Leading UK stem cell company ReNeuron is planning a return to the stock market two years after it was removed from the market following a series of technical disappointments.
The company was able to raise £21 million when it was initially floated in 2000 and was valued at around £70 million, but in 2003 its owners bought back all the shares for just £3.6 million after technical problems in the lab saw the share value collapse. ReNeuron had developed a way of cloning stem cells, but its cells proved unstable, dividing too often and becoming impossible to control. Now it has developed and licensed technology that halts cell growth before implantation in humans.
'The research company of five years ago, with all its dreams and hopes, succumbed to technical difficulties and the problems of all biotechs in the post dot.com boom,' said Sir Christopher Evans, the biotechnology investor behind ReNeuron's parent company, Merlin Biosciences. 'But we stepped in and put our money where our mouth is, and this is a different company.'
This time around, ReNeuron's goals are more modest. It hopes to raise £10 million to fund its most promising treatment, for people who have been partially paralysed by a stroke. It is a condition that has no other hope of treatment. If investors are found, ReNeuron plans to begin human trials in about six months.
City investors remain sceptical. One told The Times: 'One of the reasons why ReNeuron was taken private was because any treatment derived from stem-cell technology is years away from the market. So what's changed?' Sir Christopher warns, however, that Britain would lose its lead in the race to develop new stem-cell treatments if the City fails to back his plans. He is threatening to move the company to the United States, where he says he has been approached by brokers to list the company on Nasdaq, the stock market for high-tech companies. 'If investors do not back this initial public offering, there'll be no going back. I will take this company to the US and we'll all be whistling the Star Spangled Banner by the end of next year' he said.
The US may be an attractive option for ReNeuron, since the three stem cell companies listed on Nasdaq - Aastrom Biosciences, Geron and Stem Cells Inc - range in value from $300 million (£169 million) to $480 million, even though they all make heavy losses and have little or no revenue. ReNeuron, by contrast, won't make it past £30 million.
ReNeuron's Scottish rivals, Stem Cell Sciences, also plans to raise £10 million through a stock market floatation, and is thought to be close to completing its fundraising, although it is not expected to have raised as much as it wanted. The resurgence of these two British companies may indicate a new optimism in the biotechnology field.