They released a major new version (Papers 3) just under a year ago. One of those 'fresh start' kinda releases; a re-think of what a reference app should be like, and substantially different from Papers 2. I still haven't upgraded because it doesn't do much more than Papers 2 did, but if you're coming to the product for the first time, it really is a great release. Highly recommended. Definitely the best Mac client out there, and they have a good iOS app too, along with solid Dropbox syncing. (Haven't tried their Windows version.)
I agree, Papers is great. I have been using it since the earliest version, both on my Mac and on my iPad. Neither has ever given me trouble.
When they started, the two founders were both still mainly post-docs at the Netherlands Cancer Institute [2], and that's what I remembered, reinforced by the copyright notice I mentioned above.
[1] http://www.papersapp.com/careers/
[2] https://web.archive.org/web/20070213053257/http://mekentosj....