Oxford scientists set for flotation windfall

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Five Oxford University scientists are to become paper millionaires with the flotation of a company which genetically modifies zebra fish and fruit flies in the search for life-saving drugs.

Vastox, a spin-out from the university's chemistry department, is raising £15m with a placing and joining AIM with a market value of £45m.

The company has been partly funded by IP2IPO, the quoted technology incubator, which will own 12 per cent of Vastox. IP2IPO shares rose 12p to 680p after Vastox's announcement yesterday.

Genetically modified zebra fish and fruit flies, chosen because of their fast breeding cycle, are being used increasingly by companies in the drug discovery process as an alternative to using mammals, Vastox said.

Set up in 2003, the company aims to generate revenues from selling its services to big pharmaceuticals companies, and it is also doing early-stage trials of its own drugs.

Oxford University will hold 3 per cent of Vastox after flotation. The university's professor of organic chemistry, Steve Davies, is non-executive chairman with just under 20 per cent of the shares. And Professor Kay Davies, head of the department of human anatomy and genetics, is expected to have a stake worth about £5m.

The remaining members of the company's scientific board share a paper fortune of £4m.