Food allergy diagnostic company Reacta Biotech secures GBP2.9m investment
A business that is aiming to transform the food allergy diagnostics market has secured GBP2.9 million investment in a funding round led by Praetura Ventures with follow-on equity investment from the Development Bank of Wales.
Reacta Biotech (Reacta), which is based in Deeside, North Wales, produces clinical diagnostics kits for food allergy testing. The business improves the efficiency, accuracy and safety of food allergy testing by producing pharmaceutical grade Oral Food Challenges (OFCs), the gold standard test for diagnosing food allergies.
In the latest funding round, GBP1.5 million came from Manchester-based Praetura Ventures, the venture capital fund manager that targets early-stage businesses in high-growth sectors. Having made an initial seed investment in 2019, the Development Bank of Wales will invest a further GBP1 million in equity funding. Other investors in the funding round include venture capitalist Jon Moulton’s family office, Perscitus and Reacta’s management team. The transaction was brokered by Reacta’s long-term advisers, Acceleris Capital, who have previously raised GBP4 million for the company since it was founded.
The business will use the funding to scale up the manufacture of its current product range including peanut, egg and milk OFCs and to extend its product portfolio. It will also expand its team of specialists and expedite work on enhanced packaging solutions. These activities will support the company in growing its portfolio of global pharmaceutical and biotech clients.
With an estimated 250 million people worldwide affected by food allergies, the global demand for allergy testing is rapidly accelerating. Despite this, the current methodologies for diagnosis and assessing treatment responses to food allergies are limited and often inaccurate. In the UK, more than 8.5 per cent of the population is thought to have a food allergy and those developing new treatments continue to push for improved diagnostics to support clinical trials and the roll-out of new therapies.
Whilst the principle of OFCs has been around for decades, Reacta’s product represents the first Pharmaceutical Grade, standardised, dose controlled, masked OFC available in the market.
The investment comes after a series of major growth milestones for Reacta that followed earlier investment from the Development Bank of Wales totalling GBP875,000 over the last two years. The company recently secured a multimillion-pound commercial contract with a top five global pharmaceutical company to supply the firm’s clinical trials over two years and, last month, the company gained Medicines and Healthcare Products Regulatory Agency (MHRA) approval to manufacture products to pharmaceutical standard (cGMP) at its site in North Wales.
Dr Paul Abrahams, Chief Executive Officer of Reacta, says: “It’s been a landmark year for Reacta, and we continue to go from strength-to-strength as a business, developing new diagnostic products and expanding our capabilities. The number of people experiencing food allergies is increasing, so it’s vital that technologies to accurately and safely test for allergies are developed. We’re committed to providing excellence in the development of a suite of OFC products, and revolutionising the way food allergies are diagnosed worldwide.”
Praetura Ventures has previously invested in healthcare businesses including innovative drug ‘switching’ company Maxwellia, Dr Fertility and Ostara Biomedical. The firm recently appointed four industry heavyweights as operational partners to bring significant experience to support the founders. The firm’s investment in Reacta was led by investment director Louise Chapman and director Dr Andy Round.
Round adds: “It’s great to be backing a business which is on track to have a significant and positive impact on society as well as returning significant funds for our investors. We look forward to supporting the team on the clinical contacts and customer side, as well as working with them on the strategy and marketing.”
Mike Bakewell and Oliver Wheatley of the Development Bank of Wales, says: “As a patient investor, we have backed Reacta with equity finance since 2019. Our continued support has enabled the business to develop their diagnostic products and expand their capabilities from their base here in North Wales. Importantly, they have now secured the specialist backing of Praetura Ventures, enabling the team to scale-up for further growth.”
Simon Thorn, Managing Director of Acceleris, says: “It is especially pleasing to see Reacta secure this investment which will allow the company to execute its ambitious growth plans. Having worked with the company since start-up, Reacta is now ideally placed in an expanding market to build on recent significant successes.”