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14 April 2003
Scott: PPL still short of cash
despite venture deal
Iain Dey
Reproduced with permission from
The Scotsman, Friday 11 April 2003
(Filed 14 April 2003)
www.land-care.org.uk
© The Scotsman
www.scotsman.com
PAUL Scott, the rebel shareholder in PPL Therapeutics,
insisted yesterday that Dolly the Sheep’s creator is still
likely to run out of cash within the next 18 months.
PPL disposed of its US-based regenerative medicines
business to a new joint venture group in an all-paper deal sealed
late on Wednesday night.
But while the move helps shore up the balance
sheet and leaves PPL with a 22.2 per cent stake in the new business,
Scott insisted the Midlothian-based biotech will to have to find
cash from somewhere to stay afloat.
Scott told The Scotsman: "There were good
and bad aspects to this deal. On the positive side, it does cut
down their cash burn. And they’ve managed to get reimbursed
for the running costs incurred since 1 January.
"But on the negative side, they’ve poured
multiple millions of shareholders’ pounds into this business,
which now they’ve basically just given away."
He added: "PPL’s first product is not
expected to reach the market until 2005. In PPL speak, that means
something more like 2008. But they’re still burning through
cash at a rate of about £700,000 per month, which doesn’t
leave them with much chance of surviving."
PPL chief executive Geoff Cook declined to comment
on the company’s future funding requirements or when its cash
pile is likely to run out. PPL is due to report its full year results
later this month.
But he admitted the sale came about because PPL
did not have enough cash to support both its core proteins business
- which created Dolly - and the regenerative medicine operation.
Over the six months to the end of June 2002, the regenerative medicine
division turned in a pre-tax loss of £500,000.
But Cook said that the business, which was also
responsible for creating genetically-cloned piglets that may ultimately
be used to create replacement human organs, is still leading its
field.
Only two other companies are operating in this area of expertise,
Cook said. One has had to go back to the lab, the other is in crisis
funding talks.
He continued: "This is the same group of
people, led by the University of Pittsburgh, that we’ve been
working with on this for the last three years. They really are very
well-placed in the sector."
The new venture, named Regenecor Holdings, is also backed by Highmark
Health Ventures and Fujisawa Investments. Its total start-up funding
of US$3.5 million (£2.2 million) is enough to keep it going
for 18 months.
Iain Dey
John Ross
©The Scotsman
Reproduced by Land-Care with permission of The Scotsman
www.land-care.org.uk
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