in London.

The current shareholders have invested £850,000 to date.

In preparation for moving on to human trials, the company recently appointed David Glover as chairman. He was the chief medical officer of Cambridge Antibody Technology Group plc, which was taken over by the pharmaceutical company AstraZeneca plc.