Glasgow life sciences pioneer gets £27 million including public money to fight IBS and liver cirrhosis

EnteroBiotix employs some 50 people and aims to transform the lives of patients suffering from a range of diseases by developing “best-in-class” microbiome medicines. It is carrying out clinical trials of drugs designed to prevent and treat chronic conditions such as irritable bowel syndrome (IBS). In 2022, the firm opened a 20,000-square-foot manufacturing lab in Bellshill, North Lanarkshire and has laboratory space at BioCity, next to the M8, where the company is creating a new facility to provide additional capacity.

The £27m financing - one of the single largest in Scotland’s life sciences sector for some time - includes new equity of £6m from the state-owned Scottish National Investment Bank (SNIB), £10m from other investors and around £11m of loan notes converting to equity.

EnteroBiotix will use the capital injection to progress key clinical trials that will add significantly to the quantity and quality of the data it gathers. The firm achieved a notable milestone this week when the first patient was dosed in a phase two clinical trial in the UK. The study will evaluate the company’s next-generation drug for the treatment of IBS, which comes as an easy-to-take capsule and is manufactured in Scotland.

The human body harbours ecosystems of micro-organisms, including bacteria and viruses, whose genomic potential and activity are known collectively as the “microbiome”. James McIlroy founded EnteroBiotix six years ago in Aberdeen with the vision of building one of the world’s leading microbiome drug development businesses.

Last year, the firm appointed former Merck executive Elmar Schnee as its executive chairman and strengthened its top team in the opening weeks of 2024 with the appointments of James Barnes as chief operating officer and Chris Lea as chief financial officer.

McIlroy, chief executive, said: “This funding is further endorsement of EnteroBiotix and our vision of creating treatments that can have a global impact. Our facilities across the Central Belt of Scotland are the most advanced of their kind in Europe. They ensure safe, high-quality and consistent in-house manufacturing.

“The support from the Scottish National Investment Bank means we can invest in our research and development programmes, our team and our facilities. Our long-term mission is to transform the standard of care for patients suffering from high unmet clinical needs associated with the gut microbiome. Scotland’s life sciences sector is a growing industry, and with the Bank’s backing we can also contribute to improving skills and enhancing knowledge,” he added.

Simon Comer, director of innovation at the Scottish National Investment Bank, said: “EnteroBiotix is a pioneering company that is helping put Scotland on the world map of life sciences. Its drug manufacturing technology aligns with the Bank’s mission of harnessing innovation.

“Our investment of £6m, as part of a larger total funding package, is a major step forward for the company as it accelerates the pace to develop treatments that will ultimately provide great relief to patients living with a range of conditions. We are proud to support this innovative company achieve its ambitions to deliver treatment to patients on a global scale.”

Established in 2017, EnteroBiotix is headquartered in Glasgow and also has operations in Aberdeen. The company has now raised in excess of £47m from investors, including ThairmBio, Kineticos Ventures, Scottish Enterprise Growth Equity and the SNIB. As part of the latest funding round, the SNIB invested alongside ThairmBio and Kineticos.

The Scottish National Investment Bank was formally launched by the then first minister, Nicola Sturgeon, in November 2020. It aims to use £2 billion of Scottish Government funding over its first decade to invest in businesses and projects which will help the country meet its net zero carbon target, tackle geographic inequalities and foster innovation in the country’s businesses.

There was some controversy in 2022 when it emerged that the former chief executive of the publicly-owned bank, Eilidh Mactaggart, had left with a payment of £117,500 instead of continuing to work her notice period. Mactaggart’s departure earlier in the year had come as a surprise with very few details given at the time. Critics accused the SNP of a cover-up saying ministers “tried to blur” what occurred at the SNIB.

The Bank has been active in recent months, backing several ventures focused on the green economy, climate change and life sciences. Earlier this week, it pumped £4m into Edinburgh-based Calcivis, which is behind patented technology that enables early detection of tooth decay. The biotechnology business secured a total of £5m in funding to support its cutting-edge dental system and sink its teeth into the US market. The other £1m was provided by IFS Maven Equity Finance, which is managed by Maven Capital Partners and is part of the Investment Fund for Scotland (IFS), delivered by the British Business Bank.

Paul Callaghan, investment director at the SNIB, said: “Calcivis is a shining example of how Scotland is leading the way in developing cutting-edge technology that improves our health and wellbeing. We are proud to help the company scale-up and enable its flagship product to reach international markets, creating jobs in Scotland.”

The Scottish Government has committed to capitalising the Bank with £2bn in its first ten years. Over time, as the initial investments are repaid, the SNIB will reinvest those funds in businesses and projects creating a “perpetual investment fund to support the Scottish economy in the long term”.

Scottish National Investment Bank: investing in people and the planet