Mesenbio, a University of York spin-out firm that is developing a novel treatment for arthritis created from engineered human stem cells, has raised £1.4 million in an investment round co-led by Manchester-based DSW Ventures and early-stage investor NG Bio, alongside grant funding from Innovate UK.

The treatment will initially target rheumatoid arthritis, an autoimmune disease that impacts nearly half a million adults and children in the UK, causing debilitating joint pain and inflammation of the hands, knees, elbows, ankles and wrists.

Current therapies can ease pain and inflammation but — unlike Mesenbio’s therapies — lack the combined actions of reducing inflammation and protecting the tissue from further damage.

Mesenbio’s treatment is based on nano-sized messengers created from engineered human stem cells that not only curb inflammation but can kick-start the process of regenerating damaged tissue.

Mesenbio was founded by Professor Paul Genever and Dr David Kuntin and based on their work at the University of York’s Biomedical Research Institute.

The funding will enable them to create three new jobs, develop pilot manufacturing processes, carry out pre-clinical studies and prepare the regulatory dossier in readiness for clinical trials.

Genever said: “We have been developing this method of treatment for a decade now, with support from Versus Arthritis, and it has proved successful in laboratory tests, but the funding will allow us to move toward human clinical trials.

“Our research has focused on extracellular vesicles or EVs, which are nano-sized structures released from cells that have therapeutic properties.

“We have been able to engineer these structures from human stem cells to target its anti-inflammatory and tissue-regeneration capabilities, which is what you need to treat arthritis — the ability not only to take away the pain but also to repair the damage.”

Current uses of EVs rely on donor cells, but their effectiveness as a treatment can vary from patient to patient.

Engineering human stem cells allows scientists to enhance the characteristics of EVs that are most significant to arthritis treatment and produce them at scale in the laboratory.

Kuntin, CEO of Mesenbio, said: “This method and its scalability makes it much more likely we can create a drug that can be administered via injection that can not only halt the damage to tissue, but repair tissue and return the immune system to homeostatic levels.

“We know this works in a laboratory setting and this new funding will allow us to get to human trials in a reasonable timescale, so that we can look to the future of what this new therapeutic might mean for clinicians and crucially patients of this debilitating condition.”

Mesenbio, which is based at the university, becomes the twelfth company to join the DSW Ventures portfolio, and the first from its recently-launched Seed EIS fund.

Doug Quinn of DSW Ventures said: “Extracellular vesicles is an evolving technology and with the promising data generated by the team at Mesenbio, this funding enables further progress towards a treatment for what is a debilitating condition for so many people.”

Jason Goldstein, co-founder at NG Bio, said: “This is an exciting time in the search for therapies that can address tissue damage resulting from arthritic conditions.

“Mesenbio’s technology is uniquely placed to address this problem and we look forward to supporting this talented team on the next step in their journey.”

Lucy Donaldson, Director for Research and Health Intelligence at the charity Versus Arthritis, which has funded Mesenbio’s research, said: “Versus Arthritis is the biggest investor in arthritis research in the UK, changing lives through research, campaigning and support.

“We are pleased to have supported Mesenbio to allow them to move into the next developmental stage for important and necessary arthritis treatment, and will continue to fund research that aims to develop — and provide access to — the treatment people with arthritis need, with real hope of a cure in future.”

Weightmans LLP (legal) advised DSW Ventures and NGBio on the deal, with Taylor Wessing advising Mesenbio.