Biotech couple to raise £10m with float of 'super bug' drugs company

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Neutec Pharma, a biotech company developing drugs to combat the "super bugs" that lurk in hospitals, is seeking to raise £10m by listing on AIM next month.

The company, which was formed in 1997 by a husband and wife team from the University of Manchester with the backing of the venture capitalists 3i, is expected to have a market capitalisation of just over £20m.

The flotation will value the 16 per cent stake owned by Professor James Burnie and his wife, Professor Ruth Matthew, at £3.2m. 3i's stake is 40 per cent.

Professor Burnie, NeuTec Pharma's chief executive, said the company was seeking money to help it fund further development of its two lead drugs Mycograb and Aurograb.

"Our products are designed to stop antibiotic resistant infections from killing people. A solution to this significant, unmet clinical need could result in tens of thousands of lives being saved every year across the word," said Professor Burnie.

Professor Burnie and Professor Matthew, the company's research and development director, are expected to retain their 16 per cent shareholding, while the University of Manchester will maintain its 14.5 per cent stake.

The company's portfolio centres on developing antibody-based therapeutic products designed to treat the super bugs that can infect and kill hospital patients, whose resistances are low. It does this by identifying naturally occurring protective antibodies from patients who have recovered from an infection and then developing these.

In the UK, at least 100,000 patients catch hospital-acquired infections, costing the NHS about £1bn a year. In the US, similar super bugs result in more than 2 million hospital-acquired infections and 100,000 related deaths, making it one of the country's top 10 killers.

Mycograb, which treats yeast infections, is currently in Phase II clinical trials, Aurograb is expected to enter Phase II trials later this year. Hoare Govett is acting as advisor and broker to NeuTec.