BioWorld International Correspondent

Cellartis AB raised €8 million (US$9.5 million) to fund its human embryonic stem cell development programs and its international expansion.

Bio Fund Management Oy, of Helsinki, Finland, led the round, which takes the company's total investment to 15 million. Existing investors also participated.

With a repository of more than 30 unique embryonic cell lines, Gothenburg, Sweden-based Cellartis (formerly Cell Therapeutics Scandinavia AB) claims to be among the world leaders in the emerging field. Its commercialization strategy is based around applying its capabilities in handling and characterizing embryonic stem cell populations to the development of platform technologies to support drug discovery and toxicity testing during drug development.

Its most advanced programs involve the derivation of mature, functioning hepatocytes and cardiomyocytes from embryonic stem cell lines. Each would have applications in both drug discovery and development.

"It's very difficult to get hold of that kind of material," Cellartis Chief Operating Officer Johan Hyllner told BioWorld International. Corpses and biopsies remain the main sources of hepatocytes, for example.

The company still has to characterize fully the hepatocyte-like and cardiomyocyte-like cells it is generating.

"We still need to prove they are similar to adult functional cells," he said. It faces additional challenges in improving the purity and the yield of the final cell populations. "We get less than 50 percent yield, and we need to get quite a bit above 50 percent." It also needs to integrate this material with existing drug and toxicity screening hardware. Much of the work will involve further modifications to the cell culture protocols the company has developed. Cellartis is conducting the work internally and through collaboration with academic partners and with GE Healthcare subsidiary Amersham Biosciences AB, of Uppsala, Sweden.

The company aims to secure a partnership within two years, although the technology is not yet validated. "I think they need first of all to compare it with existing [drug and toxicity screening] systems," Hyllner said. "Collaboration with a drug company would help that."

The company is positioning itself as a platform technology play. Applying its stem cell expertise to regenerative medicine is not on the agenda at present. "That's not in our current business plan, but it's an opportunity we have to look into," Hyllner said. Cellartis is a participant in a 11.7 million project on beta cell therapy, funded by the European Commission's Sixth Framework Program.

It will use part of the recent cash injection to establish an overseas presence - for both R&D and business development purposes. The company has not yet determined the location, but several European countries, in addition to the UK, have adopted a more liberal regulatory stance on embryonic stem cell research. Hyllner identified Belgium, France and Switzerland as other potential candidates.