Tepnel to raise 5m pounds in USM launch

TEPNEL Diagnostics, a greenfield company developing a new product for detecting the Aids virus, is to be launched on the Unlisted Securities Market later this month.

The flotation is aimed at raising about pounds 5m via a share placing to fund its product development plans and will value the company at about pounds 25m on launch.

Tepnel is involved in medical diagnostics aimed at detecting contamination of food products as well as in blood, including HIV, the virus that leads to Aids.

Proceeds from the flotation are to be used for the commercial development of its disposable testing equipment for use by the food and medical industry. Much of the company's early research has already been completed but its products require further work before they can be marketed.

Although the company has yet to receive firm orders it believes there is a huge potential demand for its diagnostics devices.

Tepnel's development stems from a scientific breakthrough by researchers at the University of Manchester seven years ago. Since then the scientists have been funding their research partly with private investors.

The flotation is the latest of several medical research companies launched by Allied Provincial in the past few years. Its previous flotations in the sector include ML Laboratories, Haemocell and Proteus.

The broker has been actively marketing Tepnel to City institutions in the past few days. The launch is understood to have generated considerable interest from potential investors.

Earlier this year British Biotechnology joined the stock market via a pounds 152m flotation.