BTG reports strong half year
This article was originally published in Scrip
Executive Summary
BTG reported better than expected profits in the first half of 2008, its seventh consecutive six-month period in profit.
BTG reported better than expected profits in the first half of 2008, its seventh consecutive six-month period in profit.
Net profits of £3.2 million were lower than in the same period last year, when they reached £13.4 million, mainly because of one-off gains. Analysts' consensus estimate was just £3.7 million profit for the full year.
The results put BTG in a robust position as it gears up to buy Protherics (Scrip Online, September 18th, 2008). The all-share purchase is due to be completed on December 4th after Protherics' shareholders approved the acquisition this week.
The move will enable the combined company to develop its later-stage hospital and speciality product portfolio after Protherics regains the US distribution rights to its crotalid antivenom CroFab and DigiFab, a digoxin antidote, from Nycomed in 2010.
Dr Louise Makin, BTG's CEO, said that BTG as a standalone business was very strong and she was confident about its future prospects. The company was in a good position to license out products and seek new acquisitions, whether products or companies, she added.
BTG is halting certain early-stage compounds, and is licensing out the late-stage preclinical anticancer BGC 945 to Onyx Pharmaceuticals. "Historically we shared a proportion of revenues, but this time we're only giving away 10% to the discoverers," said Dr Makin.
value of inflexion
BTG has increased its cash reserves by £500,000 to £57.5 million, providing enough money to take all of its products through to the next value point of inflexion alone, Dr Makin said.
It hopes to start a Phase III study for its most advanced pipeline product, Varisolve (polidocanol), a potential varicose vein therapy, in mid-2009. Recently released Phase II results showed that it did not cause cerebral injury (Scrip Online, November 10th, 2008). The company is in discussions with potential development and marketing partners.
Three other products are expected to advance to Phase II trials in 2009. Phase II studies for BGC20-0134 in multiple sclerosis and BGC20-1531 in migraine are planned for the first half of next year and BTG is completing preparatory Phase II work for BGC20-1259 in Alzheimer's disease.
Total revenue, including shared revenue, for the six months to September 30th dropped by 37% to £30.2 million, but this was largely because of a fall in non-recurring revenues. However, recurring royalties rose by 17% to £24.2 million.
Total R&D expenses for the first half rose by 43% to £6.9 million, although BTG expects expenditure in the second half to be slightly lower as several programmes are in the preparatory phase. R&D guidance for the combined company is around £20 million by 2010-11.
Dr Makin expected the integration of Protherics to be fairly smooth, as the two companies had similar models, particularly in R&D. Protherics' strategy is based on out-licensing and BTG would continue this where it saw fit, she added.