BioWorld International Correspondent
LONDON - PPL Therapeutics plc plans to raise £45 million (US$64 million) through an open offer and international offering of new ordinary shares, to expand its R&D activities and provide working capital until the launch of its lead product, expected in 2004.
The market in biotechnology stocks has been hit by the current economic downturn, but for PPL there is little choice on timing as it has less than a year of cash. Speaking at a press conference, CEO Ron James acknowledged that the markets are difficult, but said PPL's shareholders supported the move. "We wouldn't have launched this if we weren't confident of getting there," he said
"The fund raising has been flagged to the market for some time and investors know we need more money," James said. "They are saying they would rather we got on and raised this cash, rather than hang around." The offer is not being underwritten, so it is likely that the fund raising will be at a significant discount. The company, based in Edinburgh, Scotland, is currently marketing the offer and the price is expected to be announced on April 10.
James said the offer will widen the shareholder base. He is particularly keen to target specialist life sciences funds in mainland Europe. "There are a lot of funds in Europe looking for European biotechnology to invest in," he said.
PPL, which specializes in producing therapeutic proteins in the milk of transgenic animals, was forced to make significant cutbacks to conserve resources at the end of 1999. Since then it has found a partner, Bayer AG, for its lead product, alpha-1-antitrypsin (AAT) for the treatment of hereditary emphysema, and secured a £42 million funding package to build a manufacturing plant.
"We now see a route to profitability for AAT, and with the success of this joint venture will have the resources to get other products to market. Now we need to scale [R&D] back up again," James said.
PPL also said it won a US$3.1 million contract from DARPA, the U.S. defense research agency, to develop an "Immunocow." PPL will use the technology that produced Dolly the cloned sheep to produce transgenic cloned cows. These cows will be factories for human polyclonal antibodies against a range of biological warfare agents, such as anthrax and ebola. PPL will retain the rights to commercialize all nonmilitary applications of the technology.
The fund raising also will enable PPL to push ahead with its method of producing stem cells by reprogramming adult cells. Last month it said it had produced myocardial cells from stem cells, which had in turn been produced from adult bovine skin cells. The company has not given any details of the technique, but said it has the potential to work in human cells. The first project will be in the production of human islet cells to produce insulin in diabetics.