Sigmoid Pharma, a Dublin-based drug developer, has raised €5 million in new investment from Canadian company Pendopharm.

The Irish firm, which is based at Invent, the Innovation and Enterprise Centre at Dublin City University, has also entered into an exclusive licence agreement with Pendopharm, a division of Pharmascience Inc, to commercialise its treatment for ulcerative colitis, or inflammation of the colon.

David Goodman, chief executive of Pharmascience, which employs 1,300 people, is joining the board of Sigmoid following the transaction.

Roderick Ryan, a director of Glen Dimplex, is also joining the board of the company where Martin Naughton, the founder of the electrical goods maker is an investor.

Sigmoid is chaired by Tom Lynch, former chief financial officer of Elan and current chairman of clinical trials company Icon.

Dr Ivan Coulter, founder and chief executive of Sigmoid, said the company had raised €25 million since it was founded in 2003. This year it has raised €10 million to support its expansion.

Sigmoid’s main focus, he said, was developing drugs to treat gastrointestinal diseases and it had developed a technology to deliver drugs effectively orally, where previously they had to be injected.

Dr Coulter said the global market for treating ulcerative colitis was $4 billion. He said he was excited about teaming up with Pendopharm as they had a very strong reach in Canada. He said the Irish company was also looking at expanding into the US.

Dr Coulter, a pharmacologist, said a stock market flotation for his business was “always a possibility” but it had no immediate plans to do so. “New investment allows us pick the time and the place as to what we will do,” he said.

Sigmoid Pharma was the inaugural winner of the Irish Times InterTradeIreland Innovation Awards in 2010.