BTG heads to the black
Article Date: Feb 07 2006Medical innovator BTG hopes to achieve profitability next year or earlier, if it can negotiate deals for key products.
Fully-listed BTG's fortunes have been rising since chief executive officer Louise Makin started to refocus its strategy on a core group of medical projects and the US Food & Drugs Administration last summer lifted a 'hold' order on the company's Varisolve varicose vein treatment and accepted a protocol for Phase II clinical trials. The company, which will soon have spent £65 million on Varisolve since 1998, says it has had 'a very good response' and could clinch a deal this year, to break into the £2.5 billion varicose vein market.
Last week, BTG, which cut its latest interim loss from £13.8 million to £1.9 million, licensed compounds with potential application to Alzheimer's disease to the Senexis group. BTG and the heavyweight Wellcome Trust are to invest £500,000 each into Senexis.
Meanwhile, the company has granted an option to Aussie-quoted QRSciences Holdings to acquire the rights to BTG's portfolio of NQR explosives and drug detection patents. Makin argues this agreement 'is in keeping with our strategy to focus on medical innovations, while realising value from our legacy physical sciences portfolio'.
After losing £34 million in the year to last March, BTG, which had £47 million cash at the half-year stage, could cut its deficit to £1.4 million in 2005-06, says broker Evolution, and move into pre-tax profits of £12.6 million the next year. That could translate into earnings of 8.7p a share, contends Evolution, putting the shares at 215.75p — down from 2003's 438p high but up from last year's 81p low — on a prospective p/e ratio of 24.5.
With more potentially lucrative licensing deals on the cards, the recovery should continue.
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