Cytopia (ASX:CYT) has sold its 22 per cent stake in unlisted Queensland biotech Xenome to Queensland Investment Corp (QIC) for more than AUD$3 million.

Meanwhile, Biotech Capital (ASX:BTC) principal Harry Karelis has confirmed that his fund is also looking to sell its 21 per cent stake in Xenome, and suggested that fellow investee Uniquest will also pull out of the company.

Cytopia's managing director and CEO, Dr Kevin Healey, said in a statement that the sale was consistent with Cytopia's new focus on drug discovery. He said the funds raised would allow Cytopia to accelerate a trial in which its CYT997 cancer drug is administered orally.

Healey said Cytopia had no immediate plans to sell its stake in listed company Alchemia (ASX:ACL), because it believed Alchemia had significant growth prospects.

The shareholder sell-off comes at the end of an eventful year at Xenome. Earlier this year, CEO Tony Evans resigned, leaving co-founder and head of research Dr Roger Drinkwater at the helm until a US-based CEO is hired. The US Food and Drug Administration has approved Xenome's Investigational New Drug application for its injectable drug for neuropathic pain, Xen2174.