BTG plc: Close Period Update
London, UK, 31 March 2006: BTG plc (LSE: BGC), the medical innovations company, today issued the following update for the year ending 31 March 2006 ahead of the planned announcement of the Preliminary Results on 25 May 2006.
Following the strategic review announced in May 2005, significant advances have been made in increasing royalty income from marketed products, reducing costs and realising income from the commercialisation or sale of intellectual property assets relating to physical sciences inventions. Good progress has also been made in strengthening the drug development pipeline. The year-end cash position is expected to be ahead of that at the start of the financial year.
BTG has today announced the sale of its rights to Teleshuttle Technologies' web-enabled software updating, active desktop and offline browsing patents to TwinTech E.U. LLC, based in Delaware, USA (see separate announcement). BTG will receive an immediate payment of $35 million plus a share of future profits earned by TwinTech E.U. from commercialising these patents. After revenue sharing, legal expenses and writing-off capitalised patent filing and prosecution costs, the levels of all of which are still being determined, BTG anticipates that its net gain in respect of the sale of the Teleshuttle patents should exceed $15 million.
The growth in royalty income from marketed products over the full year is anticipated to match that reported at the half year. Other revenues include one-off revenues from a series of deals, the most significant being: the settlement with Zimmer on royalties on the two part hip cup patents; the sale of patents relating to radio frequency identity tagging (RFID); settlements with three companies in respect of the WebNav software patents (the most recent being with Amazon.com); an option on certain explosives detection patents and the sale of the Teleshuttle patents.
The significant savings in operating costs targeted at the start of the year are expected to have been met, and for the 2006/7 financial year the net recurring royalty streams should exceed operating and administrative costs.
The Company is expecting to write down the value of certain of its venture investments. One private company has failed to attract the commercial deals anticipated, thus impairing its value. The value of BTG's investment in SAMSys Inc., the Canadian-listed RFID company, has recently declined markedly. Should these declines in value be considered to represent permanent diminutions in value then a charge of around £4 million will be taken through the income statement for the year ended 31 March 2006.
Within the development pipeline, the Phase II study of plevitrexed (BGC 9331), targeting gastric cancer, is now fully recruited. Recruitment is underway for a clinical proof of mechanism study of BGC 20-0166, targeting sleep apnoea, and a Phase I study has now commenced for BGC 20-1259, a triple-action potential treatment for Alzheimer's disease. Significant progress has also been made with products under development by licensees, including Campath ®, for which encouraging efficacy results were obtained in a Phase II trial in multiple sclerosis, and TRX4, a monoclonal antibody that was shown to significantly reduce insulin requirements for people with new-onset type-1 diabetes. In total, BTG's pipeline now comprises five unlicensed and nine licensed products in clinical development.
Discussions continue with a number of parties over partnering Varisolve ®, the microfoam treatment for varicose veins. In addition, preparations are being made for the Phase II study approved by the US Food & Drug Administration when it lifted the clinical hold in July 2005. This study is unlikely to commence until partnership discussions are more advanced.
Louise Makin, CEO, commented:
“We are very pleased with progress this year. It has been satisfying to realise such good returns from our physical sciences assets, particularly the Teleshuttle transaction.
BTG is becoming further established as a developer of early-stage clinical assets. We are starting the new financial year with a strong cash position, a healthy pipeline of clinical and preclinical programmes and a broad portfolio of revenue generating products.”
Christine Soden, Chief Financial Officer
+44 (0)20 7575 1591
Andy Burrows, Director of Investor Relations
+44 (0)20 7575 1741
+44 (0)20 7831 3113
BTG in-licenses, develops and commercialises pharmaceuticals and other medical technologies. With a substantial and growing revenue stream of royalties and milestone payments from out-licensed products, BTG continues to strengthen its pipeline of preclinical and clinical development programmes. Active in the fields of oncology, diseases of ageing, neuroscience, drug repositioning and medical devices, BTG works from offices in London, Philadelphia and Osaka through a global partner network of healthcare companies and research organisations. For further information, visit: www.btgplc.com.Back to press releases