How Stem Cell Sciences tapped Japan's biobusiness bid

The foundations for Japan's first stem cell company were laid in 1994 when two scientists from different countries met at an institute tens of thousands of kilometres from their respective homes.

Dr Peter Mountford, now the CEO of Melbourne's Stem Cell Sciences, had just completed two years as the University of Edinburgh's inaugural stem cells post-doctoral student.

About to head back home to start up Stem Cell Sciences, Mountford passed the baton to Japanese pluripotent stem cell scientist Dr Hitoshi Niwa, and a strong professional relationship was formed.

Nearly eight years later, the two men and their distant alma mater have come together to create a unique trinity. Last month, Stem Cell Sciences announced a joint collaboration with private Japanese biopharmaceutical company Sosei to create Stem Cell Sciences KK.

The fledgling company, based within the sparkling new Kobe Frontier Medicine Precinct, is the third arm in the SCS's expanding global network.

With the Elsternwick-based Melbourne business covering off the local scene and the University of Edinburgh Centre for Genome Research providing exposure to the European biotech sector, the Japanese collaboration offers an important Asian connection.

Mountford has described the initiative as not only a means to his company's expansion, but also give it exposure to a country committed to developing its biotechnology industry.

"This is really the third step in the globalisation of Stem Cell Sciences," he said. "What we're doing is setting up the company in regions where there's outstanding scientific capability and a market for cell therapies.

"Now we are gathering technologies through these academic centres of excellence and commercial networks, and combining them in a global alliance that we can use to develop other technologies to deliver cell therapies."

Stem Cell Sciences has achieved some impressive coups since opening for business in 1994.

As well as commercialising work coming out of its subsidiary at the University of Edinburgh Centre for Genome Research, the Scottish connection enables the company to conduct therapeutic cloning research not allowed in Australia.

Just this year, Stem Cell Sciences secured worldwide rights to use therapeutic cloning technology developed at the Monash Institute for Reproduction and Development and the University of Melbourne's Centre for Animal Biotechnology.

The technology, known as cell nuclear replacement, and developed with the backing of Stem Cell Sciences, uses DNA taken for adult cells and injected into unfertilised eggs.

Prior to the egg starting to divide, the host nucleus is removed leaving just the donor nucleus. The cell is then allowed to divide to form the blastocyst from which embryonic stem cells can be isolated.

The technology, which will be studied further in Scotland, is expected to prove useful in generating new ES cell lines from people who are carriers of genetic disease.

In addition to the Edinburgh research, Stem Cell Sciences has also recently opened new commercial laboratories in Collingwood, Melbourne, to produce ES cells and derivative tissue.

In gaining a foothold in Japan, Mountford said the company would gain access to state-of-the-art basic stem cell research, as well as the advantages that came from dealing with a nation keen to accelerate its biotechnology industry.

He said the while Japan had a strong basic research tradition, its biotech sector was virtually nonexistent.

But federal and regional governments have been incredibly eager to remedy the situation, injecting millions of dollars into the creation of the medical precinct - situated on a man-made island in Osaka Bay - where Stem Cell Sciences KK will reside.

"Japan has watched as [SCS] has commercialised research from Edinburgh, and they very much want to take that step of commercialising scientific outcomes in Japan," Mountford said. "What they are trying to do is start a biotech industry in Japan."

He said this was being achieved through funding for 150 full-time, five-year academic positions, provided by RIKEN, Japan's equivalent to Australia's National Health and Medical Research Council.

Government contributions in the order of $US150 million have also been poured into the bench-to-bedside precinct, which comprises full GMP cell manufacturing capabilities and a yet-to-be-completed 65-bed clinical facility.

This facility, intended purely for frontier medical research use, is expected to be ready by the end of the year.

Also within the Kobe precinct is the Institute for Biomedical Innovation and Research, where Stem Cell Sciences' collaborative research is already underway under the leadership of Mountford's Edinburgh colleague Dr Niwa and the director of the RIKEN Centre of Developmental Biology and head of stem cell biology, Prof Shin-Ichi Nishikawa.

The Stem Cell Sciences KK team is initially expected to focus on establishing robust and fully defined cell culture systems for growth and differentiation. Mountford said that the collaboration provided Stem Cell Sciences with a unique strategic advantage, in that it would now have access to facilities that would take up to seven years to build from scratch in Australia.

And, perhaps more vitally, yet another strategic base for a company that appears set on evolving as rapidly as the science itself.