Technology transfer company Imperial Innovations Group PLC (IVO.LN) Monday swung to a first-half pretax profit following the sale of one of its portfolio companies to Wyeth (WYE).

Imperial Innovations reported a pretax profit of GBP1.3 million for the six months to Jan. 31, compared with a loss of GBP3.1 million a year earlier. Revenue dipped to GBP2.4 million from GBP2.8 million, but Imperial booked a GBP2 million advance in the value of its investments, helped by the Thiakis sale, compared with a fall in the first half of fiscal 2007.

Wyeth bought Thiakis Ltd., a U.K. firm developing an experimental treatment for obesity, for up to GBP99.4 million in December 2008, assuming developmental milestones are met.

Imperial, which owned a 24% stake in Thiakis, received GBP2.9 million from the deal and stands to gain royalties from future sales of its drug if it proves successful in trials.

Small technology start-ups have found it tougher to raise money because venture capital - the source of most early stage seed funding - has had its own funding squeeze as investors look for less risky places to put their cash. Many venture capital funds have switched their focus to older companies that require cash to fund the later stages of bringing their technologies to market.

Susan Searle, Imperial Innovations' chief executive officer, told Dow Jones Newswires the company is benefiting from this funding gap, as nascent companies have fewer places to get start-up money from.

"It is a good time for us to invest at attractive prices," she said. The company had GBP42 million at the period-end to make new investments.

Imperial, which mostly commercializes technology developed at London's Imperial College, was part of a group of investors who invested GBP10 million in Nexeon Ltd., a company developing a new type of battery, in February. It also provided seed funding for Navion Pharma Ltd., which is developing cancer drugs; Cortexica Vision Systems Ltd., a company working on technology to improve brand awareness, and Smart Surgical Appliances Ltd., a medical device firm.

CEO Searle said the U.K. government's GBP750 million Strategic Investment Fund, which has been established to help fund technology companies, could be a useful extra source of money for Imperial's portfolio companies.

At 1134 GMT, shares in Imperial were flat at 335 pence, underperforming a slightly higher Alternative Investment Market, up 0.6%.

Company Web site: www.imperialinnovations.co.uk

-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; jason.douglas@dowjones.com

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