LONDON ¿ PPL Therapeutics plc has succeeded in a last-ditch attempt to raise money, announcing it has received ¿non-binding commitments¿ from investors to a discounted rights issue at 50 pence per share to raise #30 million (US$43.3 million).
The issue, which will be underwritten by Deutsche Bank, is priced at a 22 percent discount to the 64 pence closing price Aug. 30. The commitments are from institutional investors that are existing shareholders.
The company, which specializes in the production of human proteins in the milk of transgenic animals, was forced to pull out of a previous attempt at a rights issue to raise #45 million in March due to lack of interest. At that point the share price was above #1.20.
PPL could not put off the fund raising any longer both because it would have run out of money at the end of the year, and because the rights issue was one of the conditions specified by its partner Bayer Corp. when it agreed in July to provide security for a #15 million loan to build a manufacturing facility.
Ron James, PPL managing director, told BioWorld International, ¿I¿m relieved and, I suppose, pleased. We¿ve been edging toward this for so long; in some ways it is an anticlimax to finally sort it out.¿ Although the commitments are non-binding, James said he did not believe any of the shareholders would withdraw. ¿Normally you would not announce anything until the prospectus is issued but we needed to announce something before that because of rumors circulating that we would fail to raise the money.¿
At the end of June PPL had #6.1 million cash. However, in July it had to make a down payment on the manufacturing plant and increase staff levels in production, resulting in a substantial increase in cash burn, and leaving the company with just over #4 million at July 31.
James said the #30 million will be enough to get PPL, based in Edinburgh, Scotland, to the point where its lead product, alpha-1-antitrypisin, gets approval in 2005, and the building of the #42 million manufacturing plant will now go ahead.
The speculation on Bayer AG¿s future status following the worldwide withdrawal of its cholesterol-lowering drug LipoBay was causing uncertainty but no real concern. ¿AAT is a major part of the pipeline of [Bayer] Biologics in the U.S. and has the potential to be a significant product. The people we deal with may ultimately have different owners, but I don¿t think it will make any difference,¿ James said.