These GM piggies are off to market

PPL Therapeutics wants £20m to fund research into animal organ transplants

Five little genetically engineered pigs were born on Christmas Day. But the gifts they require are not gold, frankincense and myrrh, but £20m of finance to develop their potential to help humans stop rejecting organ transplants. That is the amount PPL Therapeutics, the biotech group that bred the piglets, is seeking in order to develop the xenotransplantation treatment the piglet-breeding will hopefully lead to.

Each piglet had a gene removed – or knocked out, in medical vernacular – which is thought to be responsible for making the animals' organs visible to the human immune system. If this is correct, then the potential for animal organs being transplanted to humans will be greatly increased.

Ron James, PPL's managing director, has said that now the piglets have been successfully bred, the group will spin the technology out into a separate company and try to raise £20m. This will fund the development of treatments up to the point when they could be tested on humans, at which stage the costs soar.

"We are looking for partners rather than selling the technology," Mr James told The Independent on Sunday. "There are two ways of spinning it out – either getting a complementary entity, someone involved in xenotransplantation or a big pharmaceutical group that wants to get into this area, or the alternative, venture capital money."

Mr James said dealing with drug companies was preferable because they demand less of their partners and have complementary skills, but that venture capital money was more likely. The pig-breeding has already brought controversy to PPL. Immerge Biotherapeutics, a US rival backed by Swiss drugs giant Novartis, has also bred "knocked-out" pigs but had not released any information about its work because it wanted the research to be independently ratified. Mr James rejected suggestions that PPL rushed out information about its piglets to scoop Immerge. "PPL is a quoted company," he said. "Under the listing rules we have to tell our shareholders anything price-sensitive. We will publish our work in a peer-group-reviewed journal when it is ready."

PPL is also seeking about £20m of funding for its stem cell research, which is aimed at treating diabetes. Mr James said work will be spun out of PPL shortly, despite a hiccup with part of the programme, which allows stem cell research without using animal embryos.

He added that the stem cell side is raising money in the UK – in the US, anti-abortion activism makes this work difficult to market – and a deal should be announced soon with a British venture capital firm.

The two fund-raisings come on top of the £32m PPL raised via a rights issue last year. This was dogged with difficulties, not least because of its timing, which coincided with the 11 September disasters in America.

The £32m is to be used to develop the recAAT drug to market. This treatment for respiratory difficulties connected to cystic fibrosis and emphysema was developed from work with Dolly, the famous cloned sheep created at the Roslin Institute in Edinburgh. Ian Wilmut, Dolly's creator, said on Friday that she had developed juvenile arthritis, which has led to questions about the cloning methodology. But Mr James said he thought the arthritis issue was "not commercially significant", explaining: "Dolly is five and a half years old and few farmed sheep reach that age." He said Dolly had successfully bred six lambs, which were doing well.

PPL shares have had a roller-coaster ride on the stock market since news of the pigs emerged. They leapt 24.5p to 77.5p on Wednesday before slipping back on Thursday and Friday to close at 62p.