Materia Medica’s product portfolio includes anti-inflammatory drugs, sedatives and regulators of the urogenital system.

Angel executive chairman Paul Harper said: “The new agreement with Materia Medica is great news and will allow us to move back to Cramlington knowing that we have a strong pipeline of work.

“We are looking to tie up the legal side of the Cramlington move pretty soon as we need extra capacity to support our work.”

The company, which currently has around 28 staff, was helped to launch in the North East by a Government grant and was backed by a series of venture capital investments before floating on AIM in 2005.

The company blamed the non-emergence of a large US contract for its decision to close the Cramlington factory in 2007, which at the time employed around 50 staff, some of whom moved up to Scotland.

Gordon Sherriff, Angel's chief operating officer said: “Our relationship with Materia Medica continues to grow with this pricing agreement and we are delighted that they have committed to working with Angel for a further five years.

“The agreement provides both companies with predictability for the cost and value of the programs expected to come.

“For Angel this permits accurate planning for growth and for Materia Medica it provides cost of goods stability, essential for a pharma company entering regulated markets.

“This is a clear reflection of Materia Medica's confidence in Angel's manufacturing and regulatory capabilities in the advanced biologics arena.”