PPL, Scotland’s former biotech flagship, has given up the fight to remain independent after investors rejected plans to re-organise the business around its Fibrin I surgical sealant.<\/p>\n
The company has already been through a drastic downsizing after putting development of its flagship rAAT product on indefinite hold, and now the majority of its board of directors – including Geoff Cook, chief executive – are set to step down.<\/p>\n
The announcement came in conjunction with news that PPL’s losses for the half-year to June 30 had ballooned to (pounds) 13.5m before taxes.<\/p>\n
The company, based on the outskirts of Edinburgh, is best known for its role in the creat-ion of Dolly, the clone created from a single cell of an adult sheep. This was done in conjunction with the Roslin Instit-ute, headed by Professor Ian Wilmut.<\/p>\n
Yesterday’s decision to put the business up for sale came as little surprise to most observers, as PPL has been struggling for more than two years to turn its cutting-edge science into fin- ancial returns for investors.<\/p>\n
Some analysts blamed the situation on PPL’s inability to concentrate on a single area of research.<\/p>\n
“I think there’s a feeling they tried to be all things to all men, rather than focusing on one project,” said Keith Redpath, an industry analyst at Panmure.<\/p>\n
PPL has been under sust-ained fire since June of this year, when it and German partner Bayer said they would call a halt to work on rAAT, PPL’s lead product and the primary reason for the company’s formation in 1987. Produced from the milk of genetically-modified sheep, rAAT was aimed at treating hereditary emphysema and similar types of lung diseases.<\/p>\n
The decision to put rAAT on hold brought with it the loss of more than 100 jobs at PPL, whose workforce now stands at 55.<\/p>\n
It also gave further ammunition to certain groups that have been pressing for the break-up of PPL.<\/p>\n
The most vocal on this front has been shareholder action group Willowdrive, which has been pushing for a trade sale and return of cash to shareholders since last autumn.<\/p>\n
Metage Capital, the hedge fund which owns about 20.5% of PPL’s equity, is also seen as sympathetic to the share- holder value cause.<\/p>\n
However, Metage’s Tom Sharpe yesterday refused to be drawn on whether his com-pany had blocked PPL’s efforts to reorganise around the Fibrin product.<\/p>\n
“We’re not going to comment on what our position may or may not have been,” Sharpe said.<\/p>\n
He added: “We have met with (PPL), and we are meeting with them again now about how to take the company forward.”<\/p>\n
PPL said the majority of its institutional shareholders had supported the plan to focus on Fibrin I, a kind of glue used to stop bleeding and seal punct-ures during surgical proced-ures.<\/p>\n
However, “the required level of support to go forward (with this plan) was insufficient”.<\/p>\n
As a result, restructuring of the business will continue with the departure of Cook and fellow executive directors Martyn Breeze and Gordon Wright. Non-executives Hamish Hale and Roger Brimblecombe will also step down “with immed-iate effect”.<\/p>\n
Advisers from the corporate finance arm of KPMG will join the remaining directors – non-executives Chris Greig and Hugh Thompson, together with chief financial officer Lindsay Dunsmuir and busin- ess development director Adam Christie – in the search for a buyer.<\/p>\n
However, analysts were left wondering yesterday who might want to take over the PPL operation.<\/p>\n
“That’s a very good quest-ion,” said Julie Simmonds, a biotech analyst with Evolution Beeson Gregory.<\/p>\n
“There’s not a huge amount of logic given that the two bits (rAAT and Fibrin) don’t really go together, so I imagine you’re looking for two buyers.<\/p>\n
“As to who they might be, I would not want to speculate.”<\/p>\n
Shares in PPL closed unchanged at 5.25p.<\/p>\n","protected":false},"excerpt":{"rendered":"
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