PPL Therapeutics drops $160m fund-raising plan

PPL Therapeutics, the Scottish biotechnology firm which created Dolly the cloned sheep, has dropped plans for a $NZ160 million (£45m) fund-raising, blaming a fall in technology markets which meant it could only have raised half the amount. PPL's shares fell 15 per cent to $4.02 (113p).

PPL, which had hoped the funding would see it through to break-even in 2004, has enough cash for around a year at its current "burn rate" of just under $3.6 million a month.

Ron James, chief executive of PPL, said that until four weeks ago existing and prospective shareholders had backed the plan. "But what has happened in those weeks, especially in the technology sector which we get lumped into, has been so bad that I have some sympathy with shareholders," he said.

Dr James said that the attitude of investors was typified by one who said: "Our hearts are in it but today I'm not sure our cheque books are."

However, despite the poor market conditions, PPL could have raised about half of the $160 million it wanted, Dr James said. The reason the company did not go ahead was because investors agreed to the proposal on the basis that PPL received within 10 per cent of the total $160m. The terms did not allow PPL to press ahead with a revised plan to raise less than $160m.

The company said yesterday that it would now pursue other means of boosting its funds. It is considering returning to the market with an alternative proposal to raise around $78m through a smaller placing.

PPL could also enter into an agreement with a company which could provide it with an "equity line of credit".

- INDEPENDENT