Drug company floats to finance expansion
Oct 8 2007 by Chris Knox, The Journal
ADRUG discovery company is to float on the stock exchange this month to fund its expansion and help reduce the risks associated with human testing.
Newcastle-based e-Therapeutics has announced that it will place its shares on the Alternative Investment Market (AIM) in order to raise an initial £3m to improve the speed and accuracy with which it tests new drugs.
The six-year-old business will be valued at £35m on its flotation at the end of this month.It has not yet established an opening share price.
The cash will go towards improving the firm’s computation systems biology machine, which tells scientists whether newly developed drugs are safe to test on people. The improvements will involve increasing the machine’s number of micro-processors from 50 to 250 to make it much faster. It will also make it more accurate and is thus likely to improve public confidence in drug testing following the Northwick Park disaster in 2005 when six volunteers suffered organ failure after they were given a drug which sent their immune systems into overdrive.
Professor Malcolm Young, chief executive at e-Theraputics, said: “We are doing everything in our capability to ensure that drugs tests on humans are as safe as possible. Volunteers are vital for the future of our industry and improvements to our main testing capabilities is a big step in convincing many that the vast majority of tests are safe. Nobody wants another Northwick.”
e-Therapeutics has previously made breakthroughs in the treatment of asthma, depression, cancer, cholesterol, diabetes and pain control and said in January that it had made a drug which could kill off the MRSA superbug.
It currently has an annual turnover of £1m but it said that it now hopes to be able to more than quadruple this figure over the next two years.
The company, which is based in Holland Park, will also use the proceeds of the float to increase its focus on a number of disorders which it believes have yet to be properly addressed by rival drug companies, including depression, high cholesterol and malignant melanomas.
The company raised a seven-figure sum from backers Katalyst Ventures, Novotech Investment and NorthStar Equity Investors (NSEI) to boost research earlier this year.
The company plans to set up offices in Vancouver to help expand its client base in the US and Canada. The company already has offices in China and India.
Prof Young said: “Our aim is to have the majority of drugs which address seemingly ‘incurable diseases’ to have been tested by us. Our worldwide expansion is very much part of this aim.”
e-Therapeutics was set-up in 2001 after Prof Young attracted more than £10m research funding from the Engineering and Physical Sciences while practising at Newcastle University. He said: “Newcastle has established itself as one of the global capitals of drug research. Our plans will increase the region’s importance even more.”
