In a major setback for the life sciences industry of Scotland, the Edinburgh-based Angel Biotechnology has gone into administration.

Gary Fraser and Blair Nimmo from accountancy firm KPMG have been appointed as the administrators for the firm that warned in the previous month that it could run out of cash by the month of March if two partnership deals are not finalised. The company is involved in making antibodies, stem cells and viruses for clinical trials.

Angel Biotechnology was holding discussions with a consortium of international organisations for a strategic relationship but the discussions were terminated. The company was also looking form a joint venture with Russian company MMH but the proposal is now likely to be scrapped. The administration will also include subsidiary Angel Biomedical that manages a collagen manufacturing site in Glasgow.

Blair Nimmo, head of restructuring for KPMG in Scotland, said, "Angel Biotechnology and Angel Biomedical have worldwide reputations for the quality of their production facilities, understanding of global regulatory regimes, and being at the cutting edge of pharmaceutical and biotechnological manufacturing. We are hopeful that the companies, and their employees, will have a positive future given their unrivalled credentials and quality of service."

Angel chairman Nicholas Smith has expressed disappointment and sadness over the move. All the 22 staff members at the company have been retained in the process. KPMG is assessing the financial situation of the company and is looking for a suitable buyer.