Documents submitted to the UK Listing Authority

BTG plc

19 June 2012

ANNUAL REPORT AND ACCOUNTS 2012

In accordance with the Listing Rule 9.6.1, copies of the following documents have been submitted to the UK Listing Authority.

·; A copy of the Company's Annual Report and Accounts for 2012

·; A Circular to shareholders incorporating the Notice of the 2012 Annual General Meeting

These documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do;

The documents have been posted/made available to shareholders and the Annual Report and Accounts 2012 and Notice of Annual General Meeting 2012 are available on the Company website at www.btgplc.com.

The Annual General Meeting will be held at 2.00 pm on Tuesday, 17 July 2012 at the offices of Stephenson Harwood LLP, 1 Finsbury Circus, London EC2M 7SH.

In accordance with DTR 6.3.5, extracted below from the Annual Report and Accounts is a management report in full unedited text which contains a responsibility statement, principal risk factors and details of related party transactions. References to page numbers and notes in the extract refer to those in the Annual Report and Accounts 2012. A condensed set of financial statements were appended to BTG plc's preliminary results announcement issued on 21 May 2012.

Name of contact and telephone number for queries:

Andy Burrows 020 7575 1741

Director of Investor Relations

BTG plc

 UNEDITED EXTRACT FROM ANNUAL REPORT AND ACCOUNTS 2012

 The directors include the following statements:

 1. STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS

The directors are responsible for preparing the Annual Report and Accounts and the Group and Company financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare Group and Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with IFRSs as adopted by the EU and applicable law and have elected to prepare the Company financial statements on the same basis.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of their profit or loss for that period. In preparing each of the Group and Company financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with IFRSs as adopted by the EU; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a compliant directors' report, directors' remuneration report and corporate governance statement. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.

Directors' responsibility statement pursuant to DTR4

We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

• the directors' report includes a fair review of the development and performance of the business of the Group and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. 

2. STATEMENT IN THE DIRECTORS' REPORT IN RESPECT OF THE BUSINESS REVIEW

The Company is required by the Companies Act 2006 to set out a fair and balanced review of the business, including the performance and development of the Company during the year and at the year end and a description of the principal risks and uncertainties it faces. This information is contained in the following statements and reports, which are incorporated into this report by reference:

·; The Chairman's statement on page 6, the Chief Executive Officer's review on pages 8 to 14 and the business review on pages 16 to 20 provide details of the Group's principal activities and strategy, its performance during the year and its prospects for future development opportunities.

·; Details of the principal risks and uncertainties facing the Group are set out on pages 26 to 29.

·; Information relating to the environment, employees and stakeholders is set out in the corporate responsibility report on pages 30 to 34.

This information is prepared solely to assist shareholders to assess the Company's strategies and the potential for those strategies to succeed. The directors' report should not be relied upon by any other party or for any other purpose. Forward-looking statements have been made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including economic and business risk factors.

3. PRINCIPAL RISKS AND UNCERTAINTIES

Our performance and prospects may be affected by risks and uncertainties relating to our business and operating environment. Our internal controls include a risk management process to identify key risks and, where possible, manage the risks through systems and processes and by implementing specific mitigation strategies.

The most significant risks identified in an annual update of the Group's risk register that could materially affect the Group's ability to achieve its financial and operating objectives are summarised in this section. Other risks are unknown or deemed less material.

Risk:

BTG relies on third-party contractors for the supply of many key materials and services, such as filling and freeze-drying of end products. These processes carry risks of failure and loss of product. Problems at contractors' facilities may lead to delays and disruptions in supplies. Some materials and services may be available from one source only and regulatory requirements make substitution costly, time-consuming or commercially unviable. BTG's polyclonal antibody products rely on serum produced from our sheep flocks in Australia, which could be subject to disease outbreaks or fire. BTG relies on its single site in Wales for supply of manufactured antibody products, with the consequent possibilities for disruption to supplies.

BTG manufactures its own bead and brachytherapy products at single sites in Farnham, UK, and Oxford, CT, USA, respectively, with the consequent possibilities for disruption to supplies. BTG plans to undertake the manufacture of PEM at its Farnham site, requiring the establishment of new manufacturing facilities to meet the requirements of Good Manufacturing Practice. This site will require regulatory approval and a licence to support the commercialisation of PEM. Any delay in establishing this facility or obtaining the necessary manufacturing licences may result in a delay in the approval of PEM reducing future earning potential. The continuity of potential PEM revenues will also be subject to single source risk.

Controls and mitigating actions:

Rigorous monitoring of suppliers; dual sourcing implemented wherever practicable; inventories maintained and monitored through sales and operational planning process and production changes implemented where needed to ensure continued product supply; rigorous quality control procedures in place; regular checks made on sheep flock health; disaster recovery plans under regular review.

Risk:

BTG can be subject to patent challenge at any time. Challenges can relate to the validity of BTG's patents or to alleged infringement by BTG of intellectual property rights of others, which might result in litigation costs and/or loss of earnings. BTG might be obliged to sue third parties for their infringement of its patents in order to protect revenue streams. Failure by BTG to maintain or renew key patents might lead to losses of earnings and liabilities to licensees or licensors. BTG may not be able to secure the necessary intellectual property rights in relation to products in development, limiting the potential to generate value from these products. Changes in patent laws and other intellectual property regulations in territories where BTG or its licensees conduct business that make it more difficult or time-consuming to prosecute patents, or which reduce the term of granted patents or periods of market exclusivity protection, could adversely impact the Group's financial performance. BTG's patent portfolio is currently subject to several challenges.

Controls and mitigating actions:

Dedicated internal resource supplemented by external expertise monitors patent portfolios, third-party patent applications and intellectual property rights; development and implementation filing, defence and enforcement IP strategies; robust processes in place to automate patent renewals; internal controls established to avoid disclosure of patentable material prior to filing patent applications.

Risk:

BTG's key current royalty-generating products are expected to continue to provide royalty revenues until their patents or licence agreements expire. Any unforeseen patent loss, supply, safety or compliance issues with these products could result in premature cessation of the revenues.

BTG earns revenues from sales of its acute care products CroFab®, DigiFab® and Voraxaze®. CroFab® is patent protected but DigiFab® and Voraxaze® have no patent protection at this time; CroFab® and DigiFab® are protected by significant know-how and complex manufacturing processes and BTG expects revenues to continue regardless of patent protection. However, future competition cannot be ruled out and competing products could materially adversely impact BTG's financial results.

Instituto Bioclon has announced the completion of a Phase III clinical trial of a potential competitor product to CroFab®.

BTG also earns revenues from sales of its bead and brachytherapy products, all of which are subject to competition. While these medical devices benefit from patent protection certain patents are subject to challenge.

Controls and mitigating actions:

New royalty streams may emerge. For example, regulatory of approval in the US and elsewhere of Zytiga® as a treatment for men with advanced prostate cancer has resulted in new revenues during 2011/12; additional future royalty streams would result if alemtuzumab is approved to treat multiple sclerosis and from AZD9773 if approved to treat severe sepsis. BTG acquired US commercial rights to uridine triacetate from Wellstat Therapeutics Corporation in July 2011, and EU named patient supply rights in May 2012 which may lead to a new revenue stream if approved. Mitigations with respect to the bead products include product development, geographic expansion, appropriate IP lifecycle management and the conduct of clinical studies to expand their indicated uses and sales.

Risk:

The pharmaceutical industry is highly regulated and the Group must comply with a broad range of regulations relating to the development, approval, manufacturing and marketing of its products. This is particularly true in the US, from which the Group derives most of its revenues and where the Group has established its own sales and marketing operations. Specific requirements relating to quality assurance apply to the Group's manufacture of products, particularly in the pharmaceutical area. Regulatory regimes are complex and dynamic, and alterations to the regulations may result in delays in product development, approval or withdrawal. Ensuring compliance with such regulations necessitates allocation of significant financial and operating resources.

Failure to comply with certain rules, laws and regulations may result in criminal and civil proceedings against the Group. Significant breaches could result in large financial penalties, which could materially adversely impact the Group's financial performance and prospects. Moreover, failure by BTG or a BTG partner company to comply with regulations may result in a product being withdrawn from the market with a subsequent loss of revenues.

Controls and mitigating actions:

A Code of Conduct has been provided to all employees supported by a mandatory training programme; robust compliance systems are in place to ensure sales and marketing activities comply with regulations in the US and other territories; standard operating procedures are in place to ensure compliance with good clinical and manufacturing practice and to manage pharmacovigilance requirements, monitored through quality control systems. Internal expertise is maintained to manage these risks.

Risk:

The manufacturing, testing, marketing and sale of BTG's products involve significant product liability and business interruption risks. As the developer, manufacturer and/or seller of certain products, BTG may be held liable for death or personal injury to persons receiving the products during development or after the product is approved.

Controls and mitigating actions:

BTG maintains product liability insurance and operates quality systems relating to the manufacture of its products and a pharmacovigilance system to monitor safety events arising with respect to products sold. It may not be commercially viable to adequately insure against the occurrence of other key risks.

Risk:

BTG conducts limited fundamental research to generate its own development programmes but instead seeks to acquire new products and late-stage development programmes from other organisations. There is significant competition from other companies also seeking to acquire new products and programmes who may have greater financial resources and sales and marketing reach than BTG. BTG may not be able to acquire suitable products and programmes, which will materially adversely impact the Group's financial future performance and growth prospects.

Controls and mitigating actions:

Dedicated product acquisition team in place; strategy is to focus on niche opportunities that leverage BTG's US commercial operations and those that may be a better fit with BTG than with other organisations. Development teams working to develop follow-on products from existing technology platforms such as embolisation beads.

Risk:

The development of medical products is inherently uncertain and the timelines and costs to approval may vary significantly from budget or expectation. The product may not demonstrate the expected safety and efficacy benefits and may not be approved by regulatory bodies, such as the US Food and Drug Administration. Manufacturing difficulties or patent litigation may cause programmes to be delayed or halted or products withdrawn. Failure of a late-stage programme such as PEM would materially adversely impact the Group's financial prospects. Regulatory approval requirements may change, resulting in further uncertainty. Even if a product is approved that is no assurance of commercial success.

Controls and mitigating actions:

Experienced development team in place; focus is on acquiring late-stage programmes that have already demonstrated proof of concept and potentially have lower-risk development pathways; development programmes monitored to identify risks and challenges and recommend mitigating and corrective actions. Certain products are licensed to other companies who may have greater resources to support product development. Regulatory team in place, consultation undertaken with applicable regulatory authorities.

Risk:

The Group operates in competitive markets. The products on which BTG currently earns revenues, or from which it anticipates earning revenues once on the market, face competition from other products that are already approved or in development. Competing products may have superior efficacy and side effect profiles, cost less to produce or be offered at a lower price than BTG's products; such competition could materially adversely impact Group revenues.

Controls and mitigating actions:

BTG focuses on niche opportunities addressing specialist markets where there is limited competition and high barriers to entry; CroFab® and DigiFab® have no current competitors; both products are complex to manufacture. We differentiate the embolisation and drug-eluting bead products from competitors by supporting a range of clinical studies to generate safety and efficacy data to expand their indicated uses.

Risk:

There is increasing pressure on healthcare budgets causing payers to demand increasing treatment and economic benefits before agreeing to reimburse product suppliers at all or at appropriate prices. In March 2010, healthcare reform legislation was adopted in the US, requiring manufacturers to increase the rebates or discounts they give on products reimbursed or paid for by public payers including Medicaid and Medicare. The purpose of the reform is to increase healthcare coverage in the US population and to manage treatment of chronic conditions efficiently and cost effectively. Management of acute conditions is generally not affected. BTG's acute care and implantable oncology products treat serious medical conditions and the impact of existing healthcare reform on current Group revenues is not expected to be material to the Group's financial position. Approval and commencement of sales in the US of PEM, a potential treatment for varicose veins, may result in the Group increasing the discounts or rebates given on its other reimbursed products in the US. If BTG acquires products in future that are more impacted by healthcare reforms, revenue expectations could be lower. Failure of a product to qualify for government or health insurance reimbursement or the failure to achieve an appropriate sales price could adversely impact the Group's financial performance. Future healthcare reforms may become more onerous and may have a negative impact on Group revenues.

Controls and mitigating actions:

BTG focuses primarily on niche products that address serious unmet needs; early on in a product's development, the Group conducts pricing and reimbursement studies; the assessments of potential new products will include an assessment of healthcare reforms on pricing and reimbursement.

Risk:

Many of BTG's revenues and receipts are denominated in US dollars and movements in foreign exchange rates could adversely impact results.

Controls and mitigating actions:

BTG actively manages its exchange risks where feasible, using short-term hedging transactions guided by market expectations and economic forecasts to seek to match actual receipts and payments over a rolling 12-month period to those forecast. This policy can result in both exchange gains and losses but provides a level of certainty over cash receipts.

4. RELATED PARTY TRANSACTIONS

The Group has a related-party relationship with its subsidiary undertakings (see note 2(b)), its associates (see note 2(b)) and its directors. During the year the Group invested a further £0.5m in its investments (see note 17). No dividends were received from associates in the years ended 31 March 2012 or 2011.

In relation to the related party relationship identified on page 51 concerning Giles Kerr, payments made by BTG to Oxford University and Isis Innovations Ltd under the relevant licence agreements were £0.8m during the year ended 31 March 2012. There are no amounts still outstanding and payable by BTG under these agreements as at 31 March 2012.

Key management personnel are considered to be the directors and their remuneration is disclosed within the remuneration report on pages 61 to 75.