An Irish biotechnology company, backed by one of the world's leading authorities in a key area of science, is planning a flotation on London's Alternative Investment Market.
Eirx, based in Dublin, which is involved in the rush to cure diabetes, plans to raise up to £2 million.
The firm's chief executive, Dr Peter Daly, said this week he would soon begin a "roadshow", persuading investors to support the fledgling firm. Potential backers will hear that Eirx has already identified five biotechnology projects in the field of apoptosis, a growing area.
The firm begins a private placing this week, and will float some 50 per cent of its shares on the AIM in the second or third quarter of next year.
The company plans initially to buy the rights to five projects, each a series of molecules developed by scientists in several universities. Dr Daly said this first batch of projects has been chosen carefully, and should have a good chance of yielding a drug prototype that can be sold on to a major pharmaceutical company.
Initially, Eirx will not run its own labs, but will contract out the work to others on a piecemeal basis, while it retains all of the rights to the drug.
After about a year, Eirx plans to open its own labs, carrying out the previously-contracted work itself, Dr Daly said.
The company's main scientific clout comes from Prof Tom Cotter of University College, Cork. Head of the university's biochemistry department, Prof Cotter, is rated number nine in the world for professional citations in the area of apoptosis, and has been featured on the cover of the prestigious Science magazine.
"All biotechnology companies require a scientific advisory board," Dr Daly said. "We have also recruited a first-rate team of international scientists, comprising one Swede, one American and three British people. It adds credibility to the company that big names are associated with it."
At present, Prof Cotter owns 24 per cent, while Mr Nick Strong, the former financial director of Shell Ireland, owns 12 per cent. The remaining 64 per cent is owned by Dr Daly.
The company believes breakthroughs in the area of apoptosis could help diabetes. With 100 million sufferers throughout the world, 16 million of whom are in the US, any drug which combats the disease would be extremely lucrative.
Explaining the basis for the research, Dr Daly, a trained scientist, said that cells can die in two ways, necrosis and apoptosis. While necrosis involves the cells becoming inflamed, apoptosis means that the cells die in an orderly fashion by themselves, as if committing suicide.
Since 1990, there has been a boom in academic research into apoptosis, but the development of drugs lags behind. If the process of apoptosis can be halted or inhibited by drugs - for example in diabetes patients - they would not suffer the usual symptoms of the disease such as damage to internal organs.
The company targeted London's AIM market because a major proportion of all European bio-technology companies are based in Britain, and investors there are more accustomed to valuing such firms.
Dr Daly said he would not rule out trying to raise capital on Dublin's Developing Companies Market.
"Historically, Irish investors haven't gone for this sort of thing, but things are changing fast in Dublin, and we'll be talking to institutions here," he added.
