LEADING ANGEL investor Nelson Gray foresees a funding boost for fledgling bio-tech companies in Scotland.

Gray, named European Angel Investor of the Year last month in Holland, is chair of two biotech start-ups, one in Edinburgh and one in Glasgow, and says large pharmaceutical players are now scooping up new companies earlier.

This could indicate there will be a rush to buy early-stage companies and more funding of Scottish scientists and clinicians to spin-out businesses.

Speaking from the US, he said:
"Fundamentally the change is that large and medium-sized pharmaceutical companies are looking to acquire new technologies and compounds with promise at a much earlier stage.

ONE of Scotland's leading angel investors, Nelson Gray, says a sea-change in funding will boost Scotland's fledgling bio-tech companies. Gray, who last month collected the title of European Angel Investor of the Year, in the Netherlands, is chairman of two fledgling Scottish biotechnology businesses - one in Edinburgh and one in Glasgow - and he says large pharma' companies are now scooping up life sciences companies at a much earlier stage.

While this is increasingly risky when it comes to unproven research, it could also signal a rush to buy up many of Scotland's early stage companies - and encourage more Scottish-based scientists and clinicians to set up spin-out businesses.

Speaking from the United States, Gray said: "Fundamentally the change is that large and medium size pharmaceutical companies are looking to acquire new technologies and compounds with promise' at a much earlier stage. I've been speaking to a number of
venture capitalists in America this week and there is increasing activity from pharma firms' investment funds."

He said: "Whereas before it was necessary to secure major sums of cash to push compounds on to Stage 1 and often Stage 2 clinical trials, pharma is now showing interest at a much earlier stage - even at the level of basic animal work data. Over the year, gaps in funding for the commercialisation of science have hindered many Scottish companies. The latest victim of the burn' on cash is Ardana, the listed Edinburgh based drug development company, which has run short of funding before getting its testosterone cream through full approval for the market.

Gray, chairman of ImmuniSolv in Edinburgh and Antoxis in Aberdeen, and currently investing in Atlas Genetics, a spin-out from Bath university, says Scotland can benefit by moving to lighter, virtual companies concentrating on developing intellectual property and data. "Such companies will be talking constantly to pharma companies from the earliest stage to mould their products to the needs of pharmaceutical companies."

He says more companies are asking Big Pharma globally what data they need. While this might increase the commercial opportunities for Scotland bio-industry sector the downside for Scotland is that fewer big listed companies are likely to emerge.

Barbara Blaney, director for the Bio-Industry in Scotland, says that Scotland continues to produce a number of exciting bio-technology and life science companies but that the intellectual property and the R&D ought to be built up and retained in Scotland.