BioWorld International Correspondent

LONDON - CellFactors plc said it is seeking to raise £8 million (US$12.4 million) through an offer to existing investors and institutions, to finance the development of Skeletex, its bone-repair product.

CellFactors CEO Iain Cubitt told BioWorld International, "We have started the process of raising the money. We are not going for classical venture capital but high-net-worth individuals. The whole area [of cell therapy] has captured the imagination and we've got a large shareholder base of private individuals who have said to us they want the chance to put in more money." The fund raising is expected to close in mid-August.

CellFactors, based in Cambridge, needs more money for the further development of Skeletex. The product is yet to be assessed in clinical trials, but Cubitt said the company is in discussions on licensing deals with a number of large orthopedic companies. "Skeletex is not in the clinic yet and people want to batter the door down. Because we have interest from several [potential licensees], I think we can get good value at an early stage," Cubitt said.

The company established a GMP manufacturing facility for Skeletex, which is not a cell line but a cartilage matrix containing a mixture of growth factors and other proteins that initiate the process of bone formation in humans. Cubitt said samples have been forwarded to potential licensees for testing.

In the orthopedic market, CellFactors does not intend to grant a broad license, but to license by applications, such as spinal fusion and coated prosthetics. The company is developing the product itself for dental applications and has a tie-up with Sheffield University, where one of the company's co-founders, Bradley Stringer, is based.

The fund raising also will allow CellFactors to advance the development of its second product, a cell line for the treatment of Parkinson's disease. "We want to keep Skeletex moving forward, and also get the Parkinson's product through to the same stage of development," Cubitt said.

Some of the money will be invested to investigate potential new products, for example, for treating diabetes. "There is a lot of potential there, but we have not yet decided to go into it."

How long the £8 million lasts will depend on how CellFactors fares in terms of doing corporate deals for Skeletex. The company also has income from its NeuCell immortal neural cell lines, which it sells for research purposes.

CellFactors was founded in 1997 by Stringer and George Foster of Cardiff University and has raised £4.2 million to date.