The contract with Materia Medica, a Russia-based manufacturer of homeopathic drugs, is for process development and good manufacturing practice (GMP) production of polyclonal antibodies.

Materia Medica produces oral drugs, such as tablets, drops, and homeopathic granules, but recent successful development of a novel class of antibody-based therapeutics switched the priorities of the company to manufacturing of oral ultra-low doses of antibodies produced by homeopathic technology.

This could be just the beginning of a long-term relationship between the two companies as Gordon Sherriff, chief operating officer of Angel Biotech, revealed that discussions for a second contract were "at an advanced stage".

The deal, expected to be completed in six to nine months, is indeed just the first phase of an 18-month long contract, the company's chairman, Dr Paul Harper, told BioPharma-Reporter.com.

This latest contract comes just two weeks after the UK-based biomanufacturer announced its plans to sell its beleaguered facility in Cramlington, UK and to concentrate production on its other plant in Pentlands, Edinburgh. The Pentlands site is specialised in growing mammalian cells in culture, particularly stem cells.

While Angel has increased sales in 2006 by around 75 per cent, compared to the previous year, it has not been able to secure orders as quickly as anticipated for the Cramlington facility which was completed and licensed last year, the firm said last month.

The company said that the cost burden associated with that facility had become too large to support and, together with the delay in securing orders, had led to a decision to close the plant and concentrate on the Pentlands cGMP facility where there is a pipeline of business.

"Our Cramlington facility, which is a microbial fermentation facility, was not profitable and the bulk of our business is conducted at our Edinburgh plant so we decided to close it and put it up for sale," said Dr Harper.

"We are currently in discussion with a potential buyer and we expect to sell the facility in the next 6 to 12 months."

The company is confident the sale will be completed rapidly as there is shortage of GMP compliant microbial facilities in the UK, he added.

Dr Harper could not reveal the exact asking price for the Cramlington site, but said the company bought the plant for £3m and should expects to sell it for between £2m and £4m, although it is accepting any offers.

The company to use the proceeds to develop its Pentlands operations.