AIM-listed biotech firm fails to raise rescue cash

A Company which promised to mass produce life-saving drugs from the eggs of genetically modified chickens is to shut down its operations after failing to raise rescue finance.

A Company which promised to mass produce life-saving drugs from the eggs of genetically modified chickens is to shut down its operations after failing to raise rescue finance.

TranXenoGen, which is listed on London's AIM, said yesterday that it is putting its laboratories in Massachusetts up for sale, putting down hundreds of GM hens and keeping only a skeleton staff of three to try to sell the rights to the company's science.

George Uveges, the president and chief executive, who laid himself off yesterday, said that while TranXenoGen had proved that drugs such as insulin could be produced inside chickens' eggs, it had failed to breed animals which expressed the necessary genes to produce drugs in commercial quantities.

"This is mother nature, a matter of working through and finding the ones that are the high expressors. It is like having an ancestor who is a red-head and working out which of the siblings in the crowd is going to be a red-head."

TranXenoGen, founded by Kim Tan, joins PPL Therapeutics, the company which cloned Dolly the sheep, on a long list of failed ventures in transgenics, the genetic modification of animals to produce biological drugs or organs for use in humans.

Keith Redpath, at the consultancy Wood Mackenzie, said: "When PPL and TranXenoGen were set up there were predictions flying around of a shortage of manufacturing capacity for biological drugs. Since then a lot of people have added capacity so the economics have shifted, while transgenics science has not advanced as fast as necessary."

TranXenoGen shares fell 63 per cent to 2.62p, as the company admitted it could not find the funds to continue its scientific work beyond August. Mr Uveges said: "We were talking to people up to last Friday but we needed to pull the trigger to be able to save the funds to market the assets."