24th May 2007 07:01
BTG PLC24 May 2007 BTG plc: Preliminary Results for the Year Ended 31 March 2007 London, UK, 24 May 2007: BTG plc (LSE: BGC), the life sciences company, todayannounces its preliminary results for the year ended 31 March 2007. Financial highlights • Second consecutive year of profit: profit before tax of £2.6m vs £1.5m in 05/06 and loss of £34.8m in 04/05 • Continuing growth in net recurring revenues: 5% increase to £24.2m (05/06: £23.0m) despite adverse impact from exchange rate movements • Profit from the sale of IP and investments of £2.7m (05/06: £11.6m, which included £9.0m from the sale of the Teleshuttle patents) • Further significant reduction in costs: operating & administrative costs 22% lower at £18.9m (05/06: £24.3m) • Research and development investment increased to £9.7m (05/06: £9.1m) • Cash and equivalents of £43.0m (05/06: £51.0m of which £44.0m was "free" cash) • Post year-end transactions generating 07/08 net income of £11m Operating highlights • Good progress with BTG's pharmaceutical pipeline: o Varisolve(R) (varicose veins) US phase II safety study treatments initiated in March 2007 as planned o Phase I study of BGC20-1259 (dementia) completed; preparations well advanced for phase IIa study in 2007 o Ex vivo study of BGC20-0582 (head lice) completed and phase II planned for 2007 o Positive phase I/II data on plevitrexed (gastric cancer) published o BGC20-0166 (sleep apnoea) continued proof of mechanism study with enrolment to finish mid-2007 o Preclinical development nearing completion for BGC20-0134 (multiple sclerosis), BGC20-1531 (migraine) and BGC 945 (solid tumours); all planned to commence clinical studies this financial year • Continuing progress with programmes licensed to third parties: o Campath(R) sBLA submitted for first-line treatment of chronic lymphocytic leukaemia; clinical hold in multiple sclerosis lifted and two phase III studies expected to commence in 2007 o Phase II dose optimisation study under way for TRX4 (type 1 diabetes) prior to phase III trial anticipated late 2007 Louise Makin, BTG's chief executive officer, commented: "BTG has made excellentprogress this year with significant momentum in our in-house and licensedpharmaceutical pipelines, which now comprise 14 clinical phase and 10preclinical development programmes. Our increasing surplus of revenues overoperating costs and significant cash position will allow us to further advanceour pipeline and build value for shareholders." For further information contact: BTG Financial DynamicsAndy Burrows, Director of Investor Relations Ben Atwell/Anna Keeble+44 (0)20 7575 1741; mobile: +44 (0)7990 530605 +44 (0)20 7831 3113Christine Soden, Chief Financial Officer+44 (0)20 7575 1591 About BTG BTG in-licenses, develops and commercialises pharmaceuticals and other medicaltechnologies. With a substantial and growing revenue stream of royalties andmilestone payments from out-licensed products, BTG continues to strengthen itspipeline of preclinical and clinical development programmes. Active in thefields of oncology, diseases of ageing, neuroscience, drug repositioning andmedical devices, BTG works from its offices in London, Philadelphia and Osakawith a global partner network of healthcare companies and researchorganisations. For further information, visit: www.btgplc.com. Chairman's statement The Group's financial performance during the past year exceeded our internaltargets. Steady growth in recurring royalty revenues and ongoing realisationsfrom the physical sciences portfolio with a further significant reduction inoperating and administrative expenses created a meaningful operating surplus toinvest in our pharmaceutical pipeline. Our internal development programmes moved forwards as planned and there was alsogood progress with several out-licensed drug programmes, including positiveoutcomes from a number of key clinical studies. We strengthened the pipeline andacquired two new drug programmes, expanding our portfolio in the pain andoncology areas as planned. A key objective we set at the beginning of the year was to build value in thepipeline through acquisition and development activities. This remains our mostimportant goal and the principal means by which we seek to create future valuefor shareholders. During the year, we determined that the value of the Varisolve(R) programmewould be considerably enhanced if we undertook the US phase II safety studyagreed with the FDA. The first treatments in the study were conducted in March2007 as planned and as the study proceeds and more patients are treated, we willreview and progress commercial options for Varisolve(R) during the currentfinancial year. Outlook BTG has made excellent progress in the past year. We have delivered a secondconsecutive year of profit, with increasing net recurring revenues and furtherreductions in costs. We made good progress with our development programmes andnow have a broad pipeline of pharmaceuticals under development. We have made a strong start to the new financial year with the announced licenceagreements for patents relating to storage capacity in semiconductor chips.These will generate at least $44m before revenue sharing and costs, and incomenet of direct costs of approximately £10m this year. We anticipate furtherrevenues from the remaining non-core portfolio, though the timing of futurerealisations is difficult to predict. We also anticipate steady growth in underlying recurring royalty revenuesresulting from increased market penetration and approvals in new indicationsfrom the marketed products. These revenues and cash flows give us the confidenceto continue moving our growing pipeline forward on a sustainable basis. We remain focused on building a valuable pharmaceutical pipeline. Whilecontinuing development of our current programmes, we are looking at a broadrange of new opportunities to expand the pipeline and build our business. Webelieve that BTG has the capabilities, resources and opportunity to become aleading life sciences company. Sir Brian Fender OPERATING REVIEW Progress in the development pipeline BTG's internal pipeline currently comprises four clinical stage programmes andsix in preclinical development, including the two newly acquired drugprogrammes. Progress across the pipeline was good, with the majority ofdevelopment milestones planned at the start of the year having been met. Varisolve(R) - varicose veins and venous stasis ulcers The phase II safety study of Varisolve(R) was initiated in the US and the firstpatients were treated in March 2007 as planned. Six or seven sites are expectedto participate in the study, the goal of which is to treat 50 patients withmoderate to severe varicose veins who also have a "shunt" in their heartsconnecting the venous and arterial systems (estimated to be present in some 25%of the population) and in whom circulating arterial bubbles are detected duringtreatment with Varisolve(R). Pre- and post-treatment MRI scans will be used tomonitor whether there are any treatment effects. As the study progresses this year and more patients are treated, BTG will reviewand progress options for maintaining development momentum and forcommercialisation of Varisolve(R). Plevitrexed - gastric, pancreatic and ovarian cancer In January 2007, the results of a phase I/II trial to investigate the efficacy,safety and tolerability of plevitrexed in patients with advanced and/ormetastatic gastric cancer were presented at an ASCO gastrointestinal cancerssymposium. The overall efficacy of plevitrexed was in line with other single agent therapyand with that of the two-drug combination cisplatin plus 5-FU as reported in arecent study. The progression-free survival and median overall survival weresimilar for plevitrexed and for those reported in the cisplatin plus 5-FUcombination study, but plevitrexed showed less toxicity and in particular lessneutropenia. BTG is seeking a development and commercialisation partner for plevitrexed. BGC20-1259 - dementia/age-related disorders This multi-functional compound is designed to be an improved therapy for thecognitive impairment aspects of dementia as well as the behavioural symptomssuch as depression and anxiety. A multiple-dose phase I study of BGC20-1259 was completed in elderly and youngvolunteers, showing that the compound is well tolerated and has apharmacodynamic profile consistent with the desired inhibition of key moleculartargets to improve cognition and alleviate depression. A positron emissiontomography study is being conducted to help select doses for further clinicalstudy and planning for the initial phase II study is well advanced. BGC20-1259has demonstrated neuroprotective effects in preclinical studies and further workto investigate this is ongoing, including a model of adult stem cellneurogenesis. BGC20-0166 - sleep apnoea Enrolment of up to 36 subjects to the clinical proof of mechanism study ofBGC20-0166 is scheduled to finish this summer. This combination of two approvedmedicines is under investigation as potentially the first pharmacologicaltreatment for sleep apnoea, the cessation of breathing disorder estimated toaffect 15-20 million adults in the US alone. Currently, the mainstay oftreatment is a positive airways pressure mask that, whilst effective, suffersfrom poor compliance. The pharmaceuticals in BGC20-0166 modulate serotonin to improve upper airwaymuscle tone and respiratory drive. BTG is planning the future regulatory andcommercial strategies for this programme pending the outcome of the study. BGC20-0582 - head lice Current insecticide treatments for head lice are not generally seen ascompletely effective or suitable for everyone, for example those based onalcohol are not recommended for people with severe eczema or asthma. Most killthe lice but some do not kill all their eggs, so repeat treatments are oftennecessary. BGC20-0582 is based on a natural compound and is potentially suitable for awider population than existing treatments, and ex vivo studies in the US haveshown it to be highly effective at eliminating both the lice and their eggs. Aphase II proof of concept study in the US is anticipated to start later thisyear, which would yield results before the end of the financial year. BGC20-0134 - multiple sclerosis Multiple sclerosis is a disease in which the nerves of the brain and spinal cordare damaged by the body's own immune system. BGC20-0134 is an immunomodulatingstructured lipid designed to rebalance cytokines released by the body's immunesystem and implicated in the inflammation and destruction of nerve sheaths. Clinical proof of mechanism was obtained with a prototype lipid compound.BGC20-0134, the optimised structured lipid, is completing preclinicaldevelopment in preparation for a phase I clinical study planned to commenceduring the second half of the current financial year. BGC20-1531 - migraine Treatment of migraine headache, the most common neurological disorder, isusually by non-steroidal anti-inflammatory drugs (NSAIDs) or serotoninreceptor-selective drugs known as triptans. Gastro-intestinal and cardiovascularside effects are associated with both classes of compound, and around 40% ofmigraine headaches do not respond to either drug class. Migraine prophylaxisremains an unmet need. BGC20-1531 selectively blocks the effects of PGE2 which is elevated in migraineattacks and responsible for activating EP4 receptors, causing blood vesseldilatation and inflammation of the surrounding tissue, and activation of thetrigeminal nerve. BGC20-1531's discrete EP4 receptor antagonism offers thepotential for improved tolerability and safety. Preclinical development isprogressing, with a phase I study planned for late 2007. BGC 945 - solid tumours Thymidylate synthase (TS) inhibitors are used as single agents or in combinationto treat cancer by disrupting DNA synthesis in tumour cells. They aretransported into tumour cells via the reduced-folate carrier, which is expressedon both normal cells and tumour cells. BGC 945 is a first-in-class, targeted TSinhibitor that is taken up into the tumour cell by the alpha folate receptor,which is over-expressed in certain tumours such as ovarian but has very lowexpression on most normal cells. BGC 945 is completing preclinical development and is anticipated to commencephase I studies towards the end of the current financial year. Acquisitions BTG acquired two new programmes during the year, both of which are currently inpreclinical development and are expected to commence first human clinical trialsin the 08/09 financial year. BTG6001 is a novel opioid agonist for post-operative pain control that wasacquired from CLL Pharma. It has a long duration of action, is orally active andhas unique structural features and a unique receptor profile that are expectedto confer significant advantages over current opiate analgesics, including asuperior side effect profile. The second programme, BTG6228, which was acquired from Bionaut Pharmaceuticals,is a novel HIF1-Alpha regulator, an oncology drug that targets tumours inwhich hypoxia is a component and includes most solid tumour types. Licensed programmes BTG's licensed programmes include ten clinical stage programmes and fourpreclinical stage programmes under development by partners. Campath(R) - chronic lymphocytic leukaemia, multiple sclerosis Campath(R) is a monoclonal antibody that targets to the CD52 antigen present onthe surface of B and T lymphocytes and other cells. It is currently approved asa treatment for B-cell chronic lymphocytic leukaemia (CLL) for patients who havebeen treated with alkylating agents and who have failed fludaribine therapy. Genzyme Corporation is undertaking a series of trials with Campath(R) to extendits use. The company has applied to extend its use to first-line treatment ofB-cell CLL, which would significantly increase the number of patients able toreceive Campath(R). Campath(R) is also being developed as a treatment for multiple sclerosis - amajor market opportunity. Detailed interim two-year results from a comparativephase II study of Campath(R) with Rebif(R) (interferon beta-1a) were presentedat an American Academy of Neurology meeting in May 2007. The data showed thatCampath(R) significantly reduced the risk for relapse and the risk forprogression of clinically significant disability compared with Rebif(R). Genzymeanticipates initiating phase III studies in 2007 following clearance by the USFood and Drug Administration (FDA). TRX4 - type 1 diabetes, psoriasis Licensed to Tolerx, Inc., TRX4 is a monoclonal antibody that binds to the CD3receptor on T cells thereby inhibiting the function of autoreactive T cells andpreventing them from propagating autoimmune diseases. In a phase II study, TRX4 was shown to preserve the function ofinsulin-producing pancreatic B cells and reduce the amount of administeredinsulin required to control blood sugar levels for a period of 18 months. Afollow-on phase II study in 80 patients has been initiated to optimise thedosing regime for a phase III trial, which Tolerx expects to commence in 2007. Juvidex(TM) - scar improvement Juvidex(TM) is a therapeutic formulation of the sugar mannose-6-phosphate,designed for intradermal injection into newly formed wounds to promote healingwith reduced scarring. A phase II trial investigating the safety, tolerability, systemic exposure andscar improvement efficacy of various doses of Juvidex(TM) was completed in late2006. The primary efficacy endpoint was not achieved but a trend for efficacy atthe highest dose was observed. Juvidex(TM) also improved healing from theearliest time points. Renovo plans to initiate another phase II trial in theskin to study efficacy in the acceleration of healing. Other clinical trials,expected to commence in late 2007 or early 2008, will investigate Juvidex(TM) aseye drops to prevent and reduce scarring in the cornea, e.g. following injury orsurgery to correct vision. AQ4N - solid tumours AQ4N (banoxantrone) is an inert pro-drug of AQ4, a potent cytotoxic withpotential use in treating multiple tumour types, either alone or in combinationwith other chemotherapeutic agents. Novacea, Inc, which has held North Americanrights to AQ4N since late 2003, acquired global rights to AQ4N in April 2007from our previous licensee, KuDOS. Novacea anticipates completing enrolment toits ongoing phase Ib clinical trial in glioblastoma multiforme, a type of braintumour, around the middle of 2007. CB7630 (abiraterone acetate) - prostate cancer Positive phase I and II data were presented on CB7630, licensed to CougarBiotechnology, Inc, at the American Association for Cancer Research meeting inApril 2007. These showed a high response rate in castration refractory prostatecancer (CRPC) and activity in post-docetaxel CRPC patients. Cougar also raised afurther $50m to apply to the continued development of CB7630 and other drugcandidates. Symadex(TM) - cancer and autoimmune diseases Xanthus Pharmaceuticals, Inc. is continuing the development of Symadex(TM) as atreatment for cancer in ongoing phase II studies. The company also reportedpreclinical data showing activity in a model of multiple sclerosis and announcedplans to initiate a clinical study in autoimmune disease. Financial results for the year ended 31 March 2007 The financial results for the year showed continued progress in BTG's business. Following a loss after tax of £35.0m in 04/05 and a profit after tax in 05/06 of£1.4m, the profit after tax achieved in 06/07 was £2.4m. During that two-yearperiod, underlying net recurring revenues have increased by 36% from £17.8m to£24.2m, while operating and administrative costs have reduced by more than 40%from £31.6m in 04/05 to £18.9m in 06/07. The improved financial performance of the Company has enabled investment inexpanding and developing its internal pipeline of pharmaceutical products. Revenues and gains Revenues comprise royalties from products marketed by licensees and the proceedsof one-off deals, settlements or milestone payments. Gross recurring royalty revenues in 06/07 were £41.3m (05/06: £39.5m). Revenuesharing with inventors on royalties received was £17.1m (05/06: £16.5m),averaging 41% of gross royalties, in line with the previous year. This resultedin net royalties of £24.2m, a 5% increase over last year (05/06: £23.0m). Thiscompared with a 29% increase last year over the prior year, when a major newrevenue stream emerged following the settlement with Zimmer Corporationregarding the hip cup patents. BeneFIX(R), the recombinant Factor IX treatment for haemophilia B, was thebiggest royalty earner and contributed gross revenues of £15.8m, the same as inthe previous year, with an underlying sales growth of 7% at contstant exchangerates. Sales of Campath(R), the monoclonal antibody licensed to treat B-cellchronic lymphocytic leukaemia for patients who have failed fludaribine therapyand have been treated with alkylating agents, increased by 4% but were adverselyimpacted by exchange movements resulting in royalties of £4.5m (05/06: £4.6m).Growth is anticipated this year if Genzyme Corporation's application to extendthe label to first line treatment of CLL is approved. The growth in recurring revenues during the year came mainly from hip cuproyalties, where our licensees, including Zimmer, achieved sales growth, andfrom royalties earned from patents licensed to the Medical Research Council. With the majority of BTG's royalties being earned in US dollars, exchange ratemovements adversely affected gross royalties compared to the prior year byapproximately £2.2m during the period. To mitigate the impact of exchangemovements, BTG places forward contracts to fix rates when dollar cash inflowsare sufficiently certain, seeking to manage exposures within a rolling 12-monthforecast period. However, the forecast rates for 07/08 show a continuation ofthe weak dollar which will impact comparative sales. One-off transactions during the year included a paid-up licence to Fresenius forgross proceeds of €4.5m or £3.0m. This was supplemented by a number of otherpaid-up licence fees, settlements and option fees. Together these generated£4.4m gross (05/06: £10.7m, including £7.5m from the settlement with Zimmer) and£2.6m after revenue-sharing (05/06: £6.5m). Patent and share sales included thereported sales of the WebNav online navigation tracking patents, the RadioFrequency ID patents and other small transactions that generated total proceedsof £5.6m (05/06: £25.3m, including £20.0m from the sale of the Teleshuttlepatents to TwinTech) and a profit on disposal of £2.7m (05/06: £11.6m). Post year-end, and contributing to profits in the 07/08 and potentially infuture financial years, BTG completed a number of transactions to monetise itsnon-core, primarily physical science assets. Semiconductor chip patents werelicensed to two companies, generating at least $44m gross revenues plus anadditional $22m if certain conditions are met and an option is exercised. BTG isseeking additional licensees for these patents. Revenues were also secured fromAQ4N being licensed by KuDOS to Novacea. The revenues from these transactionswill result in net income of some £11m in 07/08. Administrative and operating expenses Following the major restructuring of BTG's business and operations over the pasttwo years, administrative and operating expenses at £18.9m (05/06: £24.3m) havestabilised significantly below the £21m target level set for the year. Operatingexpenses made up £2.4m (05/06: £7.5m) of this total and comprised amortisationand impairment costs of £1.9m (05/06: £3.9m), patent renewal fees of £0.4m (05/06: £0.7m) and litigation costs of £0.1m (05/06: £2.9m). Staff costs were £10.1m (05/06: £11.5m) reflecting the reduction in headcount. A£0.3m exchange loss compared with an exchange gain last year of £1.5m. There were no restructuring costs in the year (05/06: £4.6m) and the group wasable to release £1.0m from provisions for onerous leases (05/06: £0.9m) havingsigned an agreement to sublet unused leased space in its London and Philadelphiaoffices. This, together with rental and other associated payments made in theyear, has had the effect of reducing provisions in respect of future leasepayments from £4.6m to £1.7m. The impact of these sublettings will improve cashflows over the remaining lease terms but will have a neutral impact on profits. Research and development Group research and development costs were £9.7m compared with £9.1m in theprevious year. The investment in Varisolve(R) was £3.5m, £1.0m lower than in theprevious year when a one-off payment was made for profit mark-ups foregone on asecondary manufacturing contract. This year's costs included expenses associatedwith the US phase II safety study and maintaining the manufacturing supplychain. £5.5m was invested in other programmes under internal development (05/06:£3.6m). BGC20-1259, the multifunctional compound targeting dementia, was thelargest investment after Varisolve(R). BGC20-1259 completed phase I clinicalstudies and another study was initiated to determine the optimum dose for phaseIIa. Costs relating to BGC 945 reflected progression through late preclinicaltowards an application to commence phase I studies. Plevitrexed completed a phase I/II study in patients with advanced gastriccancer and BTG is currently seeking a development and commercialisation partner.Investment in the migraine treatment BGC20-1531 increased as preclinical studiesprogressed in preparation for a planned phase I study this year. Other costsrelated to the proof of mechanism study of BGC20-0166 in sleep apnoea, the exvivo study of BGC20-0582, a novel head lice treatment, and several early stageprogrammes. The balance of the R&D expenses of £0.7m (05/06: £1.0m) related to BTG's shareof the losses of certain associate companies in which BTG has an investment. Investments An impairment charge of £1.0m was taken following an assessment of the likelyrealisable value of certain investments. Financial income and tax BTG's cash balances are invested in short-term and call deposits. Interestearned on deposits averaged 4.8% during the year. The tax charge relates to certain withholding taxes on royalty income that arenot relievable under double-taxation treaties. Profit for the year and earnings per share BTG made a profit after tax for the year of £2.4m (05/06: £1.4m) compared with aloss of £35.0m two years ago. Earnings per share grew to 1.6p from 1.0p last year based on an average 149.5mshares in issue (05/06: 146.6m). Position at year end Total assets less total liabilities at 31 March 2007 were £47.3m, an increase of£5.1m in the year. Non-current assets Non-current assets reduced by £2.1m to £22.5m. Intangible assets were £7.6m withadditions of £3.0m being offset by disposals of £0.6m and amortisation chargesof £1.9m. The intangible assets held, mostly patents, are written off over theremaining life of the patent or their useful economic life if shorter and aresubject to regular impairment reviews. The net book value of the Group's property, plant and equipment reduced by £0.9mto £8.7m through depreciation and currency movements. The major asset held isthe Wrexham secondary-manufacturing plant for Varisolve(R) which is still in thecourse of construction and as such is not yet depreciated. The investment in associates reduced from £2.7m to £1.2m, reflecting lossesincurred in those companies plus additions and impairment charges. Theassociates are private companies engaged in research and development.Mesophotonics Ltd is developing technologies in photonic crystal nano devicesand Senexis Ltd is developing small molecule drugs in the CNS space. Otherinvestments represent holdings in companies where BTG owns under 20% of theshare capital and investments in a number of venture capital funds. The largestindividual investment is in Xention Discovery Limited, a drug discovery companyfocused on ion channels. In total BTG invested £0.8m in these companies andfunds during the year (05/06: £1.9m). Commitments to follow-on funding of theinvestment portfolio stood at £2.3m as at 31 March 2007. Current assets, current and non-current liabilities The trade and other receivables were £10.5m at 31 March 2007, compared to £10.1mat the prior year end. Current liabilities at £21.9m reduced from £30.6m at the previous year end.Significant changes included the payment of £7.0m in respect of unpaid costs onthe Teleshuttle deal concluded near the end of the previous year and a reductionin the provisions for onerous leases and other restructuring items. Non-current liabilities at £6.8m reduced from £12.9m at the previous year endand include £5.7m in respect of the net deficit on the Company's defined benefitpension plan, down from £9.6m at the end of last year, reflecting actuarialgains and the cash contributions to the scheme made by the Company. A deficitrepair schedule has been agreed with the trustees of the pension plan to paydown the deficit over the next five years. The balance represents provisionslargely against future liabilities on onerous leases and trade and otherpayables. Cash The net cash and cash equivalents were £43.0m at 31 March 2007, down from £51.0mat 31 March 2006. As anticipated in last year's report, some £7.0m of the £51.0mwas paid out at the start of the year in respect of liabilities on theTeleshuttle deal signed at the end of the previous year. The reduction in "freecash" during the year was therefore £1.0m. The major reconciling items between the Company's profit before tax for the yearof £2.6m and its cash outflow of £8.0m are: settlement of prior year Teleshuttleliabilities of £7.0m, investments in non-current assets of £3.3m, additionalcontributions to the Group's pension scheme of £2.2m, payments of leasecommitments already provided for of £1.8m and adverse working capital movementsand other payments of £1.6m, offset by the impact of non-cash income statementcharges of £4.5m and proceeds from the issue of shares of £0.8m. Consolidated income statement for the year ended 31 March 2007 Year ended 31 March Year ended 31 March Note 2007 2006 £m £m Revenue 2 45.7 50.2Revenue sharing (18.9) (20.7) _____ _____Revenue net of revenue sharing 26.8 29.5 _____ _____ Operating and administrative expenses 3 (18.9) (24.3)Restructuring 4 1.0 (3.7) _____ _____Operating expenses (17.9) (28.0) _____ _____ Varisolve(R) development (3.5) (4.5)Other research and development (5.5) (3.6)Share of results of associates (0.7) (1.0) _____ _____Research and development expenses (9.7) (9.1) _____ _____ Profit on disposal of assets and investments 5 2.7 11.6Amounts written off associates and investments (1.0) (4.2) _____ _____ 1.7 7.4 _____ _____ Operating profit/(loss) 6 0.9 (0.2) _____ _____ Financial income 1.8 1.7Financial expense (0.1) - _____ _____Net financial income 1.7 1.7 _____ _____ Profit before tax 2.6 1.5Tax (0.2) (0.1) _____ _____Profit after tax for the year 2.4 1.4 _____ _____Attributable to:Equity holders of the parent 2.4 1.5Minority interest - (0.1) _____ _____Profit after tax for the year 2.4 1.4 _____ _____ Basic and diluted earnings per share 7 1.6p 1.0p _____ _____ Consolidated balance sheetas at 31 March 2007 31 March 31 March Note 2007 2006 £m £m Non-current assetsIntangible assets 7.6 7.1Property, plant & equipment 8.7 9.6Investments in associates 1.2 2.7Other investments 5.0 5.2 _____ _____ 22.5 24.6 _____ _____ Current assetsTrade and other receivables 10.5 10.1Cash and cash equivalents 43.0 51.0 _____ _____ 53.5 61.1 _____ _____Total assets 76.0 85.7 _____ _____ EquityShare capital 8 15.1 15.0Share premium account 8 187.0 186.3Other reserves 8 (0.9) 1.5Retained earnings 8 (153.9) (160.6) _____ _____Equity attributable to equity holders of the parent 47.3 42.2Minority interest 8 - - _____ _____Total equity 47.3 42.2 _____ _____Non-current liabilitiesTrade and other payables 0.7 0.9Employee benefits 5.7 9.6Provisions 9 0.4 2.4 _____ _____ 6.8 12.9 _____ _____ Current liabilitiesTrade and other payables 20.6 28.4Provisions 9 1.3 2.2 21.9 30.6Total liabilities 28.7 43.5Total equity and liabilities 76.0 85.7 Consolidated cash flow statementfor the year ended 31 March 2007 Year ended 31 March Year ended 31 March 2007 2006 £m £m Profit before tax 2.6 1.5Profit on disposal of intangible assets and investments (2.7) (11.7)Loss on sale of property, plant & equipment - 0.1Amounts written off associates and investments 1.0 4.2Investment income (1.8) (1.7)Interest expense 0.1 -Amortisation and impairment of intangible assets 1.9 3.9Depreciation on property, plant & equipment 0.9 0.9Share-based payments 0.8 0.8Pension scheme funding (1.9) (2.1)Increase in trade and other receivables (0.4) (1.8)(Decrease)/increase in trade and other payables (0.8) 2.0Decrease in provisions (2.9) (3.0)Share of associates' losses 0.7 1.0Other (0.3) (1.0) _____ _____Cash used in operations (2.8) (6.9)Interest expense (0.1) -Taxation paid (0.2) (0.1) _____ _____Net cash outflow from operating activities (3.1) (7.0) _____ _____Investing activitiesInterest received 2.0 1.6Purchases of intangible assets (2.5) (1.3)Proceeds on disposal of intangible assets 5.0 19.6Payments made in relation to disposal of intangible assets (10.0) -Investment in associates (0.2) (0.7)Expenditure on investments (0.6) (1.1)Proceeds on disposal of investments 0.9 1.0 _____ _____Net cash (outflow)/inflow from investing activities (5.4) 19.1 _____ _____Cash flows from financing activitiesProceeds of share issues 0.8 4.3 _____ _____Net cash from financing activities 0.8 4.3 _____ _____(Decrease)/increase in cash and cash equivalents (7.7) 16.4Cash and cash equivalents at start of year 51.0 34.5Effect of exchange rate fluctuations on cash held (0.3) 0.1 _____ _____Cash and cash equivalents at end of year 43.0 51.0 _____ _____ Consolidated statement of recognised income and expensefor the year ended 31 March 2007 Year ended 31 March Year ended 31 March 2007 2006 £m £m Foreign exchange translation differences (0.7) (0.1)Actuarial gain/(loss) on pension liabilities 2.0 (1.6)Change in fair value of equity securities available-for-sale (0.3) (2.0)Deferred tax due on revaluation of equity securities - 0.2available-for-sale _____ _____Net income/(expense) recognised directly in equity 1.0 (3.5)Profit for the year 2.4 1.4 _____ _____Total recognised income and expense for the year 3.4 (2.1) _____ _____ Attributable to:Equity holders of the parent 3.4 (2.0)Minority interest - (0.1) _____ _____ 3.4 (2.1) _____ _____ 1 Financial Information The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31 March 2007 or 2006 but is derived fromthose accounts. Statutory accounts for the year ended 31 March 2006 have beendelivered to the registrar of companies, and those for the year ended 31 March2007 will be delivered in due course. The auditors have reported on thoseaccounts; their reports were (i) unqualified, (ii) did not include references toany matters to which the auditors drew attention by way of emphasis withoutqualifying their reports, and (iii) did not contain statements under section 237(2) or (3) of the Companies Act 1985. 2 Business segments Segment information is presented in respect of the Group's business segmentsbased on the Group's management and internal reporting structure. Inter-segment pricing is determined on an arm's length basis. Revenue Year ended 31 Year ended 31 March March 2007 2006 £m £mLife sciences 45.0 46.4Technology commercialisation 0.7 3.8 ____ ____ 45.7 50.2 ____ ____ Result Year ended 31 Year ended 31 March March 2007 2006 £m £mLife sciences 5.0 5.7Technology commercialisation (1.4) 1.4 _____ _____ 3.6 7.1Restructuring 1.0 (3.7)Unallocated expenses (3.7) (3.6) _____ _____Operating profit/(loss) 0.9 (0.2)Net financing income 1.7 1.7 _____ _____Profit before tax 2.6 1.5Income tax expense (0.2) (0.1) _____ _____Profit for the year 2.4 1.4 _____ _____ 3 Operating and administrative expenses Year ended 31 Year ended 31 March March 2007 2006 £m £m Amortisation and impairment of intangible assets 1.9 3.9Patent renewal fees 0.4 0.7Litigation costs 0.1 2.9 _____ _____ 2.4 7.5Staff costs 10.1 11.5Other administrative expenses 6.1 6.8Exchange losses/(gains) 0.3 (1.5) _____ _____ 18.9 24.3 _____ _____ 4 Restructuring Year ended 31 Year ended 31 March March 2007 2006 £m £mProvision for onerous leases (note 9) (1.0) (0.9)Restructuring costs - 4.6 _____ _____ (1.0) 3.7 _____ _____ Upon the subletting of empty premises in each of the financial years, therequirement for provisions for onerous leases was reduced. 5 Profit on disposal of assets and investments Year ended 31 Year ended 31 March March 2007 2006 £m £mProfit on disposal of patents* 2.1 11.0Profit on disposal of investments 0.6 0.7Loss on sale of property, plant & equipment - (0.1) _____ _____ 2.7 11.6 _____ _____ * The profit for the year ended 31 March 2007 is net of £1.6m (05/06: £4.9m)shared with the inventive source. Loss relief has absorbed the tax due in respect of the profit on the disposals. 6 Operating profit/(loss) Operating profit/(loss) has been arrived at after charging/(crediting): Year ended 31 Year ended 31 March March 2007 2006 £m £mAuditors' remuneration: - Group audit fee payable to KPMG Audit Plc 0.1 0.1 - Fees payable to KPMG Audit Plc for taxation and other services 0.1 0.1Depreciation and other amounts written off property, plant & equipment 0.9 0.9Amortisation and impairment of intangible assets 1.9 3.9Net foreign exchange losses/(gains) 0.3 (1.5)Research and development costs 9.7 9.1Staff costs 10.1 11.5Operating lease rentals payable: - property 3.0 3.2 - plant and equipment - 0.1 7 Earnings per share The calculation of basic earnings per share at 31 March 2007 was based on theprofit attributable to ordinary shareholders of £2.4m (05/06: £1.5m) and aweighted average number or ordinary shares outstanding during the year of 149.5m(05/06: 146.6m), diluted earnings per share 149.9m (05/06: 147.9m), calculatedas follows. Year ended 31 Year ended 31 March March 2007 2006 Profit for the financial year after minority interests (£m) 2.4 1.5Profit per share (p)Basic 1.6 1.0Diluted 1.6 1.0 _____ _____ Number of shares (m)Weighted average number of shares - basic 149.5 146.6Effect of share options on issue 0.4 1.3 _____ _____Weighted average number of shares - diluted 149.9 147.9 _____ _____ 8 Capital and reserves Share Share Other Retained Total Minority Total capital premium reserves earnings interest equity £m £m £m £m £m £m £m At 1 April 2005 14.8 182.2 2.6 (160.7) 38.9 0.1 39.0Foreign exchange - - (0.1) - (0.1) - (0.1)translation differencesActuarial loss on pension - - - (1.6) (1.6) - (1.6)liabilitiesChange in the fair value of - - (1.8) - (1.8) - (1.8)equity securitiesavailable-for-sale (net)Profit for the year - - - 1.5 1.5 (0.1) 1.4Total recognised income and - - (1.9) (0.1) (2.0) (0.1) (2.1)expenseMovement in shares held by - - - 0.2 0.2 - 0.2TrustShare based payments - - 0.8 - 0.8 - 0.8Share capital issued 0.2 4.1 - - 4.3 - 4.3 _____ _____ _____ _____ _____ _____ _____At 31 March 2006 15.0 186.3 1.5 (160.6) 42.2 - 42.2Foreign exchange - - (0.7) - (0.7) - (0.7)translation differencesActuarial gain on pension - - - 2.0 2.0 - 2.0liabilitiesChange in the fair value of - - (0.3) - (0.3) - (0.3)equity securitiesavailable-for-sale (net)Profit for the year - - - 2.4 2.4 - 2.4Total recognised income and - - (1.0) 4.4 3.4 - 3.4expenseMovement in shares held by - - - 0.1 0.1 - 0.1TrustTransfer of reserves - - (1.4) 1.4 - - -Share based payments - - - 0.8 0.8 - 0.8Share capital issued 0.1 0.7 - - 0.8 - 0.8 _____ _____ _____ _____ _____ _____ _____At 31 March 2007 15.1 187.0 (0.9) (153.9) 47.3 - 47.3 _____ _____ _____ _____ _____ _____ _____ 9 Provisions 2007 2006 £m £mAt 1 April 4.6 7.6Provisions made during year - 0.1Provisions utilised during year (1.8) (2.3)Provisions released during year (1.0) (0.9)Difference on exchange (0.1) 0.1 _____ _____At 31 March 1.7 4.6 _____ _____ Balance due within one year 1.3 2.2Balance due after more than one year 0.4 2.4 _____ _____ 1.7 4.6 _____ _____ These provisions relate to onerous leases and represent the net present value offuture obligations, not covered by income from tenants, both in the UK and USoffices of the Group. 10 Post balance sheet events In April 2007 BTG granted licences to patents relating to storage capacity insemiconductor chips for gross payments of $46m before deduction of revenuesharing and other direct costs. Of the payments due, $17m is receivable before31 March 2008 with a further $29m ($2m of which being subject to BTG satisfyingcertain performance conditions) payable in instalments by December 2009. One ofthe licences also includes an option to license additional patents which thelicensee may exercise for an additional gross payment of $20m. In addition, BTG signed an agreement with Novacea, Inc. and KuDOSPharmaceuticals Ltd, a wholly owned subsidiary of AstraZeneca UK Ltd, regardingthe anti-cancer pro-drug AQ4N. Under the terms of the agreement BTG is due asignature fee and Novacea was granted additional rights to AQ4N. BTG is alsoentitled to future milestone and royalty payments. BTG expects to include revenues net of revenue sharing and other direct costs ofapproximately £11m in relation to these transactions in its results for the yearended 31 March 2008. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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