E-Therapeutics, a biotechnology company spun out of Newcastle University, will try to buck the difficult market for initial public offerings with an offering on the Alternative Investment Market that will value it at up to £35m.
The company begins an investor road show this week to drum up interest with City investors.
E-Therapeutics has five drug candidates at the very early stages of development, but biotechnology companies are notoriously hard sells for investors. Given the spate of cancellations of major stock market flotations, including the $7.5bn ($3.7bn) offering of the Russian aluminium giant Rusal and the $2.5bn float of the miner Cunico Resources, it will be a hard sell.
The chief executive, Malcolm Young, was optimistic. He said: "So far it lookspretty good. We are focused on our own proprietary drugs, and we have five going into Phase 2 trials."
Among the afflictions the company is targeting are the hospital "superbug" MRSA, skin cancer, and asthma. However, all of its treatments are in early stage Phase 1 trials, meaning that it will be several years before they make it to market, if at all.
Most drug candidates fall down somewhere in the years-long testing process which is required before a treatment is deemed both efficacious and safe enough to be approved by regulators.
Mr Young said thate-Therapeutics had developed a computer-based drug discovery platform which makes the process much more efficient by predicting how target proteins will interact with candidate compounds. Such platforms are prized by the pharmaceuticals giants, which can spend up to a billion dollars in the course of a decade to bring a single product to market.
The company intends to use the cash from the offering to take its most advanced drug candidates through Phase 2, "proof-of-concept" trials, the point at which large drug companies become interested. It will also invest in further development of its technology platform and develop new drug candidates.
E-Therapeutics has raised £4m to date from organisations such as the Wellcome Trust and the Department for Business, Enterprise and Regulatory Reform, as well as private individuals. WH Ireland will handle the listing.