Stem cell pioneer to float on AIM

One of the UK's pioneering stem cell research companies is to float on AIM, raising up to £15m to invest in new technology that could help the search for cures for Parkinson's disease and epilepsy.

One of the UK's pioneering stem cell research companies is to float on AIM, raising up to £15m to invest in new technology that could help the search for cures for Parkinson's disease and epilepsy.

Stem Cell Sciences, a company founded in Australia more than a decade ago and now based in Edinburgh, supplies stem cells and the growth agents that can turn these "master cells" into other kinds of cells.

It has already sold its services and licences to its technology to a variety of large drug research companies including GlaxoSmithKline and Sanofi-Aventis of France.

Stem cell science holds out the prospect of allowing the human body to regenerate tissue that has been damaged by disease or by an accident.

Peter Mountford, the company's founder, said that fund managers had questioned whether drug discovery companies could make profits out of what remains very early-stage and difficult science, but that his company has revenues already from selling the services and technology.

"We can make all sorts of different cell types in the laboratory to sell to the pharmaceutical industry now so that they can develop new drugs," he said.

Stem Cell Sciences has hired Collins Stewart as advisers to raise £10m-£15m in a float that could value the loss-making company at between £30m and £40m after the new money. The shares are due to start trading on 4 July.

Michael Dexter, a former director of the Wellcome Trust, is the chairman of the company. Mr Mountford controls 22 per cent of the company, which includes a trust for the academics who have contributed to its scientific development.

The money raised will be used to build a new facility in Cambridge where it can speed the production of stem cell lines, and on establishing a new presence in the US. Many US states are vying to attract the company, Mr Mountford said, since Federal resistance to the use of stem cells from unwanted embryos has set back American progress in this scientific area.

The company is expected to announce the award of a significant US patent for its technology this week.

Stem Cell Sciences is also doing its own very early-stage drug research work, mainly funded by a European Union grant, focusing on Parkinson's disease and epilepsy.