Newcells Biotech–SEVERAL: investment, 202402 financing round £2.35m from existing investors Mercia Ventures + Northstar Ventures

	Period	2024-02-14
	Money taker	Newcells Biotech Ltd.
	Money source	SEVERAL
	Product	venture capital
	Person	Simpson, Alex (Mercia 202402 at Mercia Ventures)
	Person 2	Buchan, Alex (Northstar Ventures 202102 Investment Director)

Newcells Biotech Ltd.. (2/14/24). "Press Release: Biotech Raises further £2.35m for Lab Models that Help Avoid Animal Testing".

Newcells Biotech – whose laboratory models are used in drug development and reduce reliance on animal testing - has raised a further £2.35m to boost its growth and help establish itself as a global leader in its field.

The Newcastle-based company has secured funding from existing investors including the North East Venture Fund, supported by the European Regional Development Fund and managed by Mercia Ventures, Mercia’s own funds and Northstar Ventures. It brings the total raised by the company to date to over £12m.

Newcells’ 3D models mimic processes within the body and are used by pharmaceutical companies worldwide to test the impact of their drugs, including their efficacy and safety. They provide robust data to support critical decisions, such as whether to continue development and commence human trials. The use of non-animal testing methods is likely to increase as a result of recent changes to the FDA guidance which recognise that they can be suitable replacements for animal testing.

Newcells currently offers models of the retina, kidney and lung and also provides specialist services to run customised tests. Customers include pharmaceutical companies which use its products for applications ranging from gene therapy efficacy to toxicity screening, and a major research consortium.

A spin-out from the University of Newcastle, Newcells was founded in 2015 by Dr Mike Nicholds and Professor Lyle Armstrong. The company, which employs a 49-strong team, increased revenue by 56% in the last financial year. The latest funding round will enable it to enhance its offering with the use of powerful imaging technology that will produce more data in a shorter time, and expand its marketing activity. The company plans to create 10 new jobs in the year ahead.

Dr Mike Nicholds, CEO, said: “The support from our investors has allowed us to grow the business to the point where we now work with over 100 customers internationally including large pharma and biotech companies. This latest investment will further enhance our technology and underpin our ability to continue our rapid growth.”

Mercia was investing from the North East Venture Fund and its Northern Venture Capital Trusts.

Alex Simpson of Mercia Ventures added: “By improving the models available to scientists, Newcells is not only helping pharma companies to avoid the use of animals but also to improve the efficiency of drug development and deliver new therapies to patients. The company is already recognised as a pioneer in its field and the latest funding will help it to establish itself as the market leader.”

Dr Alex Buchan, Investment Director at Northstar Ventures said: “From Northstar’s first investment in 2016 we have seen Newcells continue on its growth trajectory building a suite of assays for the biotech industry. We believe in the team’s ability to scale quickly as Newcells has evidenced real momentum selling into a global customers. This investment will help Newcells establish itself as a global leader in its field.”

-ENDS-

Press contacts - Mercia

Alison Dwyer
Head of Marketing & Communications
Mercia Asset Management PLC
+44 (0) 7464 480 137
alison.dwyer@mercia.co.uk

Pauline Rawsterne
PR Agent
Turquoise PR
+44 (0) 161 860 6063
+44 (0) 780 163 9816
pauline@turquoisepr.co.uk

About Mercia Ventures

Mercia Ventures is a proactive venture capital investor focused on being the first-choice partner for growth. Mercia Ventures makes equity investments of up to £10million across all sectors, with specialisms in Software, Consumer, Healthcare and Deep Tech.

Mercia Ventures is part of Mercia Asset Management PLC and sits alongside its wider private equity, debt and proprietary balance sheet capital operations. The Group has 11 offices in the UK and Mercia Ventures’ national footprint and 48 strong investment team draws on their experiences as founders, PhD scientists, software engineers, corporate financiers and management consultants to help our partner companies successfully achieve their ambitions. Mercia Asset Management PLC currently has c.£1.4billion of assets under management and, since its IPO in December 2014, has a portfolio of over 400 start-ups from pre-seed to Series B. Mercia Asset Management PLC is quoted on AIM with the epic "MERC".

The Group raises its own Venture Capital Trusts (VCTs) and Enterprise Investment Scheme (EIS) Funds and details about open offers can be found through Mercia’s website.

Mercia Asset Management PLC is quoted on AIM with the epic "MERC" and includes the following wholly owned subsidiaries -

> Mercia Fund Management Limited is authorised and regulated by the FCA under firm reference number 524856

> Enterprise Ventures Limited is authorised and regulated by the FCA under firm reference number 183363

> EV Business Loans Limited is authorised and regulated by the FCA under firm reference number 443560

www.mercia.co.uk

Press contacts – North East Fund

Sarah Banks
PR Account Director
T: 0191 261 4250
07879 493744
sarahb@gardiner-richardson.com

Kristen Watson
PR Account Executive
T: 0191 261 4250
M: 07718 065696
kristenw@gardiner-richardson.com

About The North East Fund

The North East Fund is a suite of five venture capital and loan funds which was established in April 2018, to invest £153m in around 600 North East businesses in the period to December 2024. The fund managers provide business development advice and investment finance to small and medium sized enterprises based in the seven Local Authority areas of North East England: Northumberland, North Tyneside, Newcastle, South Tyneside, Gateshead Sunderland and County Durham. The programme encourages investment in and the commercialisation of new technologies, including low carbon technologies, as well as stimulating new business creation, private investment and entrepreneurialism in the North East, with a view to creating over 2,500 new jobs. The North East Fund has overall responsibility for the programme, which is delivered through five separate funds, each managed by independent, FCA regulated fund managers. Details of these, and up to date information on the progress of the programme, is available on The North East Fund’s website: www.northeastfund.org

The North East Fund has been established with funding from the North East of England European Regional Development Fund programme, the European Investment Bank and from returns on previous North East based, publicly supported investment funds. It is jointly owned by the seven North East local authorities.

About the European Regional Development Fund

The North East Fund will receive up to £66,500,000 of funding from the England European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020. The Department for Levelling Up, Housing and Communities is the Managing Authority for European Regional Development Fund. Established by the European Union, the European Regional Development Fund helps local areas stimulate their economic development by investing in projects which will support innovation, businesses, create jobs and local community regenerations. For more information visit https://www.gov.uk/european-growth-funding.

About the European Investment Bank

The European Investment Bank (EIB) will lend up to £60,000,000 to the North East Fund programme. The European Investment Bank is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. For more information, visit: http://www.eib.org/about/index.htm

About Newcells Biotech Ltd

Newcells Biotech, a leading provider of in vitro tissue models, improves clinical translation and drug discovery enabling companies to progress their products into first in man. Combining expert know-how and extensive bioprocessing capabilities, Newcells‘ strength lies in the generation of predictive human in vitro data. Their unique approach enables a deeper understanding of how new drugs interact with specific tissues and provide key mechanistic insights relating to safety and efficacy of new therapeutic compounds. Based in Newcastle upon Tyne, Newcells Biotech offers an extensive range of products and services which are distributed worldwide. For more information, please visit the Newcells Biotech website at https://newcellsbiotech.co.uk/

About Northstar Ventures

Northstar Ventures is a venture capital and social investment firm based in the North East. We provide funding for innovative, scalable businesses and high impact social enterprises. We’ve been supporting entrepreneurs since 2004, seeking out strong teams with great ideas that will drive high growth, scalable businesses, and sustainable charities. As the North East’s leading early stage investor, we have invested over £100m into start-ups, early stage businesses and high impact social enterprises. Our investment managers have a wealth of experience supporting new and growing businesses and bring commercial and operational experience, PhDs and MBAs, international careers and even a micro-business or two.