Angel Biotechnology up 20% on news of Russian joint venture

The Moscow-based drug developer, which is already Angel’s biggest client in terms of contract value, will fund the expansion of the Scottish firm’s new facility near Newcastle.

Angel has already begun work re-fitting the Cramlington site – which the company had used in the past before moving to Edinburgh in 2007 – but the Materia deal will mean more of the factory is brought back into use.

Chief executive Paul Harper signalled his commitment to keeping Angel’s head office in Scotland despite the focus on bringing its English site on line.

He told The Scotsman: “There’s no obvious benefit to moving the head office to Newcastle.

“In Edinburgh, we have a manufacturing site that’s small enough to respond quickly to research and development projects, whereas the Cramlington site is big enough for large-scale production.”

Harper said Angel would supply staff for the joint venture but that Materia would meet the cost of refitting the factory. He said the deal would still leave Angel free to diversify and bring in work from other clients.

Aim-quoted Angel has already completed five projects for Materia at about £1.5m each, while it has also carried out about 30 contracts for ReNeuron, the life-sciences firm that used Glasgow’s Southern General Hospital to carry out the world’s first stem cell clinical trials.

Harper added that Materia had already commissioned three projects on which Angel would begin work before passing them on to the joint venture. He expects a further seven contracts may follow within five years.

Angel makes products including stem cells, viruses and proteins for use in clinical trials for drugs and for commercial sale.

Daniel Stewart commenced coverage of Angel yesterday with a “buy” recommendation and a target price of 0.47p. Shares closed up 0.05p at 0.28p, having hit 0.31p earlier in the session, marking a 35 per cent rise.