BTG PLC BTG Half Yearly Report

  BTG PLC (BTG) - Half Yearly Report

RNS Number : 6075Q
BTG PLC
08 November 2012




                           BTG plc: Interim Results



London, UK, 8 November 2012: BTG plc (LSE: BTG), the specialist healthcare
company, today announces its interim results for the six months ended 30
September 2012.



  Financial highlights



━ Revenue 30% higher at £143.4m (H1 11/12: £110.6m)

━ Gross profit 33% higher at £105.3m (H1 11/12: £79.4m)

━ Underlying operating profit^1 45% higher at £59.5m (H1 11/12: £41.1m)

━ Profit after tax for the period 44% higher at £18.3m (H1 11/12: £12.7m)

━ Basic earnings per share increased by 44% to 5.6p (H1 11/12: 3.9p)

━ Cash and cash equivalents, together with cash on fixed term deposits, of
£150.7m at 30 September 2012 (31 March 2012: £111.9m)

  

  Strong operating progress



━ Specialty Pharmaceuticals

━ Strong performance from CroFab^®(crotalidae polyvalent immune fab (ovine))
and DigiFab^® (digoxin immune fab (ovine))

━ Voraxaze^® (glucarpidase) launched in the US

━ Interventional Medicine

━ Varisolve^® (polidocanol endovenous microfoam (PEM)) well advanced towards
US NDA submission

━ Good start to selling LC Bead™ in the US

━ DC Bead^® regulatory submission accepted for review in China

━ Licensing & Biotechnology

━ Marketing applications submitted by Johnson & Johnson for Zytiga^®
(abiraterone acetate) in the US and EU, to extend use to chemo-naïve patients

━ Lemtrada™ (alemtuzumab) marketing application for multiple sclerosis
submitted in the EU by Genzyme/Sanofi



Louise Makin, BTG's CEO, commented:



"BTG's excellent financial performance reflects the continued transition to a
commercially led specialist healthcare business. These results benefited from
a good performance from CroFab^®, continued geographic expansion of DigiFab^®
and the US launch of Voraxaze^®. We are also starting to see the positive
financial impact of selling LC Bead™ directly in the US.



Following positive Varisolve^® Phase III data we are completing the NDA
dossier and have formed a commercial launch team to prepare for an anticipated
H1 2014 launch. Our DC Bead^® dossier has been accepted for review in China
and we have a clear pathway to potential approval in Japan.



We continuously evaluate a wide variety of opportunities to add both marketed
products and late-stage programmes to our existing portfolios. With our strong
balance sheet and sustainable cash generation, we are well positioned to
continue to execute our growth strategy both organically and by acquisition."



^1 Operating profit before acquisition adjustments and reorganisation costs



For further information contact:



BTG                                             FTI Consulting
Andy Burrows, Director of Investor Relations    Ben Atwell/Simon Conway

+44 (0)20 7575 1741; Mobile: +44 (0)7990 530605 +44 (0)20 7831 3113



Rolf Soderstrom, Chief Financial Officer

+44 (0)20 7575 0000



A meeting for analysts will take place today at 9.30am at FTI Consulting. For
details, please call Mo Noonan on +44 (0)20 7269 7116.



        About BTG

BTG is an international specialist healthcare company that is developing and
commercialising products targeting critical care, cancer and other disorders.
The Group is seeking to acquire new products to develop and market to
specialist physicians, and is building a sustainable business financed by
revenues from sales of its own marketed products and from royalties and
milestone payments on partnered products.





OVERVIEW



FINANCIAL REVIEW

Revenue increased by 30% to £143.4m (H1 11/12: £110.6m), reflecting a strong
performance from CroFab^® and DigiFab^®, the US launch of Voraxaze^®, the
transition to direct sales of LC Bead™ in the US and a strong contribution
from the Licensing & Biotechnology business segment.



The key contributors to revenue were:



Business segment       Product                    H1 12/13  H1 11/12    Change
                                                      (£m)      (£m)       (%)
Specialty              CroFab^®                       50.5      41.2       +23
Pharmaceuticals
                       DigiFab^®                      11.5       8.9       +29

                       Voraxaze^®/other               5.5      1.9      +189
                                                      67.5      52.0       +30
Interventional         LC Bead™/DC Bead^®             13.7       8.9       +54
Medicine
                       Brachytherapy products         4.0      4.2        -5
                                                      17.7      13.1       +35
Licensing &            Zytiga^®                       23.4       4.3      +444
Biotechnology
                       BeneFIX^®                      14.0      16.0       -13

                       Two-part hip cup                6.1       5.7        +7

                       Other recurring royalties       8.6       9.7       -11

                       Milestones/one-offs          6.1    9.8       -38
                                                     58.2     45.5       +28
Total revenue                                        143.4     110.6       +30



Gross margin, at 73% (H1 11/12: 72%), delivered a 33% increase in gross profit
to £105.3m (H1 11/12: £79.4m).



Operating profit of £26.2m (H1 11/12: £16.9m) includes a total of £26.0m of
impairment charges against acquired intangible assets (H1 11/12: £12.4m) and
£1.8m of impairment charges against property, plant and equipment (H1 11/12:
£3.0m). The Group's underlying operating profit, excluding acquisition
adjustments and reorganisation costs of £33.3m, was £59.5m (H1 11/12: £41.1m,
excluding adjustments and costs of £24.2m).



Profit before tax increased to £27.7m (H1 11/12: £19.5m). Cash and cash
equivalents, together with cash on fixed term deposits, increased to £150.7m
at 30 September 2012 (31 March 2012: £111.9m).



  Specialty Pharmaceuticals

Revenue of £67.5m compares with £52.0m earned in the six months to 30
September 2011. Revenue in the Specialty Pharmaceuticals operating segment is
first-half weighted as the highest concentration of snake bites is seen in the
months March to October and demand for CroFab^® is therefore at its highest
around this period. There are typically around 6,000 treated envenomations
from snake bites per year in the US. Underlying revenue growth for CroFab^® is
generally mid-single digit. During the period, wholesaler inventories were
higher than in the prior period, which together with modest price increases
contributed to the strong performance.



Revenue in the current period has benefited from the approval of Voraxaze^® in
the US which was commercially launched in April and is being sold through
BTG's own Specialty Pharmaceuticals sales force. Overall within Specialty
Pharmaceuticals there was a positive impact of £2.0m from the movement in the
UK£:US$ exchange rate.



Gross margin at 77% (H1 11/12: 75%) is slightly higher than in the prior year
and has benefited from positive exchange rate movements and the launch of
Voraxaze^®. Selling, general and administrative expenses (SG&A) increased to
£9.2m from £8.1m in the prior period, reflecting investment associated with
the launch of Voraxaze^®.



  Interventional Medicine

Revenue increased to £17.7m (H1 11/12: £13.1m) predominantly as a result of
the transition to direct sales of LC Bead™ in the US.



Gross profit of £14.5m increased from £8.0m in the prior period, representing
an increase in gross margin to 82% from 61% in the prior period, which was
adversely affected by a £2.1m fair value acquisition accounting adjustment
relating to inventory.



As anticipated, SG&A expenses were higher than in the previous period at £7.2m
(H1 11/12: £4.7m), reflecting the investment in the US sales force and
associated support functions to effect direct sales of LC Bead™.



  Licensing & Biotechnology

Revenue of £58.2m, £12.7m ahead of the prior period, reflected recurring
royalty revenues of £52.1m (H1 11/12: £35.7m) and one-off milestone income of
£6.1m (H1 11/12: £9.8m). Within recurring revenue the most significant
contributor was Zytiga^® at £23.4m (H1 11/12: £4.3m), marketed by the Janssen
Pharmaceutical Companies of Johnson & Johnson. A £14.0m final royalty payment
has been received relating to BeneFIX^®, concluding the royalties received by
BTG on sales of inventory held by Pfizer at the patent expiry date (H1 11/12:
£16.0m). Other royalty streams have performed broadly in line with
expectations for the period.



Subsequent to the announcement on 8 August 2012 that AZD9773 (CytoFab^™) had
not met the endpoints of a Phase IIb study, resulting in AstraZeneca's
decision to discontinue development, the total remaining deferred income
associated with previously received milestones of £5.4m was released to the
income statement. The total amount of deferred income released in the period
was £6.1m (H1 11/12: £0.7m).



The gross margin of 66% (H1 11/12: 72%) reflects the mix of licences
contributing to revenue, as each of the royalty streams has its own onwards
payment obligation to the original inventors. Excluding AZD9773 and the final
BeneFIX^® royalty, the gross margin would be 52%, which is indicative of the
anticipated gross margin in this business segment in future periods.



SG&A in this segment includes the overheads specific to the management of the
royalty business but also some centrally managed support functions and
corporate costs. This has increased by £3.2m to £11.1m in the period.



  Research and development

Expenditure on research and development of £17.0m (H1 11/12: £19.0m) related
principally to PEM, investment in the PRECISION and PARAGON pre-loaded
drug-eluting bead programmes and lifecycle management for marketed products.
Expenditure is expected to be higher in the second half of the year as
investment continues in PEM NDA submission activities and pre-launch
manufacturing, together with development programmes supporting the Bead
products. Over the full year, expenditure is expected to be in line with
guidance at around £40m.



  Operating profit

Before acquisition adjustments and reorganisation costs, the Group achieved an
operating profit of £59.5m (H1 11/12: £41.1m), reflecting the additional
profit contributions from the three operating segments. Acquisition
adjustments and reorganisation costs of £33.3m (H1 11/12: £24.2m) included
impairment charges of £26.0m (H1 11/12: £12.4m) that related principally to
the Group's carrying value of AZD9773 in the current period and the GLP-1
development stage asset in the prior period. An impairment charge of £1.8m has
also been taken against the tangible fixed assets associated with AZD9773.



  Net financial income

Net financial income of £1.5m (H1 11/12: £2.6m) includes £0.6m interest
received on cash deposits and a gain of £0.8m (H1 11/12: loss of £1.5m) in the
mark-to-market of foreign exchange forward contracts. Additional fair value
gains were recorded in the prior year period of £3.9m in relation to
Contingent Value Notes and borrowings.



  Profit before tax

The reported profit before tax increased by 42% to £27.7m (H1 11/12: £19.5m).
This primarily reflects an increased profit contribution from the Group's
operating segments of £19.1m and £2.0m lower R&D investment, offset by higher
amortisation and impairments of acquired intangible assets of £12.9m.



  Tax

The tax charge in the period reflects the anticipated full-year effective tax
rate of 34%. The tax charge of £9.4m (H1 11/12: £6.8m) includes current tax of
£3.7m (H1 11/12: £4.8m) that mainly relates to the UK, where taxable profits
are anticipated to arise in subsidiary companies that do not have
brought-forward tax losses. Deferred tax of £5.7m (H1 11/12: £2.0m)
principally reflects the reduction of deferred tax assets as the Group
continues to utilise its brought-forward US tax losses, offset by a reduction
in the deferred tax liability recognised on acquired intangible assets as
these assets are amortised or impaired.



  Earnings per share

Basic earnings per share were 5.6p (H1 11/12: 3.9p) on the profit after tax of
£18.3m (H1 11/12: £12.7m). The basic underlying earnings per share, excluding
acquisition adjustments and reorganisation costs, were 11.2p (H1 11/12: 7.7p).



  Balance sheet

Current assets have increased by £48.9m since 31 March 2012 to £223.2m at 30
September 2012. This increase includes a net £38.8m increase in cash and held
to maturity financial assets (which represent fixed-term cash deposits). An
increase of £11.3m in receivables is principally due to incremental additional
accrued royalties on Zytiga^®.



Non-current assets have reduced from £331.5m at 31 March 2012 to £302.9m at 30
September 2012. The principal movements are: amortisation, impairments and
depreciation of £37.9m; additions of £6.4m, including £3.1m for the Beads and
PEM manufacturing facility and £1.8m in respect of EU distribution rights to
Wellstat's uridine triacetate development asset; recognition of a pension
asset of £4.0m; and a net foreign exchange loss of £1.1m arising on
retranslation of foreign currency denominated assets.



The Group's defined benefit pension fund liability, as measured under IAS19 -
Employee Benefits, has moved from a liability of £0.1m at 31 March 2012 to an
asset of £4.0m at 30 September 2012. The principal movements are cash
contributions by the company of £2.3m and actuarial gains of £2.0m, offset by
an income statement charge of £0.2m. The actuarial deficit at 31 March 2010,
the date of the last formal valuation and measured in accordance with
guidelines set by the Pensions Regulator, was £13.9m.



Current and non-current liabilities have decreased by £0.6m in the six month
period. The principal movements are release of the deferred income associated
with AZD9773 of £6.1m and other working capital movements within trade
payables of £2.1m, offset by the recognition of an additional £1.2m current
tax liability and an increase in the deferred tax liability of £6.6m.



  Cash flow

The Group's operating profit of £26.2m (H1 11/12: £16.9m) was converted to net
cash inflow from operating activities of £44.7m (H1 11/12: £24.9m). Non-cash
income statement charges for depreciation, amortisation, impairments and
share-based payments totalling £40.1m (H1 11/12: £27.3m) have been partially
offset by additional cash contributions to the defined benefit pension fund of
£2.0m (H1 11/12: £3.0m) and a working capital outflow of £17.4m (H1 11/12:
£16.2m). Tax payments of £2.2m have been paid in the period (H1 11/12: £0.1m).
Of the working capital movements the most significant movement is within trade
and other receivables which, as explained above, are higher at 30 September
2012 due principally to incremental accrued royalties in respect of Zytiga^®.



The Group's investing activities include the purchase of the Beads and PEM
manufacturing site in the UK for £3.1m plus other capital expenditure around
the Group's manufacturing sites of £1.2m, and the purchase of EU commercial
rights to Wellstat's uridine triacetate for an initial payment of US$3.0m.



The net cash inflow for the period was £39.0m, resulting in a closing cash
balance of £145.7m. The seasonality of the business, with a concentration of
income from CroFab^® in the first half of the year, means that management does
not expect to match this level of cash inflow in the second half of the year.



OPERATING REVIEW



  Specialty Pharmaceuticals

The Specialty Pharmaceuticals business has had a strong first half, with a
good performance from CroFab^® and DigiFab^® and the addition of Voraxaze^®.



Following its approval in January 2012, Voraxaze^® was launched nationwide in
the US in April 2012. This product is an antidote to life-threatening toxicity
associated with the use of the chemotherapy treatment high-dose methotrexate
in patients with renal impairment. This occurs on average in around 200 to 300
patients per year in the US. An education campaign at launch has enabled fast
penetration of this niche market, for which BTG estimates annual US peak sales
of around $15m in the US and $10m additional revenue from other markets.
Non-US revenues currently arise from named patient sales although BTG is
exploring potential pathways for regulatory approvals in other territories.



The Centers for Medicare & Medicaid Services has granted a temporary New
Technology Add-on Payment (NTAP) for Voraxaze^®, effective 1 October 2012,
under which the US government will pay up to 50% of the cost of Voraxaze^® to
hospitals in addition to the standard diagnosis-related group (DRG)
reimbursement payment. Voraxaze^® is only the third drug product to qualify
for an NTAP since the scheme was launched. The NTAP will help hospitals cover
costs associated with the use of Voraxaze^® and will last two to three years
until the standard DRGs are recalibrated to include this new technology.



DigiFab^® revenues continue to benefit from the withdrawal last year of the
only competitor product; hence growth has been faster than the average
mid-to-high single digit percentage.



BTG is implementing a leadership strategy for these products, which aims to
forge strong relationships with the healthcare community and to facilitate
appropriate stocking and usage of BTG's antidote products by investing in
physician education, product enhancements and added value services. Examples
include help with navigating reimbursement procedures and support for the
Annals of Emergency Medicine Resource Center, an online resource for
clinicians and toxicologists involved in the treatment and management of
poisoning and the selection and administration of the most appropriate
antidotes.



Wellstat Therapeutics Corporation's product candidate, uridine triacetate,
continues to progress towards a planned US New Drug Application (NDA) in H2
2013. This is in development for use as a treatment for life-threatening
accidental overexposure to the chemotherapeutic 5-fluorouracil (5-FU), which
is estimated to occur in around 2,000 patients in the US each year. If
approved, BTG would sell uridine triacetate through its existing Acute Care
field force.



  Interventional Medicine

Within Interventional Medicine, a strong first half included good progress
with PEM and Beads clinical development while continuing the US commercial
activities to support the transition to direct sales.



The transition to direct sales of LC Bead™ in the US has gone well. Inventory
that was in the supply chain as the team commenced selling is now being
depleted, and ordering/stocking patterns are returning to more normal levels.



Humanitarian Use Designation (HUD) was granted in August 2012 for PRECISION
Bead^®, loaded with doxorubicin, for the treatment of patients with uveal
melanoma with hypervascularised hepatic metastases. A Humanitarian Device
Exemption (HDE) seeking authority to sell the product in this indication is
now planned for submission in H1 2013. If successful, this would be the first
ever embolic microsphere pre-loaded with drug for use in precision
transarterial chemoembolisation (TACE).



BTG also plans to request an HUD for PARAGON Bead^®, loaded with irinotecan,
to treat patients with intrahepatic cholangiocarcinoma (ICC). If granted, an
HDE submission is anticipated in H1 2013.



Investigator-led studies remain core to BTG's strategy to explore additional
uses for the Bead products. During the period, two new studies in patients
with hepatocellular carcinoma (HCC), the main form of primary liver cancer,
and one in patients with metastatic colorectal cancer (mCRC), the most common
secondary liver cancer, were approved and are expected to commence during
2013.



If successful, these studies may lead to registration trials to seek formal
approvals to market the products in additional indications. Based on
encouraging data from recent exploratory studies, BTG is planning three Phase
III registration trials, of which one should commence recruitment during 2013.
Two of the studies are of PRECISION Bead^® in HCC, one in patients eligible
for surgery/transplant and the other in patients with unresectable disease.
The third study is using the PARAGON Bead^® to explore its use in combination
with systemic chemotherapy in unresectable patients with mCRC.



Progress continues to be made in important Asian markets, where the incidence
of primary liver cancer is many times higher than in the western world because
of high rates of infection with hepatitis B and C viruses.



In China, where BTG's partner is SciClone, a DC Bead^® regulatory application
was submitted in October 2012 and has been accepted for review. In Japan,
where DC Bead^® is partnered with Eisai, the regulator has requested
additional safety data in five patients with primary liver cancer. BTG expects
to submit this data in H1 2013, which could lead to potential approval within
12 months. Reimbursement negotiations are continuing in South Korea to seek
inclusion of a broad patient population.



PEM, BTG's experimental treatment for varicose veins, continues to progress
towards a planned US NDA submission around the end of 2012. During the period,
positive top-line data were reported from the second pivotal US Phase III
trial. Full data from both pivotal Phase III trials is scheduled to be
presented at the 26^th Annual Congress of the American College of Phlebology
during November 2012. The data support PEM's positioning as the first
comprehensive treatment that can treat both the incompetent great saphenous
vein (GSV), responsible for the symptoms experienced by patients, in addition
to the associated visible varicosities above and below the knee.



Manufacturing of PEM has been transferred to BTG's Farnham site, where the
interventional oncology Bead products are made, and from where PEM would be
supplied to the US and any other markets if approved.



A PEM commercial launch team has been established to prepare for an
anticipated H1 2014 US approval and launch.



  Licensing & Biotechnology

The Licensing & Biotechnology business segment is expected to continue to
generate significant revenues for the Group over the medium-to-long term.



The rapid penetration of Zytiga^® for men with advanced metastatic
castration-resistant prostate cancer (mCRPC) has made this product, which is
licensed to Johnson & Johnson, the most successful global oral oncology launch
and BTG's current largest royalty contributor. The product is currently
approved in more than 50 countries for use in men who have progressed from
standard chemotherapy. Zytiga^® had an estimated patient share of ~67% in the
US in this market in Q3 2012 and ~81% share in the five largest overseas
markets in Q2 2012. It is under review in the US and EU for chemo-naïve
patients, a market that is estimated to be three times larger than the
post-chemo mCRPC market, with potential US approval in December 2012.



A regulatory application seeking approval for Lemtrada™ (alemtuzumab) in
multiple sclerosis is under review in the EU. Following a refusal to file
notice in the US, on the grounds that the data needed to be reorganised to
enable the FDA to better navigate the application, BTG's licensee
Sanofi/Genzyme plans to resubmit the application and will make a further
announcement in due course.



SUMMARY AND OUTLOOK



The Group has had a good first half producing strong financial results and
making pipeline progress.



The Specialty Pharmaceuticals business is performing well. Although the
markets for CroFab^®, DigiFab^® and Voraxaze^® are bounded and relate to the
number of poisoning events that occur, BTG is confident that its leadership
strategy will strengthen customer relationships and help ensure appropriate
stocking and optimum usage of the products. BTG reiterates its guidance that
on average these products are expected to grow year-on-year at a rate of
mid-to-high single digits.



Progress has been good in the Interventional Medicine business segment, with
the completion of the transition to direct US sales of LC Bead™. The full
financial benefit of selling directly in the US should be evident in the
financial year beginning in April 2013. The brachytherapy business, which saw
20% growth last year, continues to be challenged by the relatively flat
overall market for brachytherapy products and its competitive nature.
Nevertheless, there are opportunities to continue to enhance revenues and
margins in future years.



The Licensing & Biotechnology segment had a strong first half. Final revenues
have been received relating to BeneFIX^®, the loss of which means the gross
margin in this segment is expected to decline from 66% in this period and to
revert to historical average levels of around 52%. Zytiga^® is continuing to
grow and may grow significantly if approved for use in chemo-naïve mCRPC
patients.



Over the full year, revenues are expected to be in the range £205m to £215m.
The Group expects to generate significant cash to enable continued investment
in development and acquisition activities, and BTG remains very well placed to
continue to execute its growth strategy.





CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 September 2012

                   Six months ended 30 September 2012   Six months ended 30 September 2011
                   Results before                      Results before
                       acquisition    Acquisition           acquisition    Acquisition
                       adjustments    adjustments          adjustments    adjustments
                               and            and                  and            and      
                    reorganisation reorganisation       reorganisation reorganisation      
                            costs          costs  Total          costs          costs Total
              Note             £m             £m     £m             £m             £m     £m
                                                                                     
Revenue         2            143.4              -  143.4          110.7          (0.1)  110.6
Cost of sales   2           (38.1)              - (38.1)         (29.1)          (2.1) (31.2)
Gross profit    2            105.3              -  105.3           81.6          (2.2)   79.4
Operating                                                                              
Expenses:       
Amortisation
and impairment
of acquired
intangible
assets         7, 9              -         (33.8) (33.8)              -         (20.9) (20.9)
Foreign
exchange gains  3              0.5              -    0.5            2.3              -    2.3
Selling,
general and
administrative
expenses        2           (27.5)              - (27.5)         (20.7)              - (20.7)
Operating
expenses:                   (27.0)         (33.8) (60.8)         (18.4)         (20.9) (39.3)
total           
Research and                (17.0)              - (17.0)         (19.0)              - (19.0)
development     
Amounts
written off
property,
plant and
equipment       9            (1.8)              -  (1.8)          (3.0)              -  (3.0)
Acquisition and
reorganisation                   -            0.5    0.5              -          (1.1)  (1.1)
costs
Amounts
written off                      -              -      -          (0.1)              -  (0.1)
investments     
Operating                     59.5         (33.3)   26.2           41.1         (24.2)   16.9
profit          
Financial                      1.5              -    1.5            3.1            1.1    4.2
income          4
Financial                        -              -      -          (1.6)              -  (1.6)
expense         4
Profit before                 61.0         (33.3)   27.7           42.6         (23.1)   19.5
tax             
Tax             5                                (9.4)                              (6.8)
Profit for the                                    18.3                               12.7
period          
                                                                                     
Basic earnings                                    5.6p                               3.9p
per share       6
Diluted
earnings per                                      5.5p                               3.9p
share           6
                                                                                     
All activity arose from continuing operations                                               





CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 September
2012
                                       Six months ended 30 Six months ended 30
                                                 September           September

                                                      2012                2011
                                Note                    £m                  £m
Profit for the period                                 18.3                12.7
Other comprehensive income
Foreign exchange translation
differences                                          (1.3)                 2.0
Actuarial gain on defined
benefit pension scheme           8                     2.0                 1.8
Deferred tax on defined benefit
pension scheme asset                                 (1.0)               (0.6)
Other comprehensive income for
the period                                           (0.3)                 3.2
Total comprehensive income for
the period                                            18.0                15.9





CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 September 2012
                                  30September 2012 31March 30September 2011
                                                        2012
                             Note                £m       £m                £m
ASSETS
Non-current assets
Goodwill                     7                 59.2     59.2              59.2
Intangible assets            7, 9             212.7    246.0             258.5
Property, plant and                            22.7     22.0              21.3
equipment
Other investments                               3.0      3.0               2.9
Deferred tax asset                             1.2      1.0               0.9

Employee benefits            8                  4.0        -               2.8
Biological assets                               0.1      0.3               0.3
                                              302.9    331.5             345.9
Current assets
Inventories                                    19.9     21.8              17.6
Trade and other receivables                    51.4     40.1              46.0
Taxation                                          -        -               1.0

Derivative instruments                          1.2      0.5               0.9
Held to maturity financial                      5.0      5.0               2.7
assets
Cash and cash equivalents                     145.7    106.9              90.2
                                              223.2    174.3             158.4
Total assets                                  526.1    505.8             504.3
EQUITY
Share capital                                  32.8     32.7              32.7
Share premium account                         188.3    188.3             188.3
Merger reserve                                317.8    317.8             317.8
Other reserves                                (5.3)    (4.0)             (1.7)
Retained earnings                           (106.5)  (128.6)           (127.8)
Total equity attributable to                  427.1    406.2             409.3
equity holders of the parent
LIABILITIES
Non-current liabilities
Trade and other payables                        1.0      5.0               6.2
Employee benefits            8                    -      0.1                 -
Deferred taxation                              41.8     35.2              34.1
Provisions                                      1.0      1.0               1.0
                                               43.8     41.3              41.3
Current liabilities
Trade and other payables                       51.2     55.4              47.3
Derivative instruments                            -        -               0.3
Taxation                                        3.3      2.1               5.0
Provisions                                      0.7      0.8               1.1
                                               55.2     58.3              53.7
Total liabilities                              99.0     99.6              95.0
Total equity and liabilities                  526.1    505.8             504.3





CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 September 2012


                                       Six months ended 30 Six months ended 30
                                                 September           September

                                                      2012                2011
                                                        £m                  £m
Profit after tax for the period                       18.3                12.7
Tax                                                    9.4                 6.8
Financial income                                     (1.5)               (4.2)
Financial expense                                        -                 1.6
Operating profit                                      26.2                16.9
Adjustments for:
 Amounts written off property,                      1.8                 3.0
plant and equipment
 Amounts written off associates                       -                 0.1
and investments
 Amortisation and impairment of                    34.7                21.7
intangible assets
 Depreciation on property, plant                    1.4                 1.5
and equipment
 Share-based payments                               2.2                 1.0
 Pension scheme funding                           (2.0)               (3.0)
Cash from operations before                           64.3                41.2
movements in working capital
Decrease in inventories                                2.0                 0.5
Increase in trade and other                         (11.2)              (13.2)
receivables
Decrease in trade and other payables                 (8.1)               (2.7)
Decrease in provisions                               (0.1)               (0.8)
Cash from operations                                  46.9                25.0
Taxation paid                                        (2.2)               (0.1)
Net cash inflow from operating                        44.7                24.9
activities
Investing activities
Interest received                                      0.6                 0.3
Purchases of intangible assets                       (2.1)               (4.7)
Purchases of property, plant &                       (4.3)               (1.2)
equipment
Expenditure on investments                               -               (0.1)
Proceeds on held to maturity                             -                 7.5
financial assets
Other                                                  0.1                   -
Net cash (outflow)/inflow from                       (5.7)                 1.8
investing activities
Cash flows from financing activities
Repayment of finance leases                          (0.1)               (0.2)
Proceeds of share issues                               0.1                 0.1
Net cash outflow from financing                          -               (0.1)
activities
Increase in cash and cash equivalents                 39.0                26.6
Cash and cash equivalents at start of                106.9                63.7
period
Effect of exchange rate fluctuations                 (0.2)               (0.1)
on cash held
Cash and cash equivalents at end of                  145.7                90.2
period





CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2012


                                Share   Share  Merger    Other Retained  Total
                              capital premium reserve reserves earnings equity
                                   £m      £m      £m       £m       £m     £m
At 1 April 2011                  32.7   188.2   317.8    (3.7)  (142.7)  392.3
Profit for the period               -       -       -        -     12.7   12.7
Other comprehensive income          -       -       -      2.0      1.2    3.2
Total comprehensive income          -       -       -      2.0     13.9   15.9
for the period
Transactions with owners:
Issue of BTG plc ordinary           -     0.1       -        -        -    0.1
shares
Share-based payments                -       -       -        -      1.0    1.0
At 30 September 2011             32.7   188.3   317.8    (1.7)  (127.8)  409.3





                                Share   Share  Merger    Other Retained  Total
                              capital premium reserve reserves earnings equity
                                   £m      £m      £m       £m       £m     £m
At 1 April 2012                  32.7   188.3   317.8    (4.0)  (128.6)  406.2
Profit for the period               -       -       -        -     18.3   18.3
Other comprehensive income          -       -       -    (1.3)      1.0  (0.3)
Total comprehensive income          -       -       -    (1.3)     19.3   18.0
for the period
Transactions with owners:
Issue of BTG plc ordinary         0.1       -       -        -        -    0.1
shares
Movement in shares held by          -       -       -        -      0.6    0.6
the Trust
Share-based payments                -       -       -        -      2.2    2.2
At 30 September 2012             32.8   188.3   317.8    (5.3)  (106.5)  427.1





NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS



1. Basis of preparation

    

    Statement of compliance

      These condensed consolidated interim financial statements have been
      prepared in accordance with IAS 34 Interim Financial Reporting. They do
      not include all of the information required for full annual financial
      statements, and should be read in conjunction with the consolidated
      financial statements of the Group for the year ended 31 March 2012.

      

      These condensed unaudited consolidated interim financial statements were
      approved by the Board of Directors on 7 November 2012.



    Comparative financial information

      The comparative figures for the year ended 31 March 2012 do not
      constitute the Group's statutory accounts for that financial year.
      Statutory accounts for the year ended 31 March 2012, prepared in
      accordance with International Financial Reporting Standards as adopted
      by the EU ('Adopted IFRSs'), have been reported on by the Group's
      auditors and delivered to the Registrar of Companies. The report of the
      auditors was (i) unqualified, (ii) did not include a reference to any
      matters to which the auditors drew attention by way of emphasis without
      qualifying their report, and (iii) did not contain a statement under
      section 498 (2) or (3) of the Companies Act 2006.



    Accounting policies

      Except as described below, the accounting policies applied by the Group
      in these condensed consolidated interim financial statements are the
      same as those applied by the Group in its consolidated financial
      statements for the year ended 31 March 2012.

      

      No accounting standards or other amendments adopted in the period have
      had a significant effect on the reported results or financial position
      of the Group.



    Acquisition adjustments and reorganisation costs

      The Condensed Consolidated Income Statement includes a separate column
      to disclose significant acquisition adjustments and reorganisation costs
      arising on corporate acquisitions. Adjustments relate to the
      acquisitions of:



━ Biocompatibles International plc in January 2011; and

━ Protherics PLC in December 2008.



The costs relate to the following:

━ The release of the fair value uplift of inventory acquired;

━ Amortisation and impairment arising on intangible assets acquired;

━ Transaction costs incurred with professional advisors in relation to the
completion of corporate acquisitions; and

━ Reorganisation costs comprising acquisition related redundancy programmes,
property costs and asset impairments.

    

    Going concern and liquidity

      After making reasonable enquiries, the directors have a reasonable
      expectation that the Group has adequate resources to continue in
      operational existence for the foreseeable future. Accordingly, they
      continue to adopt the going concern basis in preparing the Interim
      Financial Statements

      

      This conclusion has been reached having considered the effect of
      liquidity risk on the Group's ability to operate effectively. Currently,
      liquidity risk is not considered a significant business risk to the
      Group given its level of net cash and cash flow projections. The Group
      does not currently require significant levels of debt financing to
      operate its business. The key liquidity risks faced by the Group are
      considered to be the failure of banks where funds are deposited and the
      failure of key licensees, distributors or insurers.

      

      In addition to the liquidity risk considered above, the directors have
      also considered the following factors when reaching the conclusion to
      continue to adopt the going concern basis:



━ The Group's principal licensees are global industry leaders in their
respective fields and the Group's royalty-generating intellectual property
covers a broad portfolio of both licensees and industries;

━ The Group does not have a significant exposure to the Eurozone; and

━ The Group's sales products are life-saving in nature, providing some
protection against the current uncertain economic outlook.

    

    Seasonality of the business

      Revenues from the Group's marketed products are dependent on both the
      timing of shipments of product to the Group's distributors and the
      underlying demand for the products. CroFab^®, in particular,
      demonstrates seasonality since the main snake biting season, when the
      product is in highest demand, runs from March to October.

      

      The Group's royalty income is derived from a number of different
      licensees and underlying products and markets. Typically it does not
      demonstrate a highly cyclical pattern but is dependent on the timing of
      milestones due from licensees upon completion of certain contractual
      development or sales milestones. These, by their very nature, are not
      predictable.



2. Operating segments

Following the acquisition of Biocompatibles International plc in January 2011,
the Group aligned behind three reportable segments, being Specialty
Pharmaceuticals, Interventional Medicine and Licensing & Biotechnology,
effective from 1 April 2011.



In assessing performance and making resource allocation decisions, the
Leadership Team (which is BTG's chief operating decision-making body) reviews
contribution by segment. Contribution is defined as being gross profit less
directly attributable selling, general and administrative costs (SG&A). The
Licensing & Biotechnology operating segment includes SG&A relating to the
Group's centrally managed support functions and corporate overheads. This
reflects the management structure and stewardship of the business. No
allocation of central overheads is made across the Specialty Pharmaceuticals
or Interventional Medicine operating segments. Research and development
continues to be managed on a global basis, with investment decisions being
made by the Leadership Team as a whole. It is not managed by reference to the
Group's operating segments, though each programme within the pipeline would
ultimately provide revenues for one of the operating segments if successful.





                                  Six months ended 30 September 2012
                                 Specialty Interventional   Licensing &  Total
                          Pharmaceuticals       Medicine Biotechnology
                                       £m             £m            £m     £m
                                                                         
Revenue                               67.5           17.7          58.2  143.4
Cost of Sales*                      (15.2)          (3.2)        (19.7) (38.1)
Gross Profit                          52.3           14.5          38.5  105.3
Selling, general and
administrative expenses              (9.2)          (7.2)        (11.1) (27.5)
Contribution                          43.1            7.3          27.4   77.8
                                                                         
Amortisation and
impairment of acquired
intangibles                                                          (33.8)
Foreign exchange gains                                                  0.5
Research and development                                             (17.0)
Amounts written off
property, plant and
equipment                                                             (1.8)
Acquisition and
reorganisation costs                                                    0.5
Operating profit                                                       26.2
Financial income                                                        1.5
Financial expense                                                         -
Profit before tax                                                      27.7
Tax                                                                   (9.4)
Profit for the period                                                  18.3

Unallocated assets                                                    526.1
                                                   
                                   Six months ended 30 September 2011
                                 Specialty Interventional   Licensing &
                          Pharmaceuticals       Medicine Biotechnology  Total
                                       £m             £m            £m     £m
                                                                         
Revenue                               52.0           13.1          45.5  110.6
Cost of Sales*                      (13.2)          (5.1)        (12.9) (31.2)
Gross Profit                          38.8            8.0          32.6   79.4
Selling, general and
administrative expenses              (8.1)          (4.7)         (7.9) (20.7)
Contribution                          30.7            3.3          24.7   58.7
                                                                         
Amortisation and
impairment of acquired
intangibles                                                          (20.9)
Foreign exchange gains                                                  2.3
Research and development                                             (19.0)
Amounts written off
property, plant and
equipment                                                             (3.0)
Acquisition and
reorganisation costs                                                  (1.1)
Amounts written off
investments                                                           (0.1)
Operating loss                                                         16.9
Financial income                                                        4.2
Financial expense                                                     (1.6)
Profit before tax                                                      19.5
Tax                                                                   (6.8)
Profit for the period                                                  12.7
Unallocated assets                                                    504.3



*Six months ended 30 September 2011 includes a £2.1m release of the fair value
uplift of inventory purchased on the acquisition of Biocompatibles
International plc in January 2011 within the Interventional Medicine operating
segment.



Revenue analysis

An analysis of revenue, based on the geographical location of customers and
the source of revenue is provided below:



    Geographical analysis   Six months   Six months
                                 ended        ended
                          30 September 30 September

                                  2012         2011
                                    £m           £m
USA                              128.6         95.2
UK                                 6.5          4.4
Europe (excluding UK)              6.3          9.2
Other regions                      2.0          1.8
                                 143.4        110.6

    

Revenue from major products and services   Six months   Six months
                                                ended        ended
                                        30 September 30 September

                                                 2012         2011
                                                   £m           £m
Product sales                                    85.7         65.8
Royalties                                        51.6         35.0
Other                                             6.1          9.8
                                                143.4        110.6

    

    Major customers

The Group's marketed products are sold both directly and also through several
distribution agreements in the US, Europe and Asia Pacific. Two customers
individually generated product income in excess of 10% of Group revenue of
£17.3m and £15.6m respectively (H1 11/12: two customers individually generated
product income of £16.7m and £14.9m respectively).



Products that utilise the Group's Intellectual Property Rights are sold by
licensees. Royalty income is derived from over 70 licences. One licence
individually generated royalty income in excess of 10% of Group revenue of
£23.4m (H1 11/12: one licence individually generated £16.0m).



3. Foreign exchange gains and losses in the income statement

      During the six months ended 30 September 2012 the Group recognised
      foreign exchange gains of £0.5m (H1 11/12: gains of £2.3m) within
      operating profit. These arose from the retranslation of foreign currency
      balance sheet amounts, transactional exchange gains and losses in the
      period and the settlement of the Group's foreign exchange forward
      contracts during the period.

      

      Included within "Financial income" of £1.5m (H1 11/12: included within
      "Financial expense": £1.6m) is £0.8m (H1 11/12: included within
      "Financial expense": £1.5m) which represents the movement in the fair
      value of the Group's foreign exchange forward contracts.



4. Financial income and expense

                                            Six months ended  Six months ended
                                           30 September 2012 30 September 2011
                                                          £m                £m
Interest receivable on money market and
bank deposits                                            0.6               0.3
Fair value movement on Contingent Value
Notes (i)                                                  -               1.1
Fair value movement on borrowings (ii)                     -               2.8
Fair value movement on foreign exchange
forward contracts                                        0.8                 -
Other                                                    0.1                 -
Financial income                                         1.5               4.2
Interest payable on finance lease and hire
purchase agreements                                        -               0.1
Fair value movement on foreign exchange
forward contracts                                          -               1.5
Financial expense                                          -               1.6



(i) Contingent Value Notes

      As part of BTG's acquisition of Biocompatibles in January 2011, 487
      Biocompatibles shareholders elected to receive in aggregate 10,722,465
      Contingent Value Notes (CVNs) providing a right to a payment of the
      Sterling equivalent of €0.56 per Biocompatibles share if AstraZeneca
      exercised its option to enter a licence agreement relating to CM-3 on
      the pre-agreed terms. In May 2011 AstraZeneca decided to terminate the
      development and option agreement and it is highly unlikely that any
      payment will be made in relation to the CVNs. The payment obligation
      would only now arise if BTG enters into another form of licence, sale or
      other disposal of the GLP-1 asset to AstraZeneca prior to 31 December
      2012. The BTG Board does not believe that there is any realistic
      possibility that this will occur. Accordingly, in the prior year, the
      Group derecognised a liability of £1.1m in relation to the CVN through
      the Income Statement in Financial Income in the acquisition adjustments
      and reorganisation costs column.



(ii) Borrowings

In the prior period, following the withdrawal of the Novabel^® product from
the market and subsequent impairments recognised within tangible and
intangible assets, the Group derecognised a £2.8m loan from Merz as there was
no obligation for this to be repaid. The loan was received to fund the
purchase of tangible assets for use in the manufacture of Novabel^® and was
repayable out of revenues.



5. Tax

                                       Six months ended   Six months
                                           30September        ended
                                                        30 September
                                                   2012
                                                                2011
                                                     £m           £m
Current tax
Current tax charge                                  3.7          4.8
Deferred tax
Increase in net deferred tax liability              5.7          2.0
                                                    9.4          6.8



      Tax for each six-month period has been provided on the basis of the
      anticipated effective rate for the full year. The current tax charge of
      £3.7m (H1 11/12: £4.8m) principally relates to UK corporation tax and US
      state taxes and Alternative Minimum Tax.

      

      The deferred tax charge of £5.7m (H1 11/12: £2.0m) principally reflects
      the reduction of deferred tax assets as the Group utilises its brought
      forward US tax losses against forecast taxable profits, offset by a
      reduction in the deferred tax liability recognised on acquired
      intangible assets as these assets are amortised or impaired.



6. Earnings per share

      The calculation of basic and diluted earnings per share is based on the
      following data:



                                            Six months ended   Six months
                                                30September        ended
                                                             30 September
                                                        2012
                                                                     2011
Profit for the period (£m)                              18.3         12.7
Earnings per share (p)
Basic                                                    5.6          3.9
Diluted                                                  5.5          3.9
Number of shares (m)
Weighted average number of shares - basic              326.7        325.8
Effect of share options in issue                         4.1          3.4
Weighted average number of shares - diluted            330.8        329.2



The denominators used are the same as those above for both basic and diluted
earnings per share.



The calculation of basic and diluted earnings per share from underlying
earnings is based on the following data:

                                                 Six months ended   Six months
                                                     30 September        ended
                                                                  30 September
                                                             2012
                                                                          2011
Profit for the period from operations (£m)                   18.3         12.7
Add back:
Fair value adjustment on acquired inventory                     -          2.1
Fair value adjustment on royalty income                         -          0.1
Amortisation of acquired intangible fixed assets             18.8         10.2
Acquisition and reorganisation costs including              (0.5)            -
CVN writeback
Underlying earnings                                          36.6         25.1
Profit per share (p)
Basic                                                        11.2          7.7
Diluted                                                      11.1          7.6



      Adjustments to profit are shown after taking into account the
      anticipated tax effect of such adjustments.



7. Goodwill and intangible assets



(a) Goodwill

      Goodwill of £59.2m relates to the acquisitions of Biocompatibles
      International plc in January 2011 and Protherics PLC in December 2008.



(b) Intangible assets

                                  30September 2012 31 March 30September 2011
                                                        2012
Net book value                                   £m       £m                £m
Developed technology (i)                      197.7    205.0             211.3
Contractual relationships (i)                   1.8     26.6              29.5
In-process research and                         3.0      5.1               9.0
development (i)
Computer Software                               0.2      0.5               0.2
Patents                                         2.6      2.7               3.1
Purchase of contractual rights                  7.4      6.1               5.4
(ii)
                                              212.7    246.0             258.5



(i) Developed technology, Contractual relationships and In-process research
and development

      Intangible assets comprising developed technology, contractual
      relationships and in-process research and development relate to assets
      acquired on the purchase of Biocompatibles International plc in January
      2011 and Protherics PLC in December 2008. Movements in these categories
      of intangible assets between 31 March 2012 and 30 September 2012 are
      predominately driven by (1) amortisation and impairment charges and (2)
      foreign exchange retranslation of the assets denominated in foreign
      currencies at the closing exchange rate at 30 September 2012.



      An impairment charge of £22.5m within 'contractual relationships' has
      been recognised within the acquisition adjustments and reorganisation
      costs column in the Income Statement in relation to AZD9773 (see note
      9).



(ii) Purchase of contractual rights

      In May 2012, BTG signed an agreement with Wellstat Therapeutics
      Corporation to acquire the rights to distribute uridine triacetate on a
      named patient supply basis in Europe for an upfront payment of $3.0m,
      together with an option to market uridine triacetate following EU
      regulatory approval, under pre-agreed financial terms including a
      multi-million dollar exercise fee.

      

8. Defined benefit pension fund

      The Group has recognised an asset of £4.0m on the Group's balance sheet
      in accordance with IAS19 - Employee benefits in relation to the BTG
      Pension Fund (31 March 2012: liability of £0.1m; 30 September 2011:
      asset of £2.8m). The £4.1m movement since 31 March 2012 relates
      principally to cash contributions made by the Group and to actuarial
      gains, which are recognised in the condensed consolidated statement of
      comprehensive income.

      

      In July 2011 the Group finalised the triennial actuarial valuation of
      the BTG Pension Fund as at 31 March 2010. The valuation showed a deficit
      of £13.9m and the Group committed to deficit repair payments of £12.1m
      in aggregate over the three years ending 31 March 2014. In the period to
      30 September 2012, deficit repair payments of £1.9m have been made.

      

      The Group also agreed to place a total of £1.5m into an escrow account,
      in three annual instalments of £0.5m commencing July 2011, to be used in
      the event of a wind-up of the BTG Pension Fund before 1 November 2013.
      If a wind-up has not commenced by 1 November 2013, the funds return to
      the Group.



9. AZD9773

      On 8 August 2012 BTG announced the top-line data from a global Phase IIb
      study of AZD9773 in patients with severe sepsis and/or septic shock,
      conducted by AstraZeneca. The study failed to meet primary or secondary
      endpoints. AstraZeneca has given notice to terminate its licence
      agreement and associated arrangements with BTG and is in the process of
      handing the asset back to BTG. BTG does not anticipate conducting any
      further development of AZD9773. Consequently the following transactions
      have been recognised.



━ The release of deferred income associated with previously received
milestones from AstraZeneca in relation to AZD9773 work streams of £5.4m to
the income statement within the Licensing and Biotechnology segment;

━ An impairment charge of £22.5m has been recognised in amortisation and
impairment of acquired intangibles in the acquisition adjustments and
reorganisation costs column;

━ Property, plant and equipment write-downs associated with assets used in
the development of AZD9773 of £1.8m have been recognised in amounts written
off property, plant and equipment;

━ Committed costs associated with the development programme of £0.4m have
been recognised within research and development.



10. Related parties

      Giles Kerr, a non-executive director of BTG plc, is also the Director of
      Finance for Oxford University and a director of Isis Innovations
      Limited, a wholly-owned subsidiary of Oxford University.Wholly owned
      subsidiaries of BTG plc entered into revenue sharing agreements with
      these organisations prior to Giles Kerr joining the BTG Board. The BTG
      Group has licensed the intellectual property covered by these agreements
      to third party companies that are developing and/or selling the licensed
      products. Under these licence agreements, BTG is entitled to receive
      milestone payments and/or a royalty on sales of the products made by the
      third party licensees. Payments in the six months to 30 September 2012
      under these agreements were £1.5m and amounts still outstanding and
      payable at 30 September 2012 were £nil.

      

      Under the various revenue sharing agreements, the BTG Group pays a share
      of any income it receives to Oxford University and Isis Innovations,
      depending on the specific technology that generated the income. As the
      revenue sharing agreements do not permit these organisations to have any
      input over the commercialisation of the licensed products or the amount
      payable under the relevant revenue sharing agreement, Giles Kerr is not
      able to influence the amounts received in his position outside BTG.
      Because he has no influence over any aspect of these agreements in his
      role outside the BTG Group, the Company considers that his independence
      in relation to the BTG Group is not compromised.

      

      Within the BTG Group, to avoid any possible conflict of interest, it has
      been agreed that Giles Kerr will not participate in any discussions
      concerning the relevant agreements either within the Board meetings of
      BTG plc or in any other discussions or meetings with the executives of
      BTG plc and its subsidiaries. The Board has considered, and is
      satisfied with, this separation of duties.



  Principal risks and uncertainties

The principal risks and uncertainties faced by the Group for the remaining six
months of the year have not changed from those set out on pages 26 to 29 of
the BTG plc Annual Report and Accounts 2012, available from the Group's
website at www.btgplc.com. These include but are not limited to: interruption
of product supply including reliance on third-party contractors for the supply
of key manufacturing materials and services; patent validity and infringement
challenges and the inherent risks of managing an intellectual property
portfolio; product liability; competition for new programmes and projects;
general market competition affecting product sales or royalty income; pricing
and reimbursement issues; the inherent uncertainty of drug development; the
highly regulated nature of the pharmaceuticals industry; and movements in
foreign exchange rates.



Responsibility statement of the directors in respect of the interim financial
report



We confirm that to the best of our knowledge:



━ the condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the European Union;

━ the interim management report includes a fair review of the information
required by:



(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an  indication 
of important events  that have  occurred during the  first six  months of  the 
financial year and their impact on the condensed set of financial  statements; 
and a description of the principal  risks and uncertainties for the  remaining 
six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related  party 
transactions that have  taken place  in the first  six months  of the  current 
financial year and  that have  materially affected the  financial position  or 
performance of the entity during that  period; and any changes in the  related 
party transactions described in the last annual report that could do so.

  

  The Board

The Board of Directors that served during the six-month period to 30 September
2012 and their respective responsibilities can be  found on pages 36 to 37  of 
the BTG plc Annual Report and Accounts 2012.



By order of the Board





Dr Louise Makin Chief Executive Officer
Rolf Soderstrom Chief Financial Officer



7 November 2012



                                      

                    Independent Review Report to BTG plc

  

  Introduction

      We have been engaged by the Company to review the condensed set of
      financial statements in the half-yearly financial report for the six
      months ended 30 September 2012 which comprises the Group's condensed
      consolidated income statement, condensed consolidated statement of
      comprehensive income, condensed consolidated statement of financial
      position, condensed consolidated statement of cash flows and the
      condensed statement of changes in equity and the related explanatory
      notes. We have read the other information contained in the half-yearly
      financial report and considered whether it contains any apparent
      misstatements or material inconsistencies with the information in the
      condensed set of financial statements.

      

      This report is made solely to the Company in accordance with the terms
      of our engagement to assist the Company in meeting the requirements of
      the Disclosure and Transparency Rules ('the DTR') of the UK's Financial
      Services Authority ('the UK FSA'). Our review has been undertaken so
      that we might state to the Company those matters we are required to
      state to it in this report and for no other purpose. To the fullest
      extent permitted by law, we do not accept or assume responsibility to
      anyone other than the Company for our review work, for this report, or
      for the conclusions we have reached.



  Directors' responsibilities

      The half-yearly financial report is the responsibility of, and has been
      approved by, the directors. The directors are responsible for preparing
      the half-yearly financial report in accordance with the DTR of the UK
      FSA.

      

      As disclosed in note 1, the annual financial statements of the Group are
      prepared in accordance with IFRSs as adopted by the EU. The condensed
      set of financial statements included in this half-yearly financial
      report has been prepared in accordance with IAS 34 Interim Financial
      Reporting as adopted by the EU.



  Our responsibility

Our responsibility is to express to the Company a conclusion on the  condensed 
set of financial statements in the  half-yearly financial report based on  our 
review.



  Scope of review

      We conducted our review in accordance with International Standard on
      Review Engagements (UK and Ireland) 2410 Review of Interim Financial
      Information Performed by the Independent Auditor of the Entity issued by
      the Auditing Practices Board for use in the UK. A review of interim
      financial information consists of making enquiries, primarily of persons
      responsible for financial and accounting matters, and applying
      analytical and other review procedures. A review is substantially less
      in scope than an audit conducted in accordance with International
      Standards on Auditing (UK and Ireland) and consequently does not enable
      us to obtain assurance that we would become aware of all significant
      matters that might be identified in an audit. Accordingly, we do not
      express an audit opinion.



  Conclusion

Based on our  review, nothing  has come  to our  attention that  causes us  to 
believe that  the condensed  set of  financial statements  in the  half-yearly 
financial report for the six months  ended 30 September 2012 is not  prepared, 
in all material respects, in accordance with  IAS 34 as adopted by the EU  and 
the DTR of the UK FSA.

        

        David Bills

        For and on behalf of KPMG Audit Plc

        Chartered Accountants

        15 Canada Square

        London E14 5GL



7 November 2012





  Shareholder information



    Financial calendar

Interim management statement                                January 2013
Announcement of annual results for year ended 31 March 2013 May 2013

  

  Capita share dealing services

      A quick and easy share dealing service is available from Capita
      Registrars, to either buy or sell more shares. An online and telephone
      dealing facility is available providing shareholders with an
      easy-to-access and simple-to-use service. For further information on
      this service, or to buy and sell shares, please contact:
      www.capitadeal.com (online dealing) or +44 (0) 871 664 0446 (telephone
      dealing) - calls cost 10p per minute plus network extras, lines are open
      8am - 4.30pm Monday - Friday. Full terms, conditions and risks apply
      and are available on request or by visiting www.capitadeal.com.

      

      This is not a recommendation to buy or sell shares. The price of shares
      can go down as well as up, and you are not guaranteed to get back the
      amount that you originally invested.



  Shareholder change of address

      The Company offers the facility, in conjunction with Capita Registrars,
      our Registrars, to conduct a number of routine matters via the web
      including the ability to notify any change of address. If you are a
      shareholder and are either unable or would prefer not to use this
      facility, please do not send the notification to the Company's
      registered office. Please write direct to Capita Registrars, at their
      address shown below, where the register is held.



  Relating to beneficial owners of shares with 'information rights'

      Please note that beneficial owners of shares who have been nominated by
      the registered holder of those shares to receive information rights
      under section 146 of the Companies Act 2006 are required to direct all
      communications to the registered holder of their shares rather than to
      the Company's registrar, Capita Registrars, or to the Company directly.



  Addresses for correspondence



Registered office and head office  Registrars
BTG plc                            Capita Registrars

5 Fleet Place                      The Registry

London                             34 Beckenham Road

EC4M 7RD                           Beckenham

Tel: +44 (0)20 7575 Kent
0000
                                   BR2 4TU
Fax: +44 (0)20 7575
0010                               

Email:  info@btgplc.com  Tel (callers from the UK) 0871 664 0300

                                  (please note that calls cost 10p per
                                   minute, plus network extras, lines are open
Website: www.btgplc.com     8.30am - 5.30pmMonday - Friday)

                                  Tel (callers outside UK) +44 208 639
                                   3399
Registered number 2670500



  

  Cautionary statement regarding forward-looking statements

      This Interim Report and Accounts may contain certain projections and
      other forward-looking statements with respect to the financial
      condition, results of operations and businesses of BTG plc ("BTG").
      These statements are based on current expectations and involve risk and
      uncertainty because they relate to events and depend upon circumstances
      that will occur in the future. There are a number of factors which could
      cause actual results or developments to differ materially from those
      expressed or implied by these forward-looking statements. Although BTG
      currently believes that the assumptions underlying these forward-looking
      statements are reasonable, any of the assumptions could prove inaccurate
      or incorrect and therefore there can be no assurance that any results
      contemplated in the forward-looking statements will actually be
      achieved. Nothing contained in this Interim report should be construed
      as a profit forecast or profit estimate. Investors or other recipients
      are cautioned not to place undue reliance on any forward-looking
      statements contained herein. BTG undertakes no obligation to update or
      revise (publicly or otherwise) any forward-looking statement, whether as
      a result of new information, future events or other circumstances. This
      Interim Report and Accounts does not constitute an invitation or
      inducement to any person to subscribe for or otherwise acquire
      securities in BTG.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR LDLLBLFFFFBE -0- Nov/08/2012 07:01 GMT