Diversys raises $20 million

Diversys has completed two agreements to secure a total of $20 million in new financing. MVM Limited, which provided seed funding to the British protein engineering company in December, has invested $3 million for a 5.9% equity stake. The company also announced a $17 million investment and research collaboration agreement, with Peptech, an Australian biotech group.

Founded in December 2000 by Dr Ian Tomlinson and Dr Greg Winter with the support of the Medical Research Council, Diversys is now valued at $51 million. The company is developing a range of platform technologies for the in vitro evolution and engineering of recombinant proteins.

The company has exclusive rights to technology developed at the Medical Research Council’s Laboratory of Molecular Biology (MRC-LMB). Using this technology the company will develop single domain antibody drug candidates, which may prove useful for blocking virus and bacterial infections. The new funding will also enable Diversys to expand its research base in Cambridge.

Robert Connelly, CEO of Diversys, said: “We believe that the research agreement with Peptech will be the first of many deals with pharmaceutical, diagnostic and proteomic companies based on our proprietary protein engineering technologies.”

Peptech will become Diversys’ largest shareholder subscribing to 33.6 per cent of the company’s capital in three tranches. Peptech will pay $3.5 million for the first tranche of 4,075,000 shares now. The second and third tranches, in one and two year’s time, will both be 2,037,500 shares for $1.75 million.

According to the research agreement, in which Peptech agrees to pay Diversys $10 million over three years, Diversys will devise and implement a research and development programme to meet four targets chosen by Peptech. Diversys will also collect royalties on product sales and Peptech is hoping to use the alliance to gain entry to international markets.

Stephen Kwik, managing director of Peptech, will join Diversys’ board and Dr Greg Winter will be appointed to Peptech’s board as a non-executive director.