Stem Cell Sciences raises £6 million on AIM

Despite terrorist attacks in London last week, BioTech Capital (ASX:BTC) investee company Stem Cell Sciences has raised £6 million (approximately AUD$14 million) as part of its initial public offering and listing on London's Alternative Investment Market (AIM).

"We're pretty pleased. I think it's a reasonably big capital raising," said BioTech Capital managing director Harry Karelis. "You look at some of the other Aussie companies that have really pulled out of trying to raise money on AIM, we've managed to raise it, in a fairly hectic week."

The capital raising was conducted via UK brokers Collins Stewart, who will be retained as Stem Cell Sciences' nominated adviser (NOMAD) and broker.

The capital raised values the company at listing at £21 million (approximately AUD$50 million). The shares were placed at an issue price of £0.97.

It is expected that dealings in the company's ordinary shares will commence on AIM on July 18. Shares will be listed under the symbol STEM.

The capital raising will be used to fund Stem Cell Sciences' four business units. The first, SC Proven, will focus on direct sales of cell culture media -- liquid formulations to grow cells in the laboratory.

Karelis said that SC Proven is "in the short term selling our media to other users in the world, both in the mouse and human area" but "one day, down the track, it will be a spin off".

The second, SC Licensing, relates to the sub-licensing of Stem Cell Sciences intellectual property portfolio. "We're going to actively start to pursue people that are infringing on our IP in places like the US now that we've had some key patents actually granted in the US," said Karelis. "I guess that almost a pure profit income stream for us."

The third is SC Services, which will provide customised cells for research and drug discovery. "SC Services is the longest established part of the business where we're doing fee for service, co-development type deals with predominantly big pharma. In the last three to four years we've generated AUD$10 million revenue from that side of the business," said Karelis.

And fourthly, SC Therapy, will develop stem cells for therapeutic treatment of human degenerative disorders. "We're part of a very large consortium in Europe that's been funded to pursue these sorts of things and we have the commercialisation rights for much of that public funded research that comes out of it," said Karelis.

BioTech Capital holds 2.4 million shares in Stem Cell Sciences which it bought at an entry price of £0.50. These shares are now valued at approximately AUD$5.6 million compared to the cost price of AUD$3 million.

BioTech Capital's shares will be under mandatory exchange escrow for 12 months and the company retains a board seat on Stem Cell Sciences.