BioWorld International Correspondent

LONDON - Scotland is investing £9.5 million (US$18.8 million) to attract stem cell specialist Cellartis AB to set up a research and development facility in Dundee.

The Swedish company has a brief to develop robust and repeatable processes for differentiating different cell types from human embryonic stem cell precursors, and an automated process for manufacturing them in volume.

The techniques are seen as the missing elements in Scotland's attempts to build a laboratory-to-patient competence in stem cells.

The money was awarded to Cellartis by the public investment agency ITI Life Sciences, following a survey of where the gaps are in Scotland's developing stem cell infrastructure, and an international search to find the company that is best equipped to fill them.

The obvious candidate for the funding might have been Scotland's home-grown specialist, Stem Cell Sciences Group plc of Edinburgh. But Fergus McKenzie, program manager at ITI Life Sciences, said that to date Gothenburg-based Cellartis has produced the biggest range of differentiated cell lines from human embryonic stem cell lines.

"Based on market surveys, we choose the subject [of the research], and then we study companies to see what they have to offer," said McKenzie. "What we are trying to do is a somewhat unusual business model, where we are a public body funding commercially driven research. We have to own all the intellectual property and some companies may decide they can't adhere to our requirements."

Unlike being given a grant, the progress of research is closely monitored. "For example, lab notebooks belong to ITI," McKenzie said.

The aim is that at the end of the project, ITI Life Sciences will have rights to end-to-end processes for differentiating cell lines, and for manufacturing them in volume, including quality control protocols that will guarantee the cell lines are consistent.

McKenzie said that to do this, it may be necessary to in-license some elements of the technology. "We would then want to out-license [our process] and would think Cellartis will probably be one of the first to want to [take a license]."

Under the terms of the deal, Cellartis will collaborate with scientists in the faculties of medicine and life sciences at Glasgow University.

Matts Lundwall, CEO of Cellartis, said the collaboration, "is in line with our strategic goal of scaling-up our human embryonic stem cell technology." The company's immediate objective in its own research is to develop cardiomyocytes and hepatocyes for use in drug discovery. It has developed 30 defined cell lines, two of which are listed on the U.S. National Institutes of Health registry and 20 in the UK Stem Cell Bank. Cellartis claims to be the first to have characterized a stem cell-derived line with no use of animal components, a necessity if such cells are to be used in humans.

Initially, the high volumes of cells produced as a result of the project will be used in drug discovery. According to ITI's analysis the market for cell-based tools was worth $1.4 billion in 2001 and has been growing strongly since. But the cell lines developed will be of suitable quality for therapeutic applications, and will be applied to further Scotland's ambitions to become an international center for regenerative medicine.

Earlier in January, the Centre for Regenerative Medicine was launched in Edinburgh, pulling together academic research and clinical groups. Last October the development agency Scottish Enterprise gave a £2 million grant for the formation of the Roslin Stem Cell Centre. The center is developing GMP-grade stem cell-derived lines with no intellectual property attached. Those are to be made available to both companies and academics.