Paul Capital injects £17.5m into ML Laboratories

US private equity firm Paul Capital is funding US clinical trials of Adept, a product manufactured by UK-based pharmaceutical business ML Laboratories

Paul Capital Partners, a buyer of private equity deals in the secondary market, is investing £17.5m in ML Laboratories. Part of the money, which is coming from its Royalty Acquisition Fund, will fund US clinical trials of Adept, a product for the reduction of surgical adhesions, which was launched in the UK earlier this year.

Paul Capital will receive a proportion of the royalty and revenue streams from Adept and two other ML products until 2010. The funding is being recognised on a revenue basis in ML's profit and loss account. The company’s current life sciences portfolio includes dialysis, respiratory, anticancer, antiviral and pain management products.

Stuart Sim, CEO of ML, hopes the transaction will enable the company to accelerate the entry of Adept into the US market, where he believes “it has the potential to become the leading product in a growing market due to its excellent safety profile, ease of use and price advantage”.

The Paul Capital Royalty Acquisition Fund was created expressly to provide cash flow and liquidity to owners of life science royalty interests including companies, universities, other research institutions and inventors. Since 1998 Paul Capital Partners and its affiliated entities have invested in or structured more than $275 million in royalty transactions.