Dolly firm drops plant plan

The firm was behind the creation of Dolly the sheep

The company behind Dolly the sheep has pulled out of plans to build a new £42m plant in Scotland.

The news comes as PPL Therapeutics admitted losses following delays in developing a treatment for the lung disease emphysema.

On Monday shares in PPL fell 8% (to 5.87p) after it posted a rise in pre-tax losses to £20.1m, from £14.3m in 2001.

Earlier this month the Edinburgh-based company sold its regenerative medicine business which develops organs in pigs for human transplant.

The decision to pull out of the proposed Midlothian plant - which would have created 200 jobs - resulted in a £7.5m one-off charge in its 2002 accounts. That was on top of falling revenues as a result of the delay.

'Realigning the business'

PPL said that while it would produce quantities of the emphysema treatment needed for trials at its pilot plant in Edinburgh, it was considering sub-contracting production to another group when it comes on the market.

Geoff Cook, who took over as chief executive at the company at the start of this year, said significant progress had been made in cutting costs and realigning the business to focus on its core protein-based products.

Mr Cook said: "The group's non-core businesses have been successfully disposed of and the cash burn significantly reduced."

The delayed product is designed to help patients who suffer from a deficiency of "AAT", a substance which protects the lungs from tissue damage which causes emphysema.

The treatment is produced transgenically - meaning that human proteins are injected into the genetic material of a sheep and collected through its milk.

Under an agreement signed in 2000, German firm Bayer is responsible for the third stage of trials and marketing of the drug while PPL takes on manufacturing the drug.