The 30 partners in the European Lead Factory plans to contribute at least 300,000 compounds and develop about 200,000 more compounds.

Other limited partners include state-backed European Investment Fund, Scottish Enterprise and the Strathclyde Pension Fund.

Newcastle University owns 6,744,000 shares, 4.9% of E-Therapeutics, currently.

For the transaction, the shares of the company are transferred to a new company with the investors partly guaranteed against loss.

Algenetix was incubated by Kapyon Ventures, which also has PhytaGro, the sister company of ZeaKal, in its portfolio and was set up by Han Chen, a former investment manager at Finistere.

The 30 partners in the European Lead Factory plans to contribute at least 300,000 compounds and develop about 200,000 more compounds.

He previously held the same role at Vela Systems, which sold to Autodesk last year, and Eleven Technologies, acquired by Trimble Navigation in 2006.