YORK health-care business Avacta is moving its York laboratories to Thorp Arch in Wetherby next month as the business consolidates on one site.

Alastair Smith, chief executive of the company, which is listed on the AIM investment market, said the move would give it more space, and would be cheaper for the company, enabling it to expand.

Avacta, which develops technology to test pharmaceutical drugs in the early stages of development, currently employs 25 people at its laboratories on the Biocentre at York Science Park.

It employs a further 35 people in Thorp Arch, where it has its manufacturing, sales and administrative functions.

Mr Smith said the whole of the York operation would move to Thorp Arch next month, after they secured a deal with landlords for a larger unit they could modify and refurbish.

The move follows an announcement from Paragon Print and Packaging, which claimed it was moving out of York because it could not find alternative premises of the right kind and for the right price in the city.

Its current facility in Huntington Road is being sold by the landlords, after Paragon bought the labelling division of Sessions of York, which went into administration in April 2010, but not the building.

But city business champions have said it is not true that York does not have the right kind of accommodation for manufacturing businesses.

Susie Cawood, head of York and North Yorkshire Chamber, said: “We understand that there is suitable accommodation for such businesses in the city of York and we urge Paragon to reconsider their move.”

She also refuted claims by the company that prices in York were out of line with other areas.

She said: “York is a very competitive place to do business, and that’s not something we’re hearing at all.”

Mr Smith said Avacta was moving to Thorp Arch, which he still considered to be aligned with York if not in the city itself, because of its existing links and because it needed a blank canvas to provide for office, manufacturing and laboratory space. He said the firm initially chose to set up in York because of the Biocentre incubation facility at the Science Park.

He said: “It’s a good address and York has that momentum of Science City York and all the other things which Leeds and Bradford didn’t have at the time. York is a good spot for early-stage, high-tech scientific businesses and other businesses.”