Diagnostic Capital to fund Angel management rescue

By DOMINIC JEFF
Published on 18/03/2013 00:00

LIFE science financier Diagnostic Capital is funding a management rescue of part of failed listed firm Angel Biotechnology.

The group has set up a new company, Collbio, together with former senior management team members Stewart White and Ross Andrews, and has bought the assets of Glasgow-based Angel Biomedical.

White said the standalone business, which was acquired by Angel in early 2012, had not been profitable as part of the larger firm but should become so with the “full attention” it would now get from management and the expertise provided by Diagnostic Capital.

From its site in Glasgow, which includes a number of “clean rooms”, Collbio will focus on manufacturing medical grade collagen components for the regenerative medicine, in-vitro diagnostics and medical device markets.

White, acting chief executive of Angel since October and head of Collbio, said: “The growing requirement for collagen worldwide as an established biomaterial across a wide range of therapeutic and diagnostic applications presents exciting opportunities.

“We have already secured our first major contract in the form of a supply agreement with US-based Cardium Therapeutics for the manufacture of formulated collagen. We are right at the start of this but hopefully there’s more good news to follow.”

Alex Clarkson, principal at Diagnostic Capital, said the underlying strength of the collagen business in particular had persuaded the investment group to get involved.

“With the new set-up and financing in place, we believe the business is extremely well placed to become a lead provider for customers in both established and growing markets,” he said.

The biomedical business employs three people and had been kept going by administrators since Edinburgh-based Angel’s collapse in February. Financial details of the buyout were not released.

Angel’s directors called in administrators from KPMG after rescue talks with a consortium of potential overseas partners were “terminated”.

The Aim-quoted firm’s shares were suspended, while all 22 staff were retained as administrators set about looking for a buyer. Angel had faced “trading difficulties” after taking longer than expected to secure the first contracts for its newly-reopened site near Newcastle, and had warned it was running out of cash as it sough investment of around £1 million.