GENET archive


7-Business: PPL Therapeutics is for sale

genet-news mailing list

                                  PART I
-------------------------------- GENET-news -------------------------------

TITLE:  Dolly the sheep firm faces chop
SOURCE: Reuters
DATE:   Sep 15, 2003

------------------- archive: -------------------

Dolly the sheep firm faces chop

LONDON, England (Reuters) --PPL Therapeutics Plc, the Scottish biotech
firm that helped clone Dolly the sheep, put itself up for sale on Monday
after investors rejected its plans to develop a new surgical sealant
following earlier failures.

The move is a fresh blow to Europe's struggling biotech industry, which
has achieved only a fraction of the success of its U.S. counterpart, and
highlights the difficulty companies face in making money from scientific

PPL has been involved in several major biotech advances. As well as
cloning Dolly the sheep in 1996, it was the first firm to announce it had
cloned pigs capable of providing organs for humans and worked on stem
cells, which scientists believe can be coaxed into growing replacement organs.

But it came under fire from investors for spreading its interests too
widely and suffered a string of setbacks.

PPL said in June that German partner Bayer AG had decided to put on hold
the two firms' plans to develop a lung drug from the milk of genetically
modified sheep.

"That was unfortunate. But I think there's a feeling they tried to be all
things to all men rather than focusing on one project," said Keith
Redpath, an industry analyst at Panmure.

PPL said in a statement it did not have enough shareholder support to
continue developing its one remaining project, a surgical glue called
Fibrin I that stops bleeding.

Chief Executive Geoff Cook was stepping down immediately and KPMG
Corporate Finance would help with the sale, it added.

Hollow victory

PPL's break-up follows an extended period of financial uncertainty at
Dutch rival Pharming and the collapse of British biotech firms Bioglan
and Weston Medical.

Panmure's Redpath said European biotech firms were no more prone to
failure than U.S. rivals, but the industry seemed weaker because it
lacked success stories on the scale of U.S. firms such as Amgen and Genentech.

The biotech industry is younger in Europe than in the United States, and
so has been less resilient to -- and has had fewer resources to cope with
-- the plunge in investor confidence following the bursting of the
technology bubble in 2000.

"Potentially it (PPL) had some ground-breaking technology," said Paul
Scott from Willowdrive, a shareholder group that has campaigned for the
firm's sale since last year.

"But none of it was going to be commercially viable for at least 10
years, and it clearly didn't have funding to see that through to fruition."

Scott was pleased investors would finally get some money back from the
firm, but said it was probably too late to salvage much of its
technology, as any buyer was likely to be attracted by its cash reserves
rather than the remnants of the business.

"So much shareholder value has been frittered away and a substantial
number of jobs have been lost. I wouldn't describe it as a victory," he
told Reuters in a telephone interview.

PPL posted a net loss of 12.8 million pounds ($20.6 million) in the six
months to June 30 and said it had 11.4 million pounds of cash at that date.

Scott said he expected investors to salvage around six pence per share
from the sale of the company. At 0910 GMT, PPL's were 12 percent higher
at 5.75 pence, a far cry from their 1997 high of almost 460p.

                                  PART II
-------------------------------- GENET-news -------------------------------

TITLE:  Company That Cloned Sheep to Sell Assets and Shut Down
SOURCE: The New York Times, USA, by Heather Timmons
DATE:   Sep 15, 2003

------------------- archive: -------------------

Company That Cloned Sheep to Sell Assets and Shut Down

LONDON, Sept. 15 - Scotland's PPL Therapeutics, a spinoff of the Roslin
Institute that propelled the biotechnology industry into a new realm
seven years ago when it cloned a sheep named Dolly, said today that it
would sell its last assets and close.

The company said its chief executive, Geoff Cook, and four members of the
board would step down immediately.

Despite its major scientific advance, PPL Therapeutics was deficient in a
crucial area, analysts said. "Management, management, management," said
Erling Refsum, a biotechnology analyst at Nomura International in London.

"The technology they developed and envisioned is still the leading idea
in their field," Mr. Refsum said. "They just didn't have the commercial

>From a high in February 1997 after the announcement of Dolly's creation,
PPL's market value has declined 99 percent, to about 6 million or about
$9.6 million. The founder of PPL, Ron James, who took the company public
in 1996, resigned last year. Bayer of Germany pulled back from a joint
venture in June, and PPL has been embroiled all summer in a battle with

Metage Capital, a hedge fund, which owns more that 20 percent of the
company, spent months lobbying for a change in management.

But the new director that it backed left the company recently, without
explanation, after only a month on the board.

PPL said last month that it hoped to rework its business around a not-
yet-perfected technology called Fibrin I, a liquid tissue sealant
intended to stop bleeding during surgery.

But the company failed to win enough support for the idea.

"Although the majority of PPL's major institutional shareholders were
supportive of the sealants plan, the required level of support to go
forward was insufficient," PPL said today in a statement. "Hence, the
board is recommending an orderly sale of the business in order to
maximize the short-term value of its assets for the benefit of all

PPL also announced a net loss of 12.7 million ($20.4 million) for the
first six months of 2003, widening from a 5.4 million ($8.7 million)
loss for the first six months of 2002. At the end of August, the company
said it had 9.3 million in cash.

Among the company's assets are 6,500 sheep at farms in Scotland and New
Zealand. Many of the animals have been genetically altered and will
probably be destroyed. In addition to Fibrin, the company is also
expected to sell its recBSSL, a product for people who cannot digest fat.
Shareholders are expected to receive minimal returns from the closing.

Dolly, the sheep created in 1996 with cells taken from a frozen ewe, was
euthanized in February after a lung infection that might have been the
result of spending too much time inside. Dolly has been stuffed and is on
display at the Royal Museum in Edinburgh.


European NGO Network on Genetic Engineering

Hartmut MEYER (Mr)
Kleine Wiese 6
D - 38116 Braunschweig

phone:  +49-531-5168746
fax:    +49-531-5168747
mobile: +49-162-1054755
email:  coordination(at)