LONDON The company that cloned Dolly, PPL Therapeutics plc, underlined the poor state of the U.K. biotechnology sector when it announced a discounted rights issue to raise #20.4 million (US$34.2 million). Even with one of the most important developments in biotechnology to its credit, the company was forced to price the six-for-five issue of 27 million shares at #0.80, a discount of more than 30 percent on the Nov. 10 closing price of #1.20. PPL went public in June 1996 at #4.50 per share.

PPL, based in Edinburgh, Scotland, said the money will fund the further development of alpha-1-antitrypsin (AAT) for treating lung infections in cystic fibrosis patients; bile salt stimulated lipase for the treatment of impaired fat digestion in cystic fibrosis and pancreatitis; and Factor IX for treating hemophilia B. The company will also put some of the money toward an #8.4 million extension of the existing pilot scale plant, where pharmaceutical proteins are extracted from the milk of transgenic animals raised by the company.

The rights issue has been fully underwritten by BT Alex. Brown International, of London.

Ron James, managing director of PPL, said the group¿s ¿strengthened financial position after the funding will put it in a better position to exploit the commercial value of the products under development and enhance shareholder value.¿

Figures released by PPL in September showed that, as of June 30, the company had #12.6 million cash and a burn rate of #1.3 million per month. This left the company with funding for about nine months, and little choice but to launch a rights issue, despite market conditions. This is the third discounted rights issue, after Xenova Group plc and Therapeutic Antibodies Inc., in the past two months.

PPL¿s lead product, AAT, is in Phase IIc trials for the treatment of lung infections in cystic fibrosis patients. This trial is monitoring clinical outcomes as well as biochemical markers, with results due to be released by the end of the year. The FDA has granted the compound orphan drug status. The company is in discussions with potential partners and anticipates a launch in 2001.