StemMedical raising up to EUR 18m Series B for stem cell therapy platform

StemMedical, a Danish developer of a stem cell therapy platform for aesthetic and reconstructive surgery, is in the process of raising a Series B of EUR 15m–EUR 18m, CEO Klaus Langhoff-Roos said.

The company already has half of the capital committed, and aims to close the round in 3Q23-4Q23, the CEO said. It is ideally looking for life science investors, either life science VCs, or strategics in the plastic surgery or osteoarthritis space, he said.
90% of the raised funds will go to the European rollout of StemMedical’s stem cell platform in plastic surgery and its regulatory submission in the US, and 10% to its programme for osteoarthritis of the knee, Langhoff-Roos said.

The platform for plastic surgery is already being commercialised, has regulatory clearance in Northern Europe, and will launch this year in the UK, Norway and the Netherlands, the CEO said.

In plastic surgery, the unmet need that StemMedical is targeting is that there is no natural and effective filler so far on the market, according to Langhoff-Roos. Implants bring with them health risks, and conventional lipofilling is unreliable, with fat graft survival of 25%-80%, leading to a lack of outcome predictability and inconsistent results, according to a company document.
StemMedical’s plastic surgery product, Stemform, uses fat grafts enriched with fat-derived mesenchymal stem cells (MSCs) and shows 80% graft survival with a strong safety profile, according to the document.

The osteoarthritis product, Stemtreat, aims to reduce osteoarthritis of the knee with the anti-inflammatory properties of stem cells, Langhoff-Roos said. Several other companies have such solutions, but StemMedical’s method is to combine the stem cells with fat tissue, which should improve both the function and pain, he said. The fat tissue acts like a lubricant, and also creates a microenvironment for the stem cells, and stem cell doses 16 times higher can be used compared to its closest competitors, he said.
StemMedical is going into clinical trials with Stemtreat, with the first human dose planned for 4Q23, he said. It aims to collaborate with a large university to develop it further, he added.

To further develop Stemtreat, StemMedical will need to raise another EUR 20m from 2025, among other things to take it into Phase II trials, Langhoff-Roos said. It can do this either via another private capital raise, or by splitting the company and listing the plastic surgery arm, he said. This decision will come in 2024, when the company will decide whether to go into Phase II trials for Stemtreat, he said.
Exiting the plastic surgery arm via a sale is also an option, he continued. StemMedical is already in discussions with interested parties, and sees good appetite for the asset, but it is not pursuing a sale of the plastic surgery arm at the moment, as it wants to show commercialization ability in the market first, he said.
StemMedical projects sales of ca EUR 200m by 2030, and expects to become profitable in 2027, according to the company document.

It has identified seven or eight promising additional indications for its platform, but it wants to stay focused on the two current ones for the time being, the CEO said.

The company handles most advisory in-house, and has a strong advisory team, Langhoff-Roos said. Its chairman is the former CCO of Lundbeck [CPH:HLUN-A], and its advisors include a former CEO of Novartis Pharmaceuticals and a former CEO of Sandoz, he said. Langhoff-Roos himself has previously worked for Novo Nordisk [CPH:NOVO-B] for 18 years, where he was responsible for two blockbuster launches, he said.

StemMedical has raised a total of EUR 10m to date, of which EUR 5m in its Series A in 2020, Langhoff-Roos said. Its current owners are friends and family, other private individuals, and an Eastern European VC fund that participated in the Series A, he said.

by Christel Thunell in London, MergerMarket