LONDON ¿ PPL Therapeutics plc secured a new funding package for a #42 million (US$58.8 million) manufacturing plant for its lead product alpha-1-antitrypsin (AAT) after its partner Bayer Corp. agreed to guarantee a #15 million bank loan.

The deal clears the way for the company to launch a ¿significant¿ rights issue sometime before the end of the year. The guarantee is conditional on the fund raising being successful. Bayer is getting 5 million PPL shares, together with a five-year warrant for a further 2.5 million shares at #1.20 per share.

PPL was forced to look again at the funding for the facility after Comdisco, a technology finance company, tried to change the terms of the #15 million equipment leasing deal it had agreed to with PPL.

PPL CEO Ron James told BioWorld International, ¿Every cloud has a silver lining. This new deal means we will need to raise #10 million less over the next five years to fund the plant.¿ PPL, based in Edinburgh, Scotland, could not have secured the more favorable terms the first time around because at that point it had not signed the agreement with Bayer ¿ which was itself conditional on securing finance for the facility.

James would not say exactly when the fund raising will be, or how much he hopes to raise, but he said he has only a small window because PPL will run out of money early next year. The company was forced to pull out of a #45 million share issue in April because of an unfavorable response. ¿In March the market was falling like a stone and there seemed no end in sight. I think the market has improved. It is still a bit shaky, but people have raised money,¿ he said.

PPL¿s shares closed at 83.5 pence when the agreement was announced last week. At the beginning of the year they were at #1.92.

PPL said that Bayer¿s willingness to provide the guarantee reinforces its commitment to AAT. There are no changes to the license agreement with Bayer.

Bayer is developing AAT for the treatment of hereditary emphysema, and in May reported positive results in the Phase I trial, delivering AAT with a novel inhalation system. PPL previously had carried out Phase II efficacy trials and a 12-center Phase III trial is due to start this quarter.