Spanish biotechnology company Cellerix is on the way of a big tie up with nearly ten of the major pharma companies of the country. The tie-up could lead to partnerships or even its eventual acquisition.

Cellerix, which is using adult stem cells to develop treatments for bowel disorder Crohn’s disease and other autoimmune illnesses, has put any plans for an initial public offering on hold until poor market sentiment improves.

The company, with a workforce of almost 50, last year raised 27.2 million euros ($42.7 million) in second round financing led by Life Sciences Partners, Ventech and Spain’s Ysios Asset Management and also by Swiss drug giants Roche Holding AG and Novartis AG. Bravo said it was almost certain the company would seek a third round through a specialist venture capital firm that would take it up to at least the end of clinical trials before its first product hit the shelves in 2010 or 2011, as an alternative to the shelved IPO.

Big pharmaceutical companies have largely shied away from embryonic stem cell research because of fierce opposition from religious and anti-abortion groups. Cellerix says its use of adult cells avoids the ethical minefield, while the use of fat is more productive and less painful than using bone marrow. The company is also conducting Phase II trials on a stem-cell treatment for Epidermolysis Bullosa, a rare genetic disease affecting just 1,600 children in Europe that causes the skin to blister and peel away. Spain’s biotech sector is small by European standards, Zeltia is the only drug maker listed on the Madrid bourse — but the sector hiked its R&D spend by 46 percent last year to 300 million euros, according to industry body Asebio.

Source: guardian.co.uk