PPL upbeat despite drug hitch

THE biotech group behind Dolly the Sheep, PPL Therapeutics, was upbeat about its prospects despite recently announcing a major setback in one of its key development drugs.

Chief executive Geoff Cook, who last week sent shares to record lows after news of further delays to PPL's emphysema treatment AAT, admitted the future would be challenging, but said: 'We have every reason to be confident of success.'

The importance of AAT for PPL's financial survival was starkly illustrated by full-year figures to 31 December showing revenues increasing to £2m, from £800,000 a year earlier. Most of that increase was put down to money coming in from the AAT trials under its joint agreement with Bayer.

Research and development expenditure was ratcheted up to £12.2m from £10m, leaving the net loss at £12.7m against £11.2m the year before.

The group, which launched a £30m rights issue in November, has £22.2m cash. The rights issue had a tepid reception, less than 20% of its shareholders taking up the offer.

PPL's current plan is to increase its revenues by using its existing facilities to make drugs for other companies on a contract basis. Cook said it was already in talks with one drugs company to set up such projects.

But analysts said shareholders would need more concrete proof of future revenues before the shares regained the levels of 138 1/2p a share seen a year ago. Today the stock was wallowing at depths £1 lower, at 38 1/2p.