BTG 's results showed the specialty pharmaceuticals company's ability to harvest unlikely sources of cash - anti-venom, hovercraft, artificial knees - with reserves rising to an all-time high. But the company will need that cash over the next two years after its decision to press on alone with the development and commercialisation of its varicose veins product Varisolve.
Chief executive Louise Makin said the decision was based on commercial realities: "There aren't that many operators in the varicose veins space and we would have needed to give away a large part of the margin to secure a partnership deal." Instead, BTG has gone for the much higher risk, but potentially more lucrative option of in-house development and marketing. Ms Makin said the total cost for the Phase III trial for Varisolve in the US, and building a sales-force, would be around $70m (£49m), and would add up to $20m a year to fixed costs. Such a large outlay requires existing costs to be controlled and £9m was cut from research & development spending to finish the year at £27m. The company also booked £9.1m of restructuring costs.
Broker KBC Peel Hunt forecasts pre-tax losses of £10.2m and a loss per share of 3p in the current financial year (2010: £9.1m/EPS of 4.4p).
BTG (BGC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 162p | MARKET VALUE: | £417m | |
| TOUCH: | 162-163p | 12-MONTH HIGH: | 203p | LOW:141p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 37 | |
| NET ASSET VALUE: | 83p* | NET CASH: | £81.3m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 50.2 | 1.5 | 1.0 | nil |
| 2007 | 45.7 | 2.6 | 1.6 | nil |
| 2008 | 75.0 | 10.7 | 5.9 | nil |
| 2009 | 84.8 | -11.3 | -7.1 | nil |
| 2010 | 98.5 | 9.1 | 4.4 | nil |
| % change | +16 | - | - | - |
*Includes intangible assets of £183m, or 71p a share | ||||
