The investors comprised Close, which supplied £1.5 million, venture capital firm Foursome Investments, Xceleron’s directors and its management.

The money raised will fund a move to a new site in the UK, a recruitment drive and expansion in Xceleron’s UK and US markets.

Xceleron, a spin-out from York University, develops and assesses drugs for the biotechnology and pharmaceutical sectors. It specialises in clinical and pre-clinical development, particularly testing drugs on humans. Based in York, the company suffered a loss after tax of £317,000 for year end July 2005.

Close and Foursome invested £2 million in Xceleron in April 2005. Since then, the number of employees at Xceleron has doubled and the company has established itself in the US.

Ed Lascelles, investment manager at Close, says: ‘We have been impressed by the progress of Xceleron since we invested. The company has grown substantially over the past 18 months.’