Newcells Biotech – whose laboratory models help speed up drug development and reduce reliance on animal testing – has raised a further £1.2 million from existing investors Mercia Ventures, Northstar Ventures and North East Finance.
The funding will enable the Newcastle-based company to build its customer base and seek new partnerships with companies with complementary products to enhance its offering to customers.
It brings the total raised by the company to date to over £13m.
Newcells’ 3D models, which mimic tissues within the body, are used to test drugs under development and provide data to support key decisions on which drugs to progress into human trials.
They enable companies to bring drugs to market more quickly and at lower cost than using animal testing and have also proven to be better at predicting how a drug will behave in the human body. Newcells currently offers models of the retina, kidney and lung and also provides a service carrying out tests on customers’ behalf.
The use of advanced 3D models has attracted increasing interest after the US Food and Drug Administration (FDA) changed its rules two years ago, removing the requirement for new drugs to be tested on animals. Research has found that around 90% of drugs shown to be safe and effective in animals do not work as planned in humans, which is one reason for the high failure rate in drug development.
Newcells was founded in 2015 by Dr Mike Nicholds and Professor Lyle Armstrong as a spin-out from the University of Newcastle. It now employs 42 staff and serves pharmaceutical companies worldwide. As part of the latest funding round, the company has appointed Dr Mark Carnegie-Brown as Chair. Mark has over 30 years’ leadership experience in corporate and biotech environments within the pharma industry.
“We believe that providing better laboratory models enables a faster, more effective drug development process which in turn accelerates the delivery of new therapies to patients,” said Dr Nicholds.
“Newcells’ models have proven to predict how drugs interact with tissues and organs. We have seen an upturn in demand since the FDA removed the requirement for animal testing and expect the trend to continue as more companies rethink and adapt their processes.
“This latest funding demonstrates the continued confidence of our investors and will enable us to exploit the growing demand.”
The funding has come from Mercia Ventures’ Northern Venture Capital Trusts and three regional funds – the North East Venture Fund which is managed by Mercia, the North East Innovation Fund managed by Northstar Ventures and the Finance for Business North East Fund managed by North East Finance – which are all supported by the European Regional Development Fund.
Victoria Wiesener of Mercia Ventures added: “Newcells has a great product and a strong team, and has the potential to become a leader in its field. The past year has been tough for the pharmaceutical industry as economic uncertainty has affected investment, resulting in fewer drugs under development.
“Newcells has navigated the changing markets effectively, while also improving efficiency and strengthening its commercial team. It is now well positioned for growth as activity levels recover and more companies make the decision to move away from animal testing.”
Alex Buchan of Northstar Ventures added: “We have been closely involved with Newcells since its founding and are proud of their significant progress to date. Their products have evolved into industry-leading solutions, designed to streamline and optimise drug development.
“The quality of their client base and reputation in the industry underpins their enormous potential, which we believe is beginning to be realised.”
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