The funds will be used mainly to advance development of its proprietary electrostatic coating technology, LeQtracoat, which targets the oral drug delivery market, said Phoqus.
The UK firm has partnered this technology with pharmaceutical technology giant Cardinal Health, and part of the fundraising will go towards paying off a loan from Cardinal.
LeQtracoat is based on the same electrostatic deposition principle used in photocopying - but in this case it is applied to coating and loading of active drug compounds onto the surface of tablets for oral delivery.
It can also be used to coat tablets with complex images, allowing strong branding and serving as a safeguard against counterfeiting.
Andy Jones, chief executive of Phoqus, said the time was right for a placement as the company is poised to bring the technology to market and start to generate a sustainable royalty flow.
Phoqus already has four collaborations with leading pharmaceutical companies and a project with a major consumer products company for coating detergent tablets.
Several of these projects are now close to conversion to full-scale development and commercialisation, and Phoqus anticipates first product launches and royalties starting in 2007.
The firm is also funding the initial, in-house development of a modified release formulation of hydrocortisone for the treatment of congenital adrenal hyperplasia.
Last year, Cardinal Health signed an agreement giving it co-marketing rights to Phoqus' drug delivery and image systems in all major markets, and it will also provide commercial scale GMP manufacturing to Phoqus' collaboration partners.
External links to companies or organisations mentioned in thisstory: Phoqus Cardinal Health