LONDON - ReNeuron Ltd., which is developing stem cell therapies for central nervous system diseases, raised #19.5 million (US$28 million) when it floated on London's Alternative Investment Market (AIM) last week. Trading in the shares commences today.

CEO Martin Edwards CEO told BioWorld International, "We are very pleased. This was at the top end of the price range and the offering was oversubscribed."

The money is expected to fund the company for two and a half years, allowing it to commence a Phase I/IIa clinical trial in the treatment of stroke, currently planned for the second half of 2001, and move its small-molecule compound, ReN 1869, into Phase II trials in neuropathic pain.

ReNeuron, of London, has developed clonal lines of pluripotent neuroepithelial stem cells, which differentiate into different types of brain cell in situ after grafting. The cells are immortalized, allowing them to be grown and expanded indefinitely in appropriate culture conditions. After implantation by injection, they migrate to the site of damage, allowing some flexibility over the transplant site.

Since it was formed in 1997, ReNeuron has worked on the mouse cell line MHP36. It has demonstrated functional recovery in rats following strokes, with cells migrating from the site of insertion to the site of the damage, differentiating into both neurons and glia, and repairing the behavioral deficit.

In parallel, the company has worked to develop human neural stem cell lines, and to date has succeeded in developing over 100 human cell lines from different regions of the brain.

"It is good to have developed so many cell lines, but this is also almost an embarrassment of riches," Edwards said. "We are running animal models at present to select the best ones for future clinical trials." The intention is to develop cell lines for treating Parkinson's, Alzheimer's and Huntington's diseases and cerebral palsy.

The cell lines are conditionally immortalized, enabling the cells to divide in the laboratory at temperatures of 33 degrees Celsius. Division ceases, and the cells mature, when implanted into the brain where the temperature is higher at 37 C.

The Phase I/IIa trial in stroke will involve about 12 patients who have reached a stable condition three to six months after suffering a stroke. "If you have a functional deficit at this stage you are unlikely to recover. If you can't move your hand at six months, you won't be able to in the future," Edwards said. "Stem cell technology is very new, and to be honest, no one knows if it will work in humans, but we have seen functional recovery in animal models even when administered some time after the stroke."

If the initial trials are successful, the aim is to treat patients as soon after the stroke as possible.

ReNeuron intends to find a partner when it starts the clinical trial.

ReN 1869 is one of a family of compounds, neurins, which ReNeuron in-licensed to expand its pipeline. Neurins act by stabilizing C-fibers, small-diameter nerve fibers in the central and peripheral nervous system. When stimulated chronically, C-fibers release chemicals that cause pain and inflammation. ReN 1869 has completed five Phase I trials and will enter Phase II before the end of 2000.

ReNeuron was formed in 1997 around technology developed at the Institute of Psychiatry at the Maudsley Hospital, London. It received seed funding and first-round funding totaling #5 million from Merlin Ventures Ltd.