Migraine cure scientists set to make pounds 10m

A group of eminent scientists who are working on an anti-migraine drug, were sitting on potential profits of almost pounds 10m yesterday after their fledgling medical research company made a spectacular debut on the stock market.

Though their company, Vanguard Medica, has never made a profit, or achieved a single sale, its shares soared to a massive premium within the first 15 minutes of trading on the stock market, valuing the company at pounds 150m.

Robert Mansfield who only joined the company four years ago, is set to be the biggest winner. As chief executive, his share options are worth pounds 4.5m.

Other directors who also stand to gain include a former Nobel prize winner, Sir John Vane. Sir David Jack, formerly head of research and development at Glaxo, and Dr Brimblecombe, former chairman of SmithKline Beecham research, also stand to make large gains.

The stock market listing represents a huge bonanza for the founders who set up the company with just pounds 250,000 in 1991.

But the group of "scientific elders", whose average age is over 60, are part of a rapidly developing phenomenon - the scientist turned entrepreneur. They are just the latest in a growing band of scientists, academics and laboratory-dwelling boffins to secure huge windfall gains from floating their bio-technology companies on the stock market.

The cause of the gold-rush is the growing popularity of bio-technology companies. These are small groups which concentrate on the research and development of ground-breaking new drugs and other medical treatments, rather than the manufacture and distribution of them. It is cheaper for the large drugs companies such as Glaxo Wellcome to collaborate with smaller research groups which specialise in certain areas, than undertake all the work themselves.

Vanguard is even more curious. It has only 24 employees and does not even undertake any research of its own. Its expertise lies in its experienced managers who "contract out" the research to other groups.

One City analyst said yesterday: "There are lots more of these companies that are going to come to the market to take advantage of the favourable conditions. In the past, people have not fully understood this sector but they are beginning to."

Only last week, two City University academics made a combined total of pounds 12m when they floated their company City Technology on the stock market. One of the founders, John Finbow, sold shares worth pounds 2m and retained a stake worth almost pounds 8m. The company has secured a niche in making gas sensors such as those which detect dangerous gases in coal mines.

The directors and backers of British Biotec, another research company, have made a fortune as the company's work on an anti-cancer drug has gathered pace. The co-founders, Keith McCullagh and Brian Richards, set up the company in 1986 but it is now worth almost pounds 1.8bn. This would take it into the FTSE-100 list of Britain's largest companies.

Professor Graham Rook and Dr John Stanford did not give up their academic jobs when the took their company, Stanford Rook, on to the stock market. they are now worth nearly pounds 8m each. Chris Evans is one of the most flamboyant of the new breed. He has created three "wonder companies" involved in scientific research, Chiroscience, Celsis and Toad and is working on others.

But in spite of the bonanza, some say the bio-technology boom is a bubble waiting to burst. As one analyst said: "The share prices on these stocks are very sensitive. It only takes one piece of bad news to send the price tumbling."