BioWorld International Correspondent

LONDON - Stem Cell Sciences plc completed its listing on the Alternative Investment Market in London, but had to settle for about £6 million (US$10.5 million) rather than the £10 million to £15 million of its ambitions.

The money will fund development of its embryonic stem cell products and services, which include serum-free cell culture media and customized cells for research and development. The main focus is on expanding business in the U.S. through a new operation the company plans to set up in California. The Edinburgh-based company intends also to progress to the preclinical development of embryonic stem cell lines for the treatment of central nervous system diseases.

"Overall, I'm absolutely delighted," CEO Peter Mountford told BioWorld International. "We've achieved what we set out to do, and although we raised less than we were aiming for, we don't need to change the business plan that much."

Stem Cell Sciences (SCS) placed 5.1 million shares at 97 pence per share, giving a market capitalization of £21 million. Trading under the ticker "STEM" began Monday. Previously, the company has raised £5 million from private investors and £5 million in government grants and collaborative deals.

For a stem cell company, SCS has a longish history, having been founded by Mountford in 1994 when he returned to his native Australia after working with stem cell pioneer Austin Smith in the UK. For the next six years, SCS operated as a virtual company, employing its first staff in 2000. In 2001 a collaboration was established with the RIKEN Center for Developmental Biology in Kobe, Japan, and in 2003 Mountford returned to the UK and set up the SCS headquarters in Edinburgh.

In 1993 Mountford and Smith filed the so-called Edinburgh Patent on the isolation, selection and propagation of animal transgenic stem cells, and SCS was set up to commercialize that work. Over time, the company has expanded its activities from growing, differentiating, selecting and purifying transgenic animal stem cells for use in discovery, to developing human embryonic stem cell lines that it aims to apply to cell therapies.

Although the company's stated objective is to deliver clinical benefits from embryonic stem cells, SCS always has operated in a conservative manner, gradually building revenues from services and financing research through government grants and collaborations. It now employs 40 staff and claims is the largest work force of any embryonic stem cell company.

Mountford has complained that despite a 10-year track record and revenues from services, it has proved impossible to raise money from venture capitalists, and he is happy to have made it to a public market.

"Listing on AIM is a good move for us," he said. "We have the structure and size, and will have the news flow to make a listing work."

The money will fund SCS for the next 18 months.

"The principle expenditure will be in expanding the business team in the UK and U.S., and investing in automating our discovery platform," Mountford said. "In addition, we are looking to push forward with our preclinical work in Parkinson's disease or epilepsy."

SCS is the lead commercial partner in EuroStemCell, a pan-European consortium set up to lay the foundations for future clinical trials of stem cells.

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