Company sells part of operation

The Sheffield-based, Alternative Investment Market-listed company, which pioneered the development of needle free and automatic injection systems, says it wants to focus on developing its drug delivery division and is "considering its options for Eurocut."

Historically, most of the group's turnover has come from Eurocut, but the drug delivery division is growing in significance, says Medical House, which is gaining more than 750,000 by selling its insulin injector business to Dutch firm Diabetes Management International.

Medical House managing director David Urquhart says Eurocut, which was established in 1988 and employs around three quarters of the group's 100 staff, has been diversifying as its traditional market, supplying instruments to the worlds leading orthopaedic companies, has become tighter.

"Eurocut is getting more into the oil, gas, aerospace and subsea engineering markets; looking at other things it can do with its equipment," said Mr Urquhart.

"Eurocut and the drug delivery business are two separate businesses. At one time we ran them in parallel, but the businesses are completely different. Eurocut is a manufacturing business whereas the drug delivery business is more about design and development than manufacturing."

Medical House says it decided to sell the insulin injector business because it involved supplying products to private individuals, which was time consuming and outside its core area of activity.

Chairman Ian Townsend said: "We are delighted the disposal releases resources which can be used to build on the successes of our drug delivery division.

"These needle-free insulin injectors were the first drug delivery systems designed and manufactured by TMH and were instrumental in gaining a profile in the global drug delivery market. However, our business model is now focused on developing devices which we license to pharmaceutical company partners who then combine our technologies with their drug products to create competitive advantages.

"We continue to make progress on all aspects of this model and the level of activity on all fronts in the year just started is encouraging."

Diabetes Management International, based at Hoorn, on the Dutch coast to the north east of Amsterdam, will pay an additional 60,000 for stocks of Medical House's SQ-PEN needle-free insulin injector and a further 50,000 for help with making the injector for the next 12 months.

Medical House has given the Dutch firm an exclusive worldwide licence to use the SQ-PEN technology for the delivery of insulin to humans, but retains the right to supply the technology for use in other applications.

The price includes tooling for making the SQ-PEN products, valued at 356,000.