Stem Cell Sciences, the AIM-listed biotech firm, said yesterday it has licensed the use of its novel mouse neural stem (NS) cell technology to Merck, a big US-based pharmaceutical company, for research use.
Edinburgh-based Stem Cell did not disclose finan- cial terms, but they include a signing fee and milestone payments.
Stem Cell believes NS cells have potential broad research applications in the pharmaceutical industry.
Stem cells are cells that can divide to make copies of themselves, or change to become specialised cells of the body such as muscle cells, nerve cells or blood cells.
The cells and technology in the Merck deal will be supplied by Stem Cell Sciences from its newly-opened facility in Cambridge, where the group offers a range of ser-vices to the biotech and pharmaceutical industries through its SC Services business divsion.
The Cambridge laboratory has state of the art automated cell culture equipment, which enables SC Services to provides the capability for the routine growth of stem cells including NS cells in the numbers required for high-content drug screens and assays.
Commenting on the agreement, David Dodd, chairman of Stem Cell Sciences, said: "We're very pleased to see our mouse neural stem cells being licensed by Merck and others throughout the pharmaceutical industry.
"Our strategy includes working with key partners to expand the widespread use of stem cells in drug discovery."
The news was well received by the City. Navid Malik, an analyst with broker Collins Stewart, issued a positive note on the arrangement with Merck.
"This deal is an important early validation for Stem Cell Sciences' technology," he said.
"However, we believe that higher value deals will emerge as pharmaceutical companies sign up to using human neural stem cells within their laboratories."
Malik also said this area of the biotech technology "has significant growth potential in the future".
Investors welcomed the Stem Cell deal with Merck and who drove up the company's shares 1p to 47.5p in London dealing.
Stem Cell Sciences, a global biotechnology company, was established in Melbourne, Australia, in 1994. It provides products in the stem cell research and drug discovery markets, as well as the development of cell-based therapies for neurodegenerative disease and injury.
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