Posted on 23-6-2003
Biotechnology
Company Pulls Plug On GE Sheep
by Kent Atkinson, NZPA, 20.06.2003
Scottish biotechnology company PPL Therapeutics Ltd is pulling
the plug for
at least three years on New Zealand's first transgenic livestock
field
trial - in which more than 4000 sheep are grazing Waikato pastures.
No details have yet been announced on the fate of the New Zealand
flock of
genetically engineered sheep producing milk containing a human
protein, now
that PPL has canned its plans to develop a lung drug extracted
from the GE
milk. PPL - which created Dolly the cloned sheep in 1997 - announced
today
it was laying off 90 per cent of its staff - between 90 and
140 jobs in
Edinburgh and New Zealand. PPL's project is based on a 50ha
farm at
Whakamaru, 140km south of Hamilton, and it had been in the process
of
buying another property so it could begin milking cloned ewes
later this
year. PPL is thought to have as many as 1000 transgenic ewes
among the 4000
sheep on its 50ha South Waikato property, which has been building
up its
flock numbers in preparation for milking. The milk was to be
taken from the
ewes, frozen and sent to Edinburgh for the removal of the protein
recombinant alpha-1-antitrypsin (rAAT).
Recombinant proteins are human proteins produced outside the
body, often by
genetically engineering herd sheep or cattle and then harvesting
the
proteins from their milk.
Shares in PPL Therapeutics fell nearly 10 per cent overnight
in Britain
after the biotech entrepreneur said it had interrupted the development
of
recombinant hAAT 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. But PPL last night expressed
"disappointment" that its German partner had effectively pulled
the plug on
the whole scheme. "In the light of today's joint announcement
by PPL and
Bayer concerning the future of the hAAT programme, PPL also
announces today
a significant restructuring of its business," the company said.
It would
instead focus on the potential for building a surgical sealants
business
around PPL's Fibrin I programme, designed to offer surgical
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," the
company said in a statement.
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 were
hoped to
help halve its spending of $1.7 million a month. The strategic
review by
accountancy company KPMG may see PPL Therapeutics wound up,
and its $25.3
million of remaining cash returned to shareholders - a step
some investors
expected to seek at the company's annual meeting. Such a move
could raise
concerns in New Zealand about what should be done
with the GE sheep in the Waikato. Environmental Risk Management
Authority
chief executive Dr Bas Walker said today the authority had had
no formal
notice from PPL that the status of its New Zealand transgenic
flock had
changed. PPL would be legally responsible for ensuring the conditions
under
which the trial was granted were not breached.
PPL chief executive Geoff Cook said Bayer's decision left PPL
with
intellectual property but little chance of developing it in
the short term.
"We have got few options other than to reduce cash burn," he
said. "What we
can offer shareholders ... is a sealants plan with Fibrin 1,
liquidating
assets, or the sale of the company." The assets to be liquidated
would
include its New Zealand operation. PPL is reported to have written
off
nearly $22 million last year after dropping plans for building
its new
manufacturing plant for the hAAT from its New Zealand sheep.
Analysts said the PPL experience indicated that great technology
did not
necessarily make great business. A little over a month ago PPL
dropped
plans for a centre to produce a range of Dolly-type drugs, but
said at the
time it remained committed to developing hAAT. PPL had said
it hoped to
launch the product in 2007, but there have been fears in investment
circles
that the company would run out of money first. PPL was given
permission to
"field test" its genetically engineered sheep in New Zealand
on March 23
1999, when it already had a flock of 100 transgenic sheep at
Whakamaru,
140km south of Hamilton. It bred the flock from semen imported
from
Scotland, with permission given by the Environment Ministry's
interim
assessment group -- the forerunner to Erma -- in 1996. The hearing
on the
field trials was one of Erma's highest profile public hearings.
It was told
by the authority's own Maori advisory committee, Nga Kaihautu
Tikanga
Taiao, that some Maori found the insertion of human genetic
material into
other species culturally offensive and abhorrent, and said the
bridge
between human and non-human species should not be crossed.
PPL's then managing director, Ron James, said he wants to lift
the flock's
size, first to 1000 ewes and later to 10,000, but it promised
that no more
than 5000 sheep would be based on its initial quarantine site
in the
Waikato. Erma, a semi-judicial body of eight experts, said the
adverse
effects of the genetic engineering were outweighed by the beneficial
effects "taking into account the scope for risk management".
A containment
regime proposed by PPL, together with additional controls imposed
by Erma,
would adequately contain the organism, the authority said. The
controls
included keeping all sheep in containment approved by the Ministry
of
Agriculture and Forestry (MAF), and disposal of all waste milk,
sheep
carcasses and any biological material on site or by incineration.
Unauthorised people and other organisms would be excluded from
the farms,
its 2m-high perimeter fencing electronically alarmed and individual
sheep
tagged and implanted with microchips.
The transgenic sheep have been modified with copies of human
genes from a
Danish woman to produce the human protein alpha-1-antitrypsin
(hAAT). The
company has said this could theoretically be used to treat conditions
such
as cystic fibrosis and acute respiratory problems, although
a vocal critic
of the PPL project, New Zealand scientist Robert Mann, told
regulators that
preliminary trials overseas using AAT proved very little.
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