Welsh drug delivery technology company Ocelus has raised a second round of £500,000 from Finance Wales and the Welsh Assembly, which will take it through to a larger venture capital round "within a year".

Finance Wales' venture capital arm invested £315,000, with £147,000 coming from the Welsh Assembly's Single Investment Fund. The deal followed a start-up round of £100,000 from the same sources in 2008.

The company, based in Newport, has created a drug delivery process that combines the best elements of the existing technologies for introducing a drug to the body. Single injections or implants are more painful, but effective, whereas microneedles or other poration technologies are relatively pain-free, but can only deliver small quantities of a drug.

Ocelus' technology, developed by Dr Andrew Kirby, is able to inject small particles into the skin simultaneously at "hundreds of sites per square centimetre", called micro-implants. Kirby, who has started two companies before, says the investment will enable the business to take the concept to more advanced prototypes and human skin testing as well as building Ocelus' infrastructure.

The data the company gleans over the next few months from testing will provide the proof of concept necessary to raise £3m to £5m in a venture capital round, which will in turn help Ocelus commercialise the technology by attracting the interest of multinational pharmaceutical companies.

Kirby described Finance Wales as a supportive but diligent investor. "We had to prove to them quite significantly that this product was going somewhere. The first bit of money was only £50,000, so this was substantially more and they're not a traditional life sciences VC. They were not just going to say ‘how much do you need?’."