Future dicey for GE sheep flock

Scottish biotechnology company PPL Therapeutics is pulling the plug for at least three years on New Zealand's first transgenic livestock field trial, which involves more than 4000 sheep grazing on Waikato pastures.

No details have been revealed on the fate of the flock of genetically engineeredsheep producing milk containing a human protein, now that PPL has canned plans to develop a lung drug extracted from their milk.

PPL, which created Dolly the cloned sheep in 1997, said yesterday that it was laying off 90 per cent of its staff - between 90 and 140 jobs in Edinburgh and New Zealand.

The GE sheep project is based on a 50ha farm at Whakamaru, 31km southwest of Tokoroa. The company was buying another property so it could begin milking cloned ewes this year.

PPL is thought to have as many as 1000 transgenic ewes among the 4000 sheep on its property.

Their milk was to be frozen and sent to Edinburgh for the removal of the protein recombinant alpha-1-antitrypsin (hAAT).

Recombinant proteins are human proteins produced outside the body, often by genetically modifying sheep or cattle.

Shares in PPL fell nearly 10 per cent overnight in Britain after the company said it had interrupted the development of the recombinant with drug company Bayer AG.

PPL had worked for three years with Bayer, which was due to carry out clinical trials and marketing, with PPL developing and making the protein.

The Scottish company's management expressed "disappointment" that their German partner had effectively pulled the plug on the whole scheme.

PPL said it would instead focus on building a surgical sealants business around its Fibrin I programme, designed to offer sealants for a potential market of 3 to 4 million operations a year in the United States.

The hAAT protein was a major component of PPL's business, both in terms of its research and development activities and also its manufacturing capacity.

The company said it had retained its intellectual property for hAAT "and will seek to maximise value for this".

"In the short-term, placing this programme on hold will mean the potential loss of between 90 and 140 jobs in the company at its sites in Scotland and New Zealand," PPL said.

The final number of job losses in the Waikato and at its Roisin head office near Edinburgh would be decided in a strategic review, but management's aim is to halve spending of $1.7 million a month.

- NZPA