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Spin-out’s £2 million fund-raising success

17 Awst 2007

A Cardiff University spin-out company, Q Chip, has raised more than £2M in investment funding for its pioneering drug delivery and DNA testing products.

The news follows the agreement in January between the University and investment company Biofusion to maximise the commercial potential of the University's cutting edge research. New research awards to the University have just passed £100M mark for the year for the first time.

As part of a the agreement, Biofusion received shareholdings in seven spin-out companies and the commercial development rights to all of the University’s world-leading research. The University received a ring-fenced £8.2M fund for investment in new business, approximately £17M in Biofusion shares and one-off and monthly payments to be re-invested directly in the protection of intellectual property.

Q Chip, a life sciences company based in Cardiff, will use the money raised in the latest funding round to speed up product development and to strengthen its sales and marketing. Biofusion, which acquired the University’s stake in Q Chip as part of the deal to develop the University’s intellectual property (IP), has invested a further £125,000 in the company. Other investors include Welsh business support organisation Finance Wales, which is funding Q Chip as part of a new collaboration with Biofusion.

Earlier this year, Q Chip launched its ReaX product portfolio – the first bead-based molecular reagents for the DNA testing market. ReaX simplifies a widely-used laboratory technique for tasks such as blood testing, diagnosis of disease and identification of genetic fingerprints. It improves reliability by eliminating basic handling errors, allows untrained laboratory staff to conduct accurate DNA testing and reduces the time involved in setting up analysis by up to 90 per cent.

Q Chip Chief Executive Officer Mark Barry said: "Q Chip already has strong management and board foundations in place. Now it has the currency to accelerate the development of our products and sales and marketing channels and add new production infrastructure."

Biofusion Chief Executive David Baynes said: "We were delighted when we acquired our position in Q chip at the time of our IP commercialisation deal with Cardiff University. Q Chip provides convincing evidence of the quality of investment propositions arising from its world-class research base.

"This deal represents the first of a number of investments where we expect to collaborate with Finance Wales. It clearly demonstrates the value of our relationship and the prospects for future wealth creation opportunities for the Welsh economy."

Finance Wales Director of Development Funding Steve Smith said: "Q Chip reflects Finance Wales’ commitment to investing in high growth, knowledge-based businesses and marks our first syndicated investment with Biofusion."

Q Chip was founded in 2003 and was recently listed in the Western Mail’s ‘Hot 100’ list of growing companies. Following the latest funding round, its new shareholders include Geneva-based angel investors group Forum des Entrepreneurs and London-based Sustainable Technology Fund.