RNS Number:4965M
PPL Therapeutics PLC
18 June 2003

Date:        For immediate release: Wednesday 17th 2003

Contact:     Geoff Cook, Chief Executive Officer
             Lindsay Dunsmuir, Chief Financial Officer
             PPL Therapeutics plc                       Telephone: 0131 440 477



             Alistair Mackinnon-Musson
             Philip Dennis
             Hudson Sandler                            Telephone: 020 7796 4133
                                                       Email: ppl@hspr.co.uk




                              PPL Therapeutics plc

                       PPL Announces Major Restructuring



In the light of today's joint announcement by PPL and Bayer concerning the
future of the AAT programme PPL also announces today a significant restructuring
of its business.



Focus on Fibrin I

Whilst management is disappointed at the outcome of the negotiations with Bayer,
PPL has for some time been focused on the potential for building a surgical
sealants business around PPL's Fibrin I programme. Fibrin I addresses a
potential market of 3 to 4 million surgical procedures per year in the US alone.
The market for surgical sealants in the US and EU is growing rapidly and is
expected to exceed $500m by 2006. PPL intends to develop Fibrin I as a device in
Europe as this entails a more rapid and straightforward regulatory route than
that associated with a medicine.



The Board continues to believe the business opportunity for Fibrin I is
substantial because it addresses a key unmet need i.e. a ready-to-use fibrin
sealant, in a rapidly growing market. Fibrin I is being developed by PPL as a
liquid which is ready for the surgeon to use from the refrigerator, in contrast
to existing fibrin sealants which require significant preparation before use.
PPL intends to partner the product late in its development, thereby maintaining
control and capturing more value from the programme. The Board reiterates its
view that the Company has sufficient funds and resources to bring Fibrin I to
market. The Board believes that this will be in 2006.



PPL is in late stage discussions with plasma fractionators who will manufacture
Fibrin I and is also negotiating to acquire additional medical sealant/adhesive
intellectual property (IP), which would open up additional market opportunities,
to build the portfolio.  The end result would be a strong sealants business
founded upon the distinct competitive advantage of Fibrin I.



Corporate restructuring resulting from AAT delay

AAT was a major component of PPL's business, both in terms of its research and
development activities and also its manufacturing capacity.  PPL retains its IP
in relation to AAT 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.  This will also include a reduction in the size of the PPL Board to
reflect the size of the ongoing business.  The final number of job losses will
be a function of the outcome of the strategic review referred to below. These
and consequent measures will substantially reduce PPL's cash burn to below half
of the existing level of approximately #0.6m per month (after the impact of the
R&D tax credit).



In respect of recBSSL, PPL continues to evaluate options to accelerate its
development at low cost.



PPL recently appointed KPMG Corporate Finance to assist the Board in the
evaluation of strategic options for the Company, in order to maximise
shareholder value.  This review includes evaluating whether PPL retains
sufficient critical mass to maintain the viability of its transgenic technology
platform.



As at 31 May 2003 the Company had gross cash deposits of #11.2m and net cash
deposits of #8.7m, after deducting debt of #2.5m.  Since that date #1.5m has
been received in R&D tax credits from the Government.



Geoff Cook, PPL's CEO commented:

"The desire to restructure the business is a consequence not only of today's
decision on AAT, but also the significant opportunity offered by Fibrin I.  The
Company is taking immediate action to reduce its cash burn and is reviewing
additional options to maximise value for shareholders.



AAT has been central to PPL's business since the foundation of the Company.
Today's decision to put the programme on hold in no way reflects the significant
endeavours of the workforce over the last year."




Notes to Editors



1.         Fibrin I is based on a fibrin monomer that is mixed with a
neutralising buffer at the site of surgical application by means of a dual
chamber syringe, where it polymerises to stop bleeding and seal tissue. It will
be supplied as a liquid in pre-filled syringes and stored in the refrigerator,
from where it is ready to be used.



It is at least as effective as traditional fibrin sealants in sealing tissue and
promoting haemostasis. Preclinical data suggests the product may promote a more
natural and rapid wound healing process than traditional fibrin sealants, which
may reduce the potential for the formation of post surgical adhesions.



An extensive patent portfolio provides comprehensive protection for the product
in major markets until 2015 in the fields of haemostasis, tissue sealing,
adhesion prevention and other biosurgery indications.



PPL has the rights under this intellectual property to develop Fibrin I based on
human plasma derived fibrinogen and recombinant fibrinogen. The quickest route
to market is Fibrin I based on plasma derived fibrinogen and this is the
development route that PPL is currently pursuing.



2.         BSSL is an enzyme normally produced in the pancreas which
breaks downs lipids in the human digestive system.  Fatty acids, the products of
lipid digestion, play a vital role in energy supply and general metabolism.
Patients with cystic fibrosis do not produce and secrete sufficient amounts of
BSSL, resulting in poor fat digestion.  In the first weeks of life babies do not
produce BSSL, relying on that produced in the maternal milk.  This source of
BSSL is not always available to pre-term infants and fat digestion suffers as a
result, slowing the growth of the infant and potentially prolonging time in
critical care.

3.         Market data source on size of fibrin sealants market: Frost &
Sullivan.

4.         Further information about PPL, its products and technologies
can be found at:  www.ppl-therapeutics.com


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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