Angel’s fall fuels biotech’s return to market

Former Angel acting chief executive Stewart White launched Collbio in March. Picture: Getty

Former Angel acting chief executive Stewart White launched Collbio in March and bought Angel’s assets in Glasgow, including a plant previously owned by sausage skin maker Devro.

White gained backing for Collbio from Diagnostic Capital, a life sciences investment firm involving industry veteran David Evans, the chairman of Omega Diagnostics and a former chief executive at Axis-Shield.

Now White plans to sell Collbio to Aim-quoted Healthcare Investment Opportunities (HIO), another of Evans’s firms, which raised £4 million when it floated as a shell company in April.

HIO will buy Collbio for £7.1m, with the deal being structured as a reverse takeover under Alternative Investment Market rules. Collbio will then buy Collagen Solutions and will adopt Collagen Solutions as its new name.

White told The Scotsman: “The logic of the takeover makes a lot of sense – Collagen Solutions has built up a strong reputation for research and development, while Collbio has manufacturing capabilities.”

Collbio has a “handful” of workers, while Collagen Solutions has two members of staff.

“Collbio is a small-volume but high-value business, so we don’t employ a cast of thousands yet,” White said. “But we anticipate creating jobs.”

White is confident about returning to the stock market.

“HIO’s board, which will become Collbio’s and Collagen Solutions’ board, has the experience to make a success of being quoted on Aim,” White said.

Edinburgh-based Angel Biotechnology fell into administration in February, with Collbio buying its Glasgow assets while AB Biotechnology, which was set up by Angel and Russian customer Materia Medica last December, took over its plant at the Pentland science park.

Evans – who sold life sciences firm BBI Group for £84m in 2007 and Manchester-based diagnostics firm DXS for £80m in 2009 – will become the chairman of Collagen Solutions.

Malcolm Gillies, another industry veteran and former company secretary at Axis-Shield, will serve as a non-executive director at Collagen Solutions.

Evans added: “I was attracted to Collbio through a combination of Stewart White’s management skills and the demand in the market for its products.

“I was determined to do something positive after Angel went into administration. This is good news for Scotland’s life sciences industry and is due to the hard work of Stewart and Alex Clarkson at Diagnostic Capital.”

HIO shareholders will be asked to approve the deal at an extraordinary general meeting (EGM) on 27 December. If investors back the deal at the EGM, then Collagen Solutions will be readmitted to Aim on 2 January.

Scott Johnstone, chief executive of the Scottish Lifesciences Association trade body, said: “We have been delighted to support Stewart White over the past two years, as he managed the transition of what is now to be known as Collagen Solutions from its origins in Glasgow as Devro Medical, through its purchase by Angel Biotechnology and then its revival as Collbio.

“This is another example of how vibrant Scotland’s life sciences sector is at the moment. In 2011, right at the depth of the recession, it grew by 9 per cent, and many of our member companies had a very busy 2013.”