EDINBURGH-based PPL Therapeutics announced yesterday that its lead product for the treatment of cystic fibrosis had passed Phase I clinical trials, thus bringing it one small step closer to the commercial market.

In a six-month study, alpha-1-antitrypsin was shown to be ''safe and well-tolerated'' in healthy subjects.

The trial, which was conducted by an outside testing organisation, was carried out in the UK on 40 volunteers taking the treatment through an inhaler.

Phase II testing of the product, a naturally-occurring protein found in human blood, should begin in a matter of weeks. This year-long study will use cystic fibrosis patients in an effort to define the effective dose range and determine clinical efficacy.

More commonly known as AAT, alpha-1-antitrypsin was PPL's best-known hallmark before Dolly the cloned sheep grabbed headlines throughout the world earlier this year. Despite this, AAT still reigns as PPL's most advanced ''transgenic'' development.

It is produced by introducing a copy of a human gene into the genetic make-up of sheep, whose transgenic milk then produces 35 grammes per litre of the protein compared to the one or two grammes in a litre of human blood. PPL has 200 such sheep in five flocks producing AAT on a year-round milking programme.

If all goes well, PPL expects to launch its transgenic AAT treatment upon the completion of Phase III trials in the year 2001. It has been estimated there are some 55,000 cystic fibrosis patients in the US and Europe, forming a market that has been valued as worth up to #400m by the year 2006.

Although Phase I trials are fairly routine, PPL managing director Ron James described the achievement as a ''significant milestone'' for the company.

While admitting that it was a basic safety study, biotechnology analyst John Savin of Greig Middleton agreed that the completion of Phase I was important.

''It is a milestone, because it is the first time a transgenic product from PPL's flock has been used in humans,'' Mr Savin said.