Boardroom cull as PPL put up for sale

PPL Therapeutics, the ailing Midlothian firm that cloned Dolly the sheep, today put itself up for sale and announced the departure of most of its board after failing to gain sufficient support for a management rescue plan.

In June, the Roslin-based company said it was shedding most of its workforce after its partner, German pharmaceutical giant Bayer, put on hold the development of a key lung disorder treatment.

The decision to suspend the development of recATT, a medicine made from the milk of genetically-modified sheep, was a major blow to PPL, and left the firm with a single product - the blood clotting treatment Fibrin 1.

In a statement released today, PPL reported widening first-half losses and said it had been faced with a number of options, including restructuring the business to focus solely on Fibrin or winding itself up.

It said: "The board believes that there is the potential for significant long-term value to be created from the Fibrin 1 product as part of a broader sealants business.

"Although the majority of PPL’s major institutional shareholders were supportive of the sealants plan, the required level of support to go forward was insufficient."

PPL confirmed it was now seeking "an orderly sale of the business in order to maximise the short-term value of its assets for the benefit of all shareholders".

Shares in PPL rose ten per cent to 5.62p in pre-lunch trading following this morning’s news.

The boardroom cull involves the departure of chief executive Geoff Cook, product development director Martyn Breeze, manufacturing director Gordon Wright and non-executive directors Arthur Hale and Roger Brimblecombe.

All five will step down "with immediate effect", leaving a small group of directors, including chairman Chris Greig and chief financial officer Lindsay Dunsmuir, to oversee the disposal process, which will be administered by KPMG’s corporate finance arm.

PPL said the on-going restructuring of the business had seen its headcount drop from 161 to just 55, "consistent with preserving the value of PPL’s key assets".

To date, the restructuring has cost the local firm 8.1 million in write-downs, redundancy costs, and other liabilities resulting from the decision to postpone the recAAT project.

The interim accounts showed PPL had made a pre-tax loss of just under 13.5m in the six months to June 30, against 6.4m a year earlier.

However, it said the reduction in its workforce had trimmed cash burn from 600,000 a month to around 250,000, while it had some 9.3m in cash available.

PPL was once seen as the darling of the Scottish biotech sector, and has been involved in some major industry breakthroughs.

As well as cloning Dolly in 1996, it was the first company to announce it had cloned pigs capable of providing organs for humans and has also worked on stem cells, which scientists believe can be coaxed into growing replacement organs.

During the summer, PPL began a mass slaughter of its flock of genetically-modified sheep in an effort to cut costs.

Shortly before that, it announced it has scrapped plans to build a multi-million pound manufacturing plant at Gowkley Moss in Midlothian. The facility would have created around 200 new jobs..