LINCOLN – Neurotech Pharmaceuticals Inc., a biopharmaceutical company focused on the development of treatments for chronic eye diseases, is building a new manufacturing plant in Rhode Island with help from a creative financing deal cobbled together by state economic development officials.

The company – which grew out of the former CytoTherapeutics Inc., a Providence-based pharmaceutical startup – raised $35 million in a Series B financing in 2006 and was considering leaving Rhode Island to build a new office and manufacturing facility capable of mass producing drugs it hopes to bring to market in the next few years, said Ted Danse, the company’s president and CEO.

But officials at the R.I. Economic Development Corporation (R.I. EDC) stepped in and approved Neurotech for a $4 million financing deal that will enable the company to purchase new equipment, including two modular manufacturing suites, and expand into a new 27,000-square-foot facility at the Highland Corporate Park in Cumberland.

The manufacturing facility is anticipated to be in operation by the second quarter of 2008.

Currently, the company’s main operation is located in Lincoln and employs 21 professionals. In the next three years, the company anticipates it will increase its work force in Rhode Island to more than 100 employees.

“We are thrilled to expand our operations in Rhode Island. The State of Rhode Island’s leadership and our partners at the R.I. Economic Development Corporation have been very helpful in enabling us to initiate our expansion efforts,” Danse said. “We look forward in working with the state to continue our growth and development, and to further strengthen our R&D and manufacturing capacity in Rhode Island.”

Neurotech is currently conducting two Phase II/III clinical trials for the treatment of visual loss associated with retinitis pigmentosa, as well as a Phase II trial for the treatment of atrophic macular degeneration.

Looking to keep Neurotech in Rhode Island as the company expands, the EDC utilized two of the state’s longstanding but underutilized financing programs – the R.I. Industrial Facilities Corporation (R.I. IFC) and R.I. Industrial-Recreational Building Authority (IRBA) – said Saul Kaplan, executive director of the EDC.

“Supporting promising biotechnology companies like Neurotech is a winning strategy for Rhode Island and important to our effort to grow an innovation economy that produces good, higher wage jobs for our citizens,” Kaplan said. “Neurotech is an excellent example of how the public and private sectors can work together to help great companies grow.”

The announcement of a financing deal for Neurotech’s new facility comes on the heels of the EDC’s work in December to convince FM Global, Rhode Island’s largest private company based on revenue, to build a new $60 million headquarters in Johnston using a little-used state program to speed permitting of the project.

Neurotech is one of Rhode Island’s most promising biotech companies, with excellent management, a well-developed technology and encouraging results in clinical trials, said Richard G. Horan, senior managing director of the state-backed Slater Technology Fund, which made an early investment in the company.

“The company is in the vanguard of a next-generation biotechnology company, combining the power of recombinant biologics with elegant delivery systems to treat unmet clinical needs of considerable commercial value,” Horan said.

Neurotech Pharmaceuticals Inc. is a biotechnology company specializing in the development of sight-saving therapeutics for chronic retinal diseases. To learn more about Neurotech and its clinical studies, visit www.neurotechusa.com or www.RenoirRetinalStudies.com.