Highland Venture Capital

The Board of Syntropharma are confident that this will be the first of many deals from their exciting product pipeline that will come to fruition over the next three years thus greatly increasing shareholder value. The Board also believes that to take a drug concept through to this agreement and FDA submission within 30 months confirms the robustness of their business model.

18 December 2009, Newtown St. Boswells, Scottish Borders:

Syntropharma, an emerging pharmaceutical company focussed on drug reformulation utilising transdermal delivery systems, announces a positive end to its year.

The company has just raised a further £400k from a rights issue with existing investors at Tricap, Highland Venture Capital, Scottish Enterprise Co-Investment Fund and Chimaerabio. This takes the total investment in the company to £2.1m. 

In 2009 the company has also successfully completed the clinical development of a transdermal patch for its lead compound that can be used for the treatment of depression and potentially Parkinsons Disease. The company is in the late stages of negotiation with a major distributor for the product in the US and when that is completed the application for the use of the patch for depression will be made to the FDA. 

This deal and the further development of at least 4 other products should create revenue for the business within the next 12 months and greatly increase shareholder value. 

Andrew Gardiner, CEO of Syntropharma said: “We are delighted with the company’s performance in this financial year and feel that we making excellent progress toward achieving our vision for the company, of developing a stream of first and second to market transdermal products with strong IP that will be out-licensed to pharmaceutical company partners. We would like to thank all of our investors for their continued support, and look forward to driving further commercialisation in 2010

A funding package totaling up to £700,000 has been agreed for Dumbarton-based Centeo Biosciences, which is about to launch its proprietary technology into the global life sciences sector.  The investment was led by Highland Venture Capital, the Inverness based business angel syndicate, with additional investment from TRI Cap business angel syndicate, LINC Scotland’s Investment Facilitation Programme, Upstarts Syndicate and Scottish Enterprise’s Co-Investment Fund.

Centeo has designed a hand-held portable thermal control unit, which allows test samples to be
exposed to multiple, controlled temperatures throughout the experiment protocol, saving time and increasing the accuracy of testing.  No similar product is currently on the market. The technology has been developed over the last four years by CEO Dr Gabriela Juarez-Martinez and Dr Philipp Steinmann, CTO, and is set to transform thermal control protocols in the pharmaceutical and academic research sectors, where more than £500 million is routinely committed to the research and launch of each new drug.

“This investment effectively enables Centeo to take its unit to market,” says Geoff Bush of Highland
Venture Capital.  “After many years of product development and market research, Centeo has created
product demand and it is envisaged the product will very quickly make a significant impact on the sector.”

Geoff Bush joins the board of Centeo to represent the interests of the investors Robert Dick, chairman of TRI Cap, commented: “Centeo’s product represents the realisation of many
years of research, development and commitment from the management team and TRI Cap members are
pleased to be contributing to this investment round, which will see Centeo move into production and sales.” CEO of Centeo, Dr Gabriela Juarez-Martinez, envisages manufacture will commence before the endof 2009: “This is a significant milestone for Centeo and one which we have anticipated keenly.  We are verygrateful to the investors, who have demonstrated their enthusiasm for the management team, our productand the future of the business, which I believe has the potential to make a global impact.”
Centeo’s automated equipment is currently designed for protein crystallisation but is also suitable for
other markets, and the company is working on a number of further developments to extend the technology’s applications.

Dundee-based corporate finance advisors DC Consulting worked with Centeo to construct and seal
the deal.

Business Angel group, Highland Venture Capital (HVC), has completed its first lead investment in partnership with Scottish Enterprise’s Scottish Co-investment Fund.

£600,000 has been committed as investment in newly formed Advanced Microwave Technologies Ltd, a company which has invented a system for treating, at source, blood waste from abattoirs which will potentially offer huge savings in waste disposal costs to a tight margin industry.

Regulatory authorities are already excited about this new process which also answers many environmental concerns. Inventor Yuriy Zadyraka has been working on this project for a number of years and the cash funding will mean that a full production machine can now be manufactured. This unit is scheduled to be tried and tested at an abattoir in Scotland later this year, with full commercial production anticipated to start in six to nine months.

Yuriy Zadyraka of AMT comments, “We are delighted to be working with HVC and have greatly appreciated the straight forward manner in which they have approached this deal. In particular we welcome the additions to the company’s new Board. The investors have brought in HVC’s Gregor Munro and David Mason as Chairman and Director respectively with Douglas Armstrong, who has considerable knowledge about technology-based business start-ups in the agricultural and food sector as Managing Director.

Iain Scott, Chairman of HVC, says, “We have been working with Douglas and Yuriy for over six months to develop the strategy, plans and funding structures for AMT. It is very pleasing to have this deal as our first”.

Neil Ross, head of investment funds for Scottish Enterprise, comments, “As Scotland’s enterprise, innovation and investment agency supporting business growth and developing the business environment, we have a major role to play in helping to increase Scotland’s investment activity.

“Access to investment is extremely important for young, dynamic Scottish companies, like Advanced Microwave Technologies Ltd, to accelerate its growth and expansion. Through the Scottish Co-investment Fund and our partners such as Highland Venture Capital we can help make this happen.”

Formed just over 12 months ago, Inverness-based Highland Venture Capital now has in excess of 30 members, with the majority based in the Highlands. Iain Scott, HVC’s Chairman, has seen the number grow rapidly. HVC members have already invested significant sums into companies in co-operation with other Scottish business angel groups.

The Scottish Co-investment Fund has recently been awarded £32 million, to be invested over the next seven years, through European Structural Funding. This funding, matched with £40 million from Scottish Enterprise, will mean young, cutting edge Scottish companies can access a £72 million equity investment fund for their development and growth.

HVC’s legal advisors Innes & Mackay Limited’s Director of Corporate and Commercial, Calum I Duncan, led the investment to legal completion. He states, “We are very pleased to have completed this deal for HVC and the Scottish Coinvestment Fund. It is significant both for HVC investors and for the Highland region generally that HVC has partnered with the Scottish Co-Investment Fund in this deal and we hope that future HVC investments will benefit from a similar approach.”

A Borders start-up company that has the potential to grow into a global pharmaceutical business has secured more than £1 million venture capital funding.

Syntropharma specialises in developing new ways of delivering drugs that help to reduce side effects and increase compliance amongst patients.

The company’s business model means that rather than investing millions of pounds in discovering new drug compounds, it aims to reformulate existing drugs which already have established global markets.

The company was founded by Andrew Gardiner and David McHoul in 2005 and quickly drew the attention of Scottish Enterprise Borders and the wider business community. Investors have been quick to recognise the potential of the model and the company has received backing from a consortium of investors including Borders-based angel syndicate Tweed Renaissance Investors Capital (TRI Cap), Highland Venture, Balmoral and Scottish Enterprise’s Scottish Co-Investment Fund.

Andrew Gardiner, chief executive officer of Syntropharma, says: “The traditional model of a pharmaceutical business is to invest huge amounts of money in researching and testing new drugs but this can take years and is very risky for investors. We recognise that there are lots of drugs currently available that could be improved by reformulation. This often significantly enhances their usefulness for both doctors and patients.”By focusing on these drugs, we are tapping into markets which are already established around the world but more importantly, we have a much quicker route to market. Our model means we can get products to market within three or four years as opposed to the more traditional model which takes around 12 years.”

He added: “Over the past year, we have been working on the feasibility of two new product lines. With the capital now in place, we can now progress to the first phase of clinical trials for these while also looking at the feasibility of other product lines using the same model.”Syntropharma won Scottish Enterprise (SE) Borders’ Business Idea Competition in February this year and won incubator space at SE Borders’ Ettrick Riverside centre. The company has also been working with the local enterprise company to support its research and development activity and make connections with the business, legal and investment communities.

Having secured its first round of funding, the company is now relocating to bigger premises at SE Borders’ Tweed Horizons Business Centre to enable it to continue its expansion plans. The company also hopes to recruit new staff particularly around marketing and business development.David Gass, chief executive of SE Borders, says: “Winning the Business Idea Competition was a key turning point in what has been a tremendously successful first year in business for Syntropharma and we are delighted that we have been able to play some role in its success.”The company has huge potential for explosive growth and is exactly the kind of company that Scottish Enterprise Borders is keen to work with to help diversify the local Borders economy and create higher value jobs for the local area.

Going forward, we want to encourage more life science start up companies to recognise the value of locating in the Borders, with high quality and affordable business accommodation, a high quality of life and still in such close proximity to the buoyant life sciences sector in Edinburgh and Midlothian.”Syntropharma has also strengthened its board with leading business and life sciences industry representatives. Sam Taylor from TRI Cap has become chairman while Richard Aird, also of TRI Cap, and Jim Reid, CEO of Aberdeen-based Haptogen have joined as non-executive directors along with David McHoul.

Robert Dick, chairman of TRI Cap, comments: “It gives us considerable satisfaction to have been able to take the lead in arranging the funding of Syntropharma. The founders have created a novel new pharmaceutical company with the potential to provide its shareholders with a worthwhile return on their investment.”