Recently launched Staffordshire biomedical firm Dermal Technology Laboratory says it is on course to beat its turnover targets thanks to big export order wins in Europe and the US.

The news comes as Ernst & Young predicted a continued appetite among big pharmaceutical firms for acquisitions of smaller biotech firms.

DTL, which was only established in the middle of last year, specialises in testing skin tissues as part of the safety testing of new and existing chemical and pharmaceutical products which come into contact with the skin.

After joining UK Trade & Investment's Passport to Export programme in September last year, the company has significantly boosted its export activity, which now represents over 25 per cent of its business.

DTL, whose clients are mostly large multinational chemical and pharmaceutical companies, now counts firms in Switzerland, the US, Ireland, Germany and Italy among its customer base and employs 11 scientific and technical staff at its site at Keele University Science and Business Park.

Its initial expectation was to reach a turnover of over £1 million by the end of its third year of trading but it is now on course to hit this figure by the end of its second year.

DTL has developed methodology that uses human skin tissue to measure the dermal absorption of drugs and chemicals. Data generated is used to predict the risk of adverse health effects such as allergies or illnesses from skin contact with chemicals such as cosmetics, perfumes and nicotine patches as well as industrial chemicals and pesticides.

Chairman, Professor Jon Heylings, praised UK Trade & Investment for helping access financial support to exhibit at an international dermatology conference in France in March.

"Through business leads gained at this event, and further help with marketing provided by Passport, we now have clients placing orders with us from Switzerland, the US, Ireland, Germany and Italy. They represent more than 25 per cent of our business this year."

International trade adviser Maggie Neale, based at the Southern Staffordshire office of the Chamber of Commerce in Fradley, said: "DTL is just the kind of company that helps the UK remain at the cutting edge of medical technology.

"The highest standards and a focused business strategy have ensured the company succeeds in this highly competitive market."

Separately, Ernst & Young predicted in its annual global biotechnology survey that big pharmaceutical companies' appetite for new products would continue to drive M&A in the biotech sector.

Large pharmaceutical companies whose patents are due to expire between now and 2012 are faced with losses of $67 billion (£34.4 billion) in annual drug revenues and are increasingly turning to acquisitions in the biotech sector to access new products.

"The bulk of the action, whether in the form of strategic alliances or M&As, will occur between pharmaceutical/mature biotech companies and innovative emerging companies," Ernst & Young said.