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How BTG is picking itself up after Varithena stumble

Growing sales in interventional medicine have helped boost group profits
May 18, 2016

Full-year results from specialist pharmaceuticals group BTG (BTG) beat market expectations, as revenue growth across all three group divisions helped to boost profits despite the rising research and development costs.

IC TIP: Hold at 599p

This performance was bolstered by a £8.5m one-off royalty payment from US giant Johnson & Johnson for prostate cancer drug Zytiga, but also reflects the positive momentum of the group's mature interventional medicine products. Oncology treatment TheraSphere and vascular device EkoSonic saw revenues increase by 21 per cent and 34 per cent, respectively. In contrast, varicose veins product Varithena continues to flounder in its early stages, and despite previous revenue expectations of at least $15m (£10.4m) last year, it delivered a tenth of that. This and pulmonary product PneumRx continued to weigh down margins in the interventional division.

Post-period-end, BTG announced the acquisition of Galil Medical to enhance its oncology offering. The target made $22m of revenue last year from its treatment for kidney tumours.

Broker JP Morgan has adjusted its forecasts and now expects adjusted pre-tax profits of £61m and EPS of 21.6p for the year to March 2017, compared with £58m and 21.5p in FY2016.

 

BTG (BTG)

ORD PRICE:599pMARKET VALUE:£2.29bn
TOUCH:598.5-599.5p12-MONTHHIGH:788pLOW: 504p
DIVIDEND YIELD:nilPE RATIO:38
NET ASSET VALUE:221p*NET CASH:£140m

Year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201219723.04.5nil
201323424.15.0nil
201429133.36.8nil
201536826.79.1nil
201644857.515.8nil
% change+22+115+74-

Ex-div: na

Payment: na

*Includes intangible assets of £787m, or 206p a share