ANGEL Biotechnology Holdings has seen its half-year losses hit £2.86 million, due to the cost of setting up a joint venture.

The biomaterials manufacturer, which operates from the Edinburgh Science Park and a larger site at Cramlington in Northumberland, reported revenue of £1.07m in the six months to September 30. More than £2m of the loss was attributed to a write-back of revenue and contract liabilities associated with the proposed formation of a joint venture with long-term customer Materia Medica Holdings (MMH).

Angel had announced it would be booking the loss last week.

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The deal, to make active antibody products for Russian firm MMH, was announced in October 2011, and was initially to be run from a dedicated space at Cramlington but there have been numerous delays.

The agreement is finally expected to be signed before the end of the month with the joint venture now at the Pentlands site.

Chairman Nicholas Smith said the business was also suffering because many current and prospective clients were seeing their funding restrained.

Staff numbers have been cut to 24 from 37 earlier in the year, and all non-essential spending pared back.

The company has changed its financial year so the most recent comparable half-year figures cover the period to June 30, 2011, when revenue was £1.4m and pre-tax loss £241,000.