Press Releases

Intercytex raises £9 million venture capital funds to progress clinical programmes

(by Scottish Equity Partners, 21st March 2003)

Venture capital group Scottish Equity Partners (SEP) has concluded a new biotechnology investment deal to provide a total of £2 million to Intercytex, the UK’s first dedicated regenerative medicine business, which is developing pioneering new treatments for baldness, damaged skin tissue and kidney disease.

SEP investment director Brian Kerr commented “Intercytex has developed unique technology based on ground-breaking discoveries and it is led by an experienced management team. We believe it is well-placed to capitalise on global opportunities in regenerative medicine and that it fits well within our portfolio of pioneering biotechnology companies.”

Intercytex, which has offices in Manchester and also in Woburn, Boston (US), has raised a total of £9 million which it will receive in two tranches and as part of this funding arrangement SEP has invested an initial £1 million to be followed by a further £1 million later this year.

Intercytex, which was founded by Chief Executive Dr Paul Kemp in 1999, operates in the field of regenerative medicine whose objective is to repair or replace tissue and organ function lost during disease or trauma. It has a portfolio of clinical and research programmes of which the most advanced are focused on treatment of chronic skin wounds such as diabetic foot ulcers and pressure sores and hair loss.

Dr Kemp heads an experienced management team which includes Richard Moulson, Finance Director, a former investment banker who has worked with technology start-ups; Commercial Director Michael Leek who formerly worked in tissue engineering for Smith & Nephew; and Non-Executive Chairman Ian Kent who has chaired a number of successful biotechnology firms.

Dr Paul Kemp, Chief Executive of Intercytex, commented “The global market for regenerative technologies highlights a multi-billion dollar unmet clinical need. This fundraising is a clear endorsement of the potential presented by Intercytex' unique technologies and the world-class team of scientists driving our portfolio pipeline. We are delighted to welcome SEP as a new investor and look forward to working with them.”

ProtoDerm, the Company’s product for skin wounds, which is currently in patient trials, is being developed for a world market with sales potential estimated at $1.3 billion while TrichoCyte, the Company’s hair loss treatment, is aimed at a market with global sales of around $2.5 billion.

Hair loss affects approximately 40% of men and 20% of women aged fifty and over. Intercytex is pioneering novel methods for the treatment of dermal hair follicle cells, a method which differs radically from conventional hair transplants which involve uncomfortable surgical procedures and produce inconsistent results.

There are two principal treatment methods, the first involving a patient’s own tissue and the second involving transplanted tissue. In the first case, samples of hair follicular tissues are taken from a patient in a biopsy and hair-inductive cells are added before being administered to the patient via injection.

In the second case, hair-inductive cells taken from an FDA-approved (Food and Drug Administration) bank would be injected into a patient’s scalp. Intercytex, which plans to conduct patient trials of TrichoCyte in both the UK and United States, believes its technique creates the potential for large numbers of hair-generating cells to be expanded in tissue cultures.

Kerr said that SEP is seeking to make further investments in the biotechnology sector. He sees scope for fresh investment in high quality businesses despite the current downturn in the sector which has made fundraising difficult for many biotech players.