LONDON (ShareCast) - Gene therapy specialist Oxford Biomedica has been awarded a significant grant to help improve its supply chain.

A UK consortium of companies won £7.7m of government funding in grants and loans, with the FTSE Fledgling company taking £7.1m of this as lead member.

The consortium has been awarded, subject to due diligence and final confirmation, a £2.4m grant, of which Oxford BioMedica will receive £1.8m, and a £5.3m loan to OXB repayable by March 2017.

Chief Executive Officer John Dawson said the award was given to the company in recognition of its potential to become a world-leader in Advanced Therapy Medicinal Product (ATMP) manufacture and supply chain expertise.

He said the funds will help the company, supported by the consortium, in its plans to develop its capability in serum-free, non-adherent manufacturing techniques and expand its proprietary manufacturing facility in Oxford to contain a third production suite and a state-of-the-art fill-and-finish operation.

OXB has estimated the overall cost of this project at £9.2m and said it expected it to take two years to complete.

"Not only is this project funding a fantastic outcome for Oxford BioMedica, which allows us to fulfil our potential as a world-class manufacturer, it also demonstrates the strong and growing demand for industrialising the development of gene-based therapies.”

Oxford BioMedica led the successful bid with four other UK participants: the Heart of England NHS Foundation, Cranfield University, Cell Therapy Catapult Ltd and Biotec Services International Ltd.

The funds were awarded by the Advanced Manufacturing Supply Chain Initiative (AMSCI), a joint project run by The Department for Business, Innovation and Skills (BIS), the Technology Strategy Board (TSB) and Birmingham City Council.

Michael Fallon, UK Business and Energy Minister said: "As part of our industrial strategy, we are working closely with industry through initiatives like the AMSCI to strengthen UK supply chains - supporting greater business collaboration, further investment in skills and the development of innovative technologies and processes.”

Shares in OXB were up 21.4% to 2.55p at 15:04 on Wednesday.

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