LONDON - The company that cloned Dolly the sheep, PPL Therapeutics plc, of Edinburgh, is cutting its staff by 36 percent - from about 220 to 140 - and suspending or discontinuing activities not connected to its four major projects.

Ron James, managing director, said that for a variety of unconnected reasons key events "have taken longer to come to fruition than had been anticipated." In particular, discussions with a potential marketing partner for the company's lead product, alpha-1-antitrypsin (AAT) for the treatment of cystic fibrosis, ceased abruptly at a late stage of negotiations.

Most of the job cuts will be in milking and flock management at the company's site in Scotland, but there will also be some rationalization in R&D and administration. The overall effect will be to cut cash burn by one-third. For the six months ended June 30 cash burn was #7.9 million (US$12.8 million), and the company had #17.9 million cash at the end of the period.

Among the projects which will be scrapped is Factor IX for the treatment of hemophilia B. Although the company has raised transgenic sheep, the low levels of the protein expressed in their milk had made economics untenable.

PPL is still hoping to find a marketing partner for AAT. It has stockpiled a substantial quantity of the protein for future trials and said there is interest from several potential partners. The company is also seeking partners for its fibrinogen wound-sealing project, and for bile salt stimulated lipase (BSSL), an orally active protein that breaks down fats, in the treatment of pancreatitis.

The company had hoped to market BSSL as a natural food supplement, but following discussions with regulatory advisers, PPL said it will be treating it as an ethical pharmaceutical. It has approval for a Phase II trial in Belgium in the treatment of adult reformed alcoholics, expected to start this month.

In addition, PPL said its xenotransplantation program has reached the stage where it could be spun out as a separate business unit, partly owned by PPL, or partnered. Both options are being explored.