PPL moves to soothe shareholders' fears

PPL Therapeutics, the biotechnology company that cloned Dolly the sheep, sought to restore investor confidence in its prospects yesterday, underlining that it would continue to refocus on developing drugs from proteins.

The move followed last week's disappointing revelation that the launch of its most advanced drug, the emphysema treatment AAT, would be delayed until at least 2007.

Geoff Cook, the chief executive, said the group would concentrate on developing later phase drugs such as Fibrin, a wound sealant, and spin out its earlier phase research work. "It's impractical for a company of our size to do both things going forward," he said. The shares, which traded above 361p in 1996 when Dolly became the world's first cloned sheep, fell 0.5p to 38.5p, valuing the Scottish company at £47.5m.

PPL, which was criticised last year for rushing out announcements on cloned piglets to beat a rival, said it was already taking steps to refocus its business. Mr Cook said he hoped to reach an agreement on spinning out PPL's non-protein programmes, which include stem cells and xenotransplantation (using animal organs in human transplants), by the summer.

The division could go to ES Cell International, a Singapore-based human embryo research group, which is one of a number of companies in talks with PPL. Alan Colman, PPL's research director who is quitting after its decision to hive off the non-protein programmes, is to take up a post at ES Cell. Mr Cook said he hoped to get a combination of cash and equity for the research business.

PPL's pre-tax losses for the year to 31 December widened to £14,252 from £11,983 the year before on turnover up to £1m from £209,000 last time. The company said it was in talks with one company about using its existing manufacturing facility to make products for third parties. These revenues, along with £25m cash, are expected to fund PPL until it reaches profitability, not likely before 2007.

Mr Cook, while admitting that the future would continue to be challenging, said he had "every reason to be confident of success".