The new venture has already created three jobs and this is likely to increase to five this year and possibly 10 next year.

Scottish Government skills and lifelong learning minister Keith Brown, who was taken on a tour of the SCILLS labs today, described the announcement as an “excellent investment” for the city’s — and Scotland’s — life sciences sector.

He said, “Our pioneering research and technology is globally renowned. We have a clear academic lead in this field.

“The Scottish Government is fully committed to growing this sector and maximising the talent.

“This is why we met our manifesto commitment and invested £10 million to establish a life sciences institute in Dundee, the SCILLS unit, and provided £3 million to support the recruitment of up to 100 new apprentices within the life sciences sector last year.

“The world-class talent, skills and technology within the SCILLS unit at the University of Dundee is undoubtedly a huge factor in this move.”

Mr Brown added it would have been good had a Scottish private equity company been willing to provide the £3 million funding that is coming from America but it was a case of changing the investment culture in this country.

SCILLS is directed by Sir Philip Cohen and concentrates on an emerging area of cell signalling called protein ubiquitylation, which is said to have great potential for the development of drugs to treat cancer, inflammatory diseases and autoimmune diseases.

The lab is the world’s first research unit dedicated to the study of protein ubiquitylation, which regulates almost all aspects of cell life.

Working with the Protein Ubiquitylation Unit of SCILLS, Ubiquigent will help the scientific community make discoveries that it is hoped will eventually lead to useful and valuable new drugs.

According to the terms of the agreement, Stemgent will handle initial marketing of Ubiquigent products in the US with marketing arrangements for Europe and the rest of the world to be announced in the near future.

Ubiquigent Ltd has established a base in SCILLS where the staff have been working closely with the Protein Production and Assay Development Team of SCILLS in preparation for the initial product launch.

The company intends to move to a purpose-built facility in Dundee during 2010.

Sir Philip Cohen said, “The initial aim of SCILLS has been to build up a critical mass of leading scientists researching the ubiquitin system.

“The longer-term aim is to attract new biotechnology companies to Scotland and to facilitate the development of improved drugs to treat diseases that target components of the ubiquitin system.

“It is therefore extremely exciting and most gratifying that Ubiquigent Ltd has been formed just one year after the launch of SCILLS, several years earlier than the predictions I made in my business plan!

“I would also like to thank the Scottish Government for providing the funding to set up SCILLS.”

Sir Philip said a different approach was being considered for the relationship between the University and Ubiquigent which he believed would benefit both.

He said, “We are looking to come up with a new model of nurturing small biotech companies so that they really fly.

“Technology transfer from us to them is very important and even if they are across the road, knowledge transfer isn’t as good.

“Maybe if we can get a new building here we might have one floor dedicated to nurturing small biotech companies who would have access to our services for a fee. I have the feeling that we could attract many more new companies if we could offer these facilities.”

The new venture will see Sir Philip working with Ubiquigent’s chief executive officer Ian Ratcliffe who previously played a role in helping establish the European division of Upstate in Dundee in 1999.

Mr Ratcliffe added, “This is a fascinating scientific field.”