A DRUGS company which had repeatedly raised money from shareholders to build up its Cramlington site has collapsed.
Angel Biotech went into administration yesterday after seeing debts grow as trade had struggled to keep pace with its investment.
Administrators had been in negotiations with two potential joint venture partners, however, these negotiations could not be concluded.
As a result, the directors took the decision that they had no option but to place the firms into administration.
KPMG is now trying to sell the business. Blair Nimmo, head of restructuring for KPMG in Scotland, said: “Angel Biotechnology and Angel Biomedical have worldwide reputations for the quality of their production facilities, understanding of global regulatory regimes, and being at the cutting-edge of pharmaceutical and biotechnological manufacturing.
“We are hopeful that the companies, and their employees, will have a positive future given their unrivalled credentials and quality of service.”
Both Angel Biotechnology and Angel Biomedical are based in Edinburgh but were launched in Cramlington and had been working up to relaunching in their former base.
The Alternative Investment Market- listed firm raised £1.9m from share holders in 2010, half of which went to improve the Cramlington facility. It then raised just over £1m in December 2011 and another £1m last March to further the project.
The company had cash-flow problems after business was slower than anticipated. It saw sales rise to £3.46m for the 15 months to the end of last March, compared with the preceding 12 months.
But it plunged into a £1.3m loss from a profit of £193,000 last year after ploughing more money into its Northumberland plant, which is three times the size of its Scottish facility and would have increased manufacturing capacity considerably. The company employed 42 people at its height but when it went into administration it had only 20 in Edinburgh and one each in Cramlington and Glasgow.
Executive chairman Dr Paul Harper had said the company’s resources had been at full stretch throughout its efforts to reopen Cramlington.
Last year he said: “The task of re-commissioning Cramlington, opening business development discussions with new clients who would use the manufacturing capability of that facility and latterly integrating a new business whilst maintaining full services to all our current clients has presented a considerable challenge.
The firms, which make and supply clinically-based bio-materials for global biotechnology and pharmaceutical companies, had been founded in Cramlington in 2001 but moved to Edinburgh in 2007.
Angel – which was named after the Angel of the North – blamed the non-emergence of a large US contract for its decision to close its Cramlington factory with the loss of around 50 jobs in 2007.
It had listed on the AIM market in 2005 but struggled to make money in the intervening period. It wasn’t until early 2011 that the company posted its first profit.
Angel originally opened after winning venture capital funding and grants, which included around £1m from regional development agency One North East.