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Aruna Licenses Mesenchymal Cells from UGa, Plans to Market Them for Research, Rx Apps

Aruna Biomedical announced this week that it has obtained an exclusive worldwide license from the University of Georgia Research Foundation to develop and sell human mesenchymal cells that university scientists derived from human embryonic stem cells.
Aruna will offer the hMSCs as adherent monolayer cultures in multiple turn-key kit formats for applications in basic and drug-discovery research, a company official told CBA News this week.  
The license will allow Aruna to develop and market human mesenchymal cells derived from human embryonic stem cells, a product that the company said has never before been available.
Steven Stice, founder, chairman, and chief scientific officer of Aruna, developed the technology in his lab at the University of Georgia, where he is a professor and director of the regenerative bioscience program.
“The science was developed in my academic lab at the University of Georgia, and the technology used and licensing agreement were very similar to what we did with UGa on our EnStem neural progenitor cell lines,” Stice said.
“We have a way to make mesenchymal cells from hESCs, and that means you have a limitless source from one particular genotype,” which is not possible with iPS cell-derived mesenchymal cells. He did not elaborate on that method.
Financial terms of the deal were not disclosed.
Stice and his group have also shown that they can “do a lot” with gene modifications, particularly with assays, and this would be important because researchers can introduce one or more reporter genes into a cell, depending on whether they want to multiplex or run single assays.
Aruna uses a proprietary technology to produce adherent monolayered populations of neural progenitors to avoid the heterogeneity resulting from current methods that use embryoid bodies and neurospheres (see CBA News, 4/4/08).

“We are not looking to be a cell therapy company or anything like that. We are focused on research tools and services.”

According to the company, the advantage of its technology “is that we can grow over 10 billion cells and basically plug them into existing assays, whether it is for cell survival or apoptosis. Really anything that you can do with adherent live cells, you can do with our cells,” Stice told CBA News at the time.
Aruna’s intent would be to offer the hMSCs directly through its web site, but also eventually through “a very small, select group of life science tools companies with global marketing, distribution and customer support capabilities,” said William Sharp, president and chief executive officer of Aruna.
Sharp declined to elaborate on these agreements, except to say that the company is in “late-stage negotiations on several of these deals and expect to successfully conclude these negotiations over the course of the next 30 days.”
He said it is likely that Aruna will be able to commercialize the hMSCs towards the end of this year or in early 2009 at the latest.
Sharp said that the global annual market value for its hMSCs as a research tool could be in the range of several hundred million dollars, but added that hMSCs “also have the potential for use in therapeutic areas in the future, so it is a little difficult to determine the actual size of the market.”
The primary customers for Aruna’s neural progenitor and mesenchymal cells are academic labs and biotech and pharmaceutical companies. Service providers also represent part of Aruna’s customer base, because pharmaceutical and biotech companies outsource much of their screening work to CROs and other contract manufacturers.
Bare Bones
“It often goes that you follow where the research will take you,” Stice said. The development of these hMSCs was an offshoot of Aruna’s adherent culture technology.
“We have the neural fate. We are trying to get towards a more mesoderm fate, giving rise to bone, muscle, and cartilage, and we were able to do that with this research,” Stice explained. He added that Aruna management believes that the market for mesenchymal cells is “out there right now.”
In March 2007, Aruna launched its EnStem neural progenitor cell lines, which are distributed by Millipore for research use only (see CBA News, 3/16/07). EnStem progenitor cell lines are derived from H9 hES stem cells because they are easier to work with than cells derived from embryoid bodies and neural spheres, Stice said. 
Both Stice and Sharp said that the EnStem cell lines are selling very well, although they did not elaborate. Sharp said that Millipore has been going through “typical consolidation and integration activities” after its Serologicals acquisition. That may have caused some “hiccups” initially, because Millipore acquired Serologicals in 2006, very shortly after Aruna and Serologicals launched the EnStem progenitor cell lines.
“However, over the course of the last several months, we have seen a nice uptick in their activity and customer purchases,” said Sharp.
At Your Service
Aruna, founded in 2003, is currently located in the Georgia BioBusiness center at the University of Georgia. “We are looking at increasing our space here within the center,” said Stice. “The purpose of that is really to have a dedicated lab for our services business, and some additional staff to man that, and some business development people to help market and sell the offering.”
Since April, Aruna has hired three business-development and lab/scientific staffers. The company currently employs 11 people.
Stice said Aruna plans to formally launch a service business in late September.  The company did an initial pilot project using its EnStem cells with what Sharp described as a “major” but undisclosed pharmaceutical company. He said that effort yielded “excellent” data.
“Our intent is to offer a services business, and then, perhaps — although nothing is obviously signed at this point — we would engage one or two select service providers who have broad-based capabilities and the appropriate infrastructure … to achieve rapid uptake of [our EnStem progenitor cell lines] from a service perspective, while we are augmenting this with our own capabilities,” Sharp said.
“The beauty of Aruna is that we are resident within the university and the BioBusiness Center, but … the IP that was developed came out of [Stice’s] lab,” Sharp explained. According to Sharp, at any given time, Stice has a dozen or so PhD candidates and postdocs as part of his academic endeavors at UGa, so, as Sharp put it, “It’s a great talent pool for us to leverage as a company.”
“As I look into 2009 and beyond, it is my expectation that we will continue to develop our resources commensurate with the scale of our revenues and our business, and the number of products we will be producing,” he said.
He said Aruna is always looking for opportunities to leverage complementary products, technologies, and capabilities, and from a business perspective, it is “looking at other stem cell technologies that we could leverage through our own capabilities.”
Many opportunities exist to license new technologies from UGa as well as other institutions. Many opportunities also exist to look at complementary technologies and products that would enhance Aruna’s offerings to its customers and streamline its workflow. “Our objective is to stay on the path that we are on, and not so much deviate as establish a strong position in and play in a big, evolving area,” Sharp said. 
“We are not looking to be a cell therapy company or anything like that. We are focused on research tools and services,” said Stice.  

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