BioWorld International Correspondent

LONDON - Phoqus Group plc is to raise £10 (US$17.5 million) to £12 million in an initial public offering on the Alternative Investment Market to fund it to first revenues, expected in the next 18 to 24 months.

The company has four collaborations with pharmaceutical companies in which it is applying drug delivery technology to reformulating marketed drugs. The projects are close to completion, and Phoqus anticipates first product launches and royalties starting in 2007.

"We think now is the time to list, because we are not far away from commercialization of the technology. Our VCs have funded us over four rounds and over the next three to four years will want to realize their investments," Andy Jones, CEO, told BioWorld International.

"The market is receptive to companies that are not too far from profitability and that have solid technology, and we have had a very good reception."

Since its formation in 1998, Phoqus has raised £32 million, and the anticipated market capitalization is £55 million. The proceeds would be used to repay a trade loan to the company's contract manufacturing partner Cardinal Health Inc., and to fund in-house programs.

Phoqus has a range of methods for optimizing the release profile of active drug ingredients. Those include a fast-dissolving technology in which products disintegrate in the mouth in 10 to 20 seconds but are robust enough to be handled and packaged like conventional formulations, systems for predictable and reproducible controlled release and a way of combining incompatible products in a single tablet with a different release profile for each drug. The company has a technology that can be used to create novel images on tablets as an anti-counterfeiting measure, also.

One of Phoqus' partners is GlaxoSmithKline plc, of London, but Jones was not able to disclose the names of the others or the compounds they are working on. "Typically, we looking at products that are coming off patent, or reprofiling compounds for new indications," he said.

In addition, West Malling-based Phoqus is funding an in-house project, developing a modified-release formulation of hydrocortisone for the treatment of congenital adrenal hyperplasia. That is due to enter clinical trials within the next month. "We will probably need to do another trial after that and will then find a marketing partner," Jones said.

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