Male Knock-Out Pigs Press Release

Blacksburg, Virginia: PPL Therapeutics Plc, one of the world’s leading biopharmaceutical companies in the application of transgenic technology to the production of human proteins for therapeutic and nutritional applications, is pleased to announce it has produced the World’s first male ‘knock-out’ piglets which were born as a result of using nuclear transfer (cloning) and PPL’s patented gene targeting technology. Four litters (a total of 20 piglets) were born during the week 25-29 March, 2002. These males, upon reaching sexual maturity, will be bred with the knockout females born at PPL on Christmas Day, 2001, to produce "double knock-out" pigs. The gene that has been ‘knocked-out’ in these pigs, the alpha 1,3 galactosyl transferase (GT) gene, is responsible for making an enzyme that adds a sugar to the surface of pig cells which is recognised by the human immune system as foreign. This triggers an immune response in the human patient, leading to hyperacute rejection within minutes, of the transplanted organ or cell. The ability to delete or ‘knock-out’ this gene, therefore, provides a vital step in producing pigs with organs and cells (ie. insulin producing cells) useful in humans.

Double knockout pigs lack both copies of the alpha 1,3 GT gene and thus will be completely devoid of the foreign sugars. Cells and organs from these double knockout pigs should become available in early 2003, and will be used for pivotal transplantation studies in small animal and primate models. It is anticipated that the first application of this technology will be the testing of insulin-producing islet cells for the treatment of diabetes from the ‘double knock-out’ pigs, first in primates, and soon thereafter in humans. Human clinical trials could start in as little as four years and analysts believe the market could be worth over $6 billion for cellular therapies for Diabetes, Parkinson’s and Alzheimer’s Disease, and another $5 billion for solid organs (kidney and heart initially).

PPL is in the process of spinning out its regenerative medicine programs, xenografts and stem cells, in order to focus its financial resources on its lead products, recAAT, for hereditary emphysema, Fibrin 1, and BSSL. The announcement today recognizes another key milestone for PPL in the area of xenotransplantation and demonstrates the company’s leading-edge position in this rapidly developing field.

PPL’s comprehensive xenograft program relates to both its technology and its Intellectual Property portfolio. In addition to overcoming early hyperacute rejection, the Company has also shown proof-of-concept, and has patents for, solutions for all aspects of xenograft rejection including delayed xenograft refection, coagulopathy, and chronic T cell mediated rejection. Thus the ‘GT knock-out’ pig will serve as the platform for adding up to three more genes, and include a T cell tolerance regime, in order to address all stages of rejection.

The ‘knock-out’ work was carried out by PPL Therapeutics Inc, PPL’s US subsidiary located in Blacksburg, Virginia, and was partly supported by an ATP Grant from the US Government’s National Institute of Standards and Technology (NIST). To date, the company has generated more than 35 female alpha 1,3 GT knockout pigs since the first litter was born in December 2001, demonstrating that this technology is now a reliable and reproducible tool for making very precise genetic changes in these animals. The 20 piglets reported in this announcement, all males, were confirmed through DNA tests to have one of their two copies of the GT gene inactivated.

Dr. David Ayares, COO and VP of Research at PPL’s US Division stated:

"Now that we have both male and female GT knockout pigs, we are now months, not years, away from being able to carry out the pivotal pig-to-primate transplant experiments. Long term survival of tissues from these genetically-modified pigs, in primates, is the step that both the scientific and investment communities have been eagerly anticipating for almost a decade. This advance brings us ever closer to the promise of an unlimited supply of cells, tissues, and organs, towards curing, not just treating, human disease, while providing a solution for overcoming the world-wide organ shortage crisis."

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Notes to Editors:

1. PPL Therapeutics is a biopharmaceutical company which is one of the world’s leaders in the application of transgenic animal technologies to the development and production of human proteins for therapeutic and nutritional applications. PPL’s three lead products are AAT, fibrinogen and bile salt stimulated lipase (BSSL). PPL is the only company to offer a wide range of animals for transgenic protein production, including sheep, cows, rabbits and pigs.

2. Xenotransplantation is the transfer of cells, tissues, or organs from one species to another. The fundamental problem with transferring organs between species is rejection by the recipient’s immune system. PPL’s program has aimed to overcome the causes of rejection and allow the development of a stock of transgenic animals containing genetic modifications which can be used as organ donors for humans.

3. For additional information on xenotransplantation please visit PPL’s web site: www.ppl-therapeutics.com.

4. In addition to its xenograft program, PPL has an advanced stem cell program which holds the promise of providing a human cell-based solution to diabetes, neurological and cardiovascular disease. The Company received a second ATP grant from NIST in January, 2001 for $2 million to fund its proprietary research on the generation of "ethical" stem cells. This method involves the de-differentiation of somatic cells to become ES-like cells, and has the advantage that no embryos are created or destroyed at any point in the process. This technology provides a solution to the shortage of stem cell lines for therapeutic applications.

5. The US division of PPL also has a 3 year, $3.1 million contract with the US Dept. of Defense for biological warfare countermeasures. As part of this DARPA-funded effort, the Company is utilizing its proprietary cloning and gene targeting technology to inactivate all the cow antibody-producing genes, and replacing them with human equivalents, in order to make large volumes of fully-human polyclonal antibodies, in cattle, as a means of immunizing soldiers and civilians against biological warfare pathogens such as anthrax.