Reacta Biotech has announced the completion of its largest funding round to date, involving £1.25m of equity finance – with further investment expected in the coming months.
Reacta is a Deeside-based biotechnology company producing diagnostic kits for food allergy.
Cases of food allergy and allergy-related hospitalisations continue to rise globally at an alarming rate.
Reacta’s core focus is to improve the diagnosis and management of allergies through the provision of a pharmaceutical grade Oral Food Challenge (OFC), the gold standard for the clinical testing of food allergy.
Current diagnostic methodologies for food allergies, including skin prick tests or measurement of specific IgE antibodies in blood samples, are innacurate.
They yield many false positive results and provide no measure of severity of an allergic reaction.
Oral Food Challenge is the gold standard for food allergy diagnosis, before the initiation of new long-term therapies, and for the assessment of treatment response.
The investment has been drawn down from existing investors, management, Moulton Goodies, Development Bank of Wales and Wigan-based Acceleris Capital.
The company has been advised by Acceleris Capital and Gateley.
The capital raised will be used to achieve the Medicines & Healthcare products Regulatory Agency (MHRA) approval of the company’s manufacturing facility in Deeside, North Wales.
Obtaining an MHRA site license – expected in the coming months – confers Pharma Good Manufacturing Practice (GMP) manufacturing status on Reacta, which, in turn, will allow the Company to begin production of larger volumes for product supply to highly-regulated markets.
By securing this license, the addressable market for the company will be significantly expanded.
Prof Ashley Woodcock, chairman of Reacta Biotech, said: “This investment is a significant step in the development of Reacta Biotech’s business. A combination of seeking our own MHRA approval and the recent FDA approval of the first specific food allergy therapy set to launch in the US soon, creates ideal timing for Reacta to become the only standardised and trusted OFC for all food allergy therapeutics.”
Simon Thorn, Acceleris managing director, said: “We are delighted to complete this transaction with the team at Reacta and the other existing shareholders.
“Reacta is on an upward curve and with the expected MHRA license, is in line to see significant expansion. This market has become increasingly apparent with the significant rise in global food allergy cases and the alarming increase in hospitalisations due to anaphylaxis.
“We are proud, as a firm, to work with such a leader in its field and a company that will make a huge difference to many peoples’ quality of life.”
Paul Abrahams, Reacta Biotech chief executive, said: “We are extremely pleased to announce our raise today and continue our positive progress towards becoming the only regulated oral food challenge diagnostic supplier in the market.
“Our business is addressing a significant unmet need for standardised, stable, accurate, palatable and fully blinded OFC’s. Obtaining MHRA accreditation is a key driver for our future growth and we are pleased that we now have the investment to support the future demand for our regulated product and build on our revenues and list of customers.”
Michael Bakewell, deputy fund manager who manages technology venture investments at the Development Bank of Wales said: “We’re very happy to have been able to continue our support for Reacta Biotech with a further round of equity co-investment.
“This funding comes at a time when we are seeing a lot of global interest in food allergy therapeutics, an area where Reacta are fast making a name for themselves.
“Getting an MHRA site license for their Deeside manufacturing facility is a great next step in their growth as a company.”