REG - BTG PLC - Half Yearly Report - Part 1

Land SecuritiesAnnouncement

10/11/2015 07:01

RNS Number : 1126F
BTG PLC
10 November 2015
BTG plc: Interim Results
London, UK, 10 November 2015: BTG plc (LSE: BTG), the specialist healthcare company, today announces its interim results for the six months ended 30 September 2015.
Financial summary
 Group revenue grew 20% to 229.6m (H1 14/15: 191.2m)
 Contribution grew 18% to 94.4m (H1 14/15: 80.1m)
 Operating profit before acquisition adjustments and reorganisation costs was 62.9m (H1 14/15: 56.8m)
 Adjusted earnings per share (excluding acquisition adjustments and reorganisation costs) were 35% higher at 18.7p (H1 14/15: 13.9p)
 Cash and cash equivalents at 30 September 2015 rose to 110.6m (73.8m at 31 March 2015)
Operating highlights
Interventional Medicine
 Varithena (polidocanol injectable foam) approved by Health Canada; steady progress in gaining insurance coverage and establishing appropriate payment levels in the US reimbursed sector
 Strong growth in sales of EkoSonic, capitalising on clearance for use in the treatment of pulmonary embolism
 Continued growth in Interventional Oncology franchise; EU sales force now selling Beads and TheraSphere directly; good early progress with expansion in Asia
 French-government-sponsored REVOLENS study of PneumRx Coils achieved primary endpoint; ongoing commercial activities to secure wider reimbursement in Europe; RENEW study top-line data expected end of 2015
Specialty Pharmaceuticals
 Wellstat Therapeutics' new drug application (NDA) for uridine triacetate accepted for review by the US Food and Drug Administration (FDA)
Licensing
 Good growth from Lemtrada (alemtuzumab) following US approval
 Zytiga (abiraterone acetate) boosted by payment of backdated royalties
BTG's CEO, Louise Makin, commented: "We have had a good first half, delivering double-digit revenue and contribution growth from our portfolio of products while increasing investment in our Interventional Medicine business. We anticipate sustained growth in our Interventional Oncology and EKOS products, and further progress in expanding reimbursement coverage for Varithena and the PneumRx Coils. Overall, we are making good progress in implementing our growth strategy, reinvesting the cash from our Specialty Pharmaceuticals and Licensing businesses in activities that support our goal of becoming a world leader in Interventional Medicine."
For further information contact:
BTG
FTI Consulting
Andy Burrows, VP Corporate & Investor Relations
Ben Atwell/Simon Conway
+44 (0)20 7575 1741; Mobile: +44 (0)7990 530 605
+44 (0)20 3727 1000


Stuart Hunt, Investor Relations Manager

+44 (0)20 7575 1582; Mobile: +44 (0)7815 778 536

About BTG
BTG is a growing international specialist healthcare company bringing to market innovative products in specialist areas of medicine to better serve doctors and their patients. We have a portfolio of Interventional Medicine products to advance the treatment of liver tumours, advanced emphysema, severe blood clots and varicose veins, and Specialty Pharmaceuticals that help patients overexposed to certain medications or toxins. Inspired by patient and physician needs, BTG is investing to expand its portfolio to address some of today's most complex healthcare challenges. To learn more about BTG, please visit: www.btgplc.com
OPERATING REVIEW
BTG has made good financial and operational progress over the first half of the year. Double-digit revenue growth combined with focused cost control and operational efficiencies have resulted in increased contribution to support investment into our Interventional Medicine business. Interventional Medicine revenues grew 36% (28% at constant currency), led by strong performances from the EKOS and Interventional Oncology products, and a full six months of revenues from PneumRx. Sales of Varithena (polidocanol injectable foam) are flat as we work to establish wider insurance coverage. 
Interventional Medicine
Interventional Vascular: Varithena
US physicians using Varithena continue to report positive clinical experiences and patient feedback. The number of physicians enrolled in the Varithena training programme has risen to 573, from 429 in April 2015, with 264 having treated patients, or scheduling patients for treatment, up from 216 in April 2015. 
As a new drug and new procedure, policy coverage and appropriate payment levels have to be established with each insurer, and consequently Varithena insurance claims currently take significantly longer to settle than claims for established treatment options. We are making steady progress in gaining insurance coverage, with approximately 146 million US lives (110 million in April 2015) of ~320 million total US insured lives now covered by payers who have given favourable policy coverage for Varithena and 76 million lives (50 million in April 2015) covered by payers who have also paid claims at appropriate rates for both product and procedure. 
As we move through the second year of our two-year controlled launch programme we anticipate continued progress in expanding insurance coverage, more claims being settled at appropriate payment levels and a reduction in claim settlement times. Based on this expected progress and the ongoing physician interest and positive clinical experience, we expect a tipping point in physician reordering during our 2016/17 financial year, leading to strong sales growth over time. We remain confident that Varithena can reach $250m in annual sales by 2021 in the US reimbursed and self-pay sectors.
While continuing to expand insurance coverage in the US we will also seek to establish permanent reimbursement codes. We have recently received clarification that Varithena has not been assigned a unique product J code and we will now progress plans to apply for permanent bundled CPT codes that cover the product and procedure costs.
We look forward to launching Varithena in Canada in the first half of 2016, having received regulatory approval during the period, and we are continuing development of related products to treat other venous disorders, with potential approvals from 2017. This combination of geographic expansion and new indications has the potential to achieve a further $250m in annual revenue by 2021. 
Interventional Vascular: EkoSonic Endovascular System
The use of interventional techniques in addition to standard anticoagulation therapy to treat blood clots is increasing: approximately 140,000 interventional procedures were conducted in the US over the past year compared with approximately 95,000 procedures three years ago. The EkoSonic Endovascular System is unique in that the ultrasound guided technology enables a smaller dose of thrombolytic drugs to penetrate deeper into the thrombus, resulting in complete clot dissolution and faster infusion time. The FDA clearance in 2014 for the treatment of life-threatening pulmonary embolism in the US makes it the only device on the market with this label. 
We will continue to expand on the growing US hospital base using EkoSonic and build on our leadership in the treatment of pulmonary embolism. We are also adding to the clinical evidence in treating this condition with another pulmonary embolism study, OPTALYSE, for which patient recruitment has commenced. By investing in clinical data, further commercial expansion and product innovation, we anticipate that EkoSonic has the potential to achieve sustained annual sales growth of more than 20% and will achieve annual sales of $100m to $200m by 2021. 
Interventional Oncology
BTG has a unique patient-focused franchise, being the only company providing both radiation and embolising/chemoembolising locoregional treatments for liver cancer. A good first half performance reflects the continued growth in the US of TheraSphere and the initial positive impact of expanding our EU sales force. We added our Beads products to this European sales force in April 2015, where the full impact of selling direct is expected to be realised in future years once we work through the transition from the previous distributor. 
Geographic expansion is one of the key growth drivers of our franchise and in the period we hired our first sales representatives in Canada, who are initially detailing TheraSphere. In Asia, our partner SciClone Pharmaceuticals, Inc. won its first provincial tender for DC Bead in China, where the first patient has been treated, and in Japan our partner Eisai Co., Ltd received expanded approval for DC Bead to treat hypervascular tumours and arteriovenous malformations. TheraSphere has been approved in the growing markets of Singapore and South Korea. 
Through ongoing activities to support product innovation, geographic expansion and new indications, we expect to deliver around mid-teens revenue growth on average annually and our target is to achieve annual sales of $300m to $400m by 2021. 
Interventional Pulmonology
Emphysema is a progressive disease in which the natural architecture of the lungs is damaged and lung function declines. There are more than 5 million people with advanced emphysema (GOLD stages III and IV) in the US and five largest EU countries combined, resulting in a significant economic burden on healthcare systems from in-patient and out-patient care costs. There is no cure, and the current standard of care involving drug therapy, supplemental oxygen and pulmonary rehabilitation becomes much less effective at relieving symptoms over time.
PneumRx Coils have been shown in European clinical studies to improve quality of life for emphysema patients. In May 2015 we reported top-line data from the French-government-sponsored REVOLENS study, showing that at six months post-treatment the PneumRx Coils were superior to the standard of care for improving exercise capacity in patients with severe emphysema.
Interventional Pulmonology is a nascent medical field and our sales are currently concentrated in certain European markets including Germany, Turkey, Switzerland and Spain. Our commercial focus is around securing wider and full reimbursement in these and other European markets as well as raising the overall profile of this condition and of the role of the PneumRx Coils in treating it as more clinical evidence emerges.
In the US, we anticipate top-line data from the RENEW study around the end of 2015 and intend to submit a PMA application in H1 2016. A priority review has been granted which could lead to potential US approval around the end of 2016.
PneumRx has strong growth potential and we are targeting sales of $250m by 2021.
Specialty Pharmaceuticals
Specialty Pharmaceuticals is a highly cash generative business for BTG and our products are well established, niche antidotes serving bounded markets. Seasonal weather patterns in the US have led to slightly reduced wholesaler orders for the snakebite treatment CroFab and we have also seen lower orders for the digoxin overdose treatment DigiFab compared with the prior period, which benefitted from cyclical replacement of expired stock by US hospitals. Voraxaze, the treatment for high-dose methotrexate toxicity, continues to grow through greater awareness in US hospitals and named-patient sales outside the US.
In the period our partner Wellstat Therapeutics filed a new drug application (NDA) in the US for uridine triacetate, a treatment for patients at risk of serious toxicity following an overdose of the chemotherapy agent 5-fluorouracil (5-FU). This was accepted for review by the FDA, with a Prescription Drug User Fee Act action date in March 2016. We have realigned our sales force into two field groups, with one focusing on CroFab and DigiFab and the other on oncology accounts for Voraxaze and, if approved, uridine triacetate.
We anticipate that our deep understanding of our customers and strong relationships within relevant hospitals will ensure the continued leadership of this business as a provider of niche antidote products. Following two years of 20%+ growth, we anticipate a reversion to more typical mid-to-high single digit average annual revenue growth in future.
Licensing
Strong revenue growth in the first half was driven by Sanofi/Genzyme's Lemtrada (alemtuzumab) following its approval in the US for the treatment of multiple sclerosis. Revenues for Zytiga (abiraterone acetate), Johnson & Johnson's treatment for advanced prostate cancer, were also higher, boosted by an 8.5m payment for backdated royalties. 
FINANCIAL REVIEW
BTG's first-half results reflect the Group's long-term objective of achieving sustained, profitable growth by using the increasing cash generation from the Specialty Pharmaceuticals and Licensing businesses to invest in high growth opportunities in Interventional Medicine. These results include a full six month's contribution from PneumRx, following the acquisition in January 2015. Given the high proportion of US$ denominated revenue, movements in the US$ to sterling exchange rate influence reported revenues. The average rate for the period was $1.54 compared to $1.68 in the prior period. We have shown constant currency growth where appropriate.
Revenue
Group revenue grew by 20% to 229.6m (H1 14/15: 191.2m) and by 12% at constant currency.
Interventional Medicine revenues were 36% higher at 70.5m (H1 14/15: 51.8m) and 28% in constant currency. A strong performance from our Interventional Oncology franchise was led by sales growth of 32% from TheraSphere. This was partially offset by lower EU Beads revenue owing to ongoing channel disruption as we took back rights from a distributor at the beginning of April 2015 so that we could sell both products directly. We expect it to take approximately 12 months for this transition to fully unwind.
Interventional Vascular revenue increased by 40% to 21.0m (H1 14/15: 15.0m) driven by the increasing use of EkoSonic in US hospitals following the FDA clearance for use in the treatment of pulmonary embolism. Sales of our varicose veins treatment Varithena were flat as we continue to establish insurance coverage through the second year of our two-year controlled launch. Our first full six months of revenues in Interventional Pulmonology were 6.3m, resulting from European sales of our PneumRx Coils. 
Specialty Pharmaceuticals revenue in the first half rose marginally to 78.2m (H1 14/15: 77.8m) though were down 7% in constant currency. This reflects US seasonal weather patterns and reduced wholesaler orders of the snakebite treatment CroFab. Lower revenues of the digoxin toxicity treatment DigiFab are a result of a cyclical replacement of stock in US hospitals in the prior period. Revenue from Voraxaze, the treatment for high-dose methotrexate toxicity, continued to grow as awareness in US hospitals and named patient sales outside the US increased. 
Revenues in the Licensing segment were up by 31% to 80.9m (H1 14/15: 61.6m) growing 23% in constant currency. They continued to be dominated by royalties from Johnson & Johnson's treatment for advanced prostate cancer, Zytiga (abiraterone acetate), which were enhanced by a one-off back payment of 8.5m. The recent US approval of Sanofi/Genzyme's Lemtrada (alemtuzumab) treatment for multiple sclerosis has driven the increase in royalties whilst there has been flat growth in the Two-Part Hip Cup and modest royalties from the remaining licensed portfolio as patent expiries occur.
Detailed product sales and licensing revenues, including growth rates adjusted for constant currency are shown in the table below.


H1 15/16
(m)
H1 14/15
(m)
Change
(%)
Change at CC1(%)
Interventional Medicine
Interventional Oncology
TheraSphere
26.4
20.0
32%
25%

Beads
16.8
16.8
0%
-5%

Total Interventional Oncology
43.2
36.8
17%
11%
Interventional Vascular
EkoSonic
20.6
14.6
41%
30%

Varithena
0.4
0.4
0%
0%

Total Interventional Vascular
21.0
15.0
40%
29%
Interventional Pulmonology
PneumRx Coils
6.3
-
-
-

Total Interventional Medicine
70.5
51.8
36%
28%
Specialty Pharmaceuticals

CroFab
52.6
49.1
7%
-2%

DigiFab
17.2
21.9
-21%
-27%

Voraxaze / Other
8.4
6.8
24%
18%

Total Specialty Pharmaceuticals
78.2
77.8
1%
-7%
Licensing

Zytiga
61.2
50.6
21%
13%

Two-Part Hip Cup
5.9
5.8
2%
-7%

Lemtrada
8.2
1.3
531%
476%

Others
5.6
3.9
44%
45%

Total Licensing
80.9
61.6
31%
23%
Total

229.6
191.2
20%
12%
1At constant currency GBP vs USD ($1.54 vs $1.68 in prior year)
We anticipate that full year revenue will be in the lower half of our guidance range of 410m to 440m.
Gross profit
Gross profit of 159.3m (H1 14/15: 135.3m) rose 18% reflecting a gross margin of 69% (H1 14/15: 71%). A fair value adjustment relating to the PneumRx acquisition reduced gross profit by 1.5m. The Interventional Medicine gross margin of 70% (H1 14/15:73%) is expected to increase over time as revenues build across the portfolio. In Specialty Pharmaceuticals the gross margin increased to 88% (H1 14/15: 85%) driven by cost efficiencies and product mix. Licensing gross margin held steady at 51% (H1 14/15: 51%). The blended Group gross margin is expected to remain stable at approximately 70% in the near term.
Contribution
Contribution is defined as gross profit less selling, general and administrative (SG&A) expenditure and broadly reflects the cash generated by the business before any investment in research & development (R&D) or capital activities. During the period SG&A increased in line with expectations to 64.9m (H1 14/15: 55.2m) and contribution increased to 94.4m (H1 14/15: 80.1m). The contribution margin was 41% (H1 14/15: 42%). 
The expected increase in SG&A primarily reflects the acquisition of PneumRx and increased investment in the commercial capabilities of the rest of the Interventional Medicine segment. Investments include costs associated with the US launch of Varithena, for which the US sales force was increased, and the commercial expansion of our Interventional Oncology products in Europe and Asia. 
The Specialty Pharmaceuticals and Licensing segments are more established and delivered contribution margins of 74% (H1 14/15: 69%) and 37% (H1 14/15: 28%) respectively. Maintaining disciplined cost control in these segments enables us to invest in the commercial capabilities that will generate revenue in the Interventional Medicine segment, which currently has a 10% contribution margin. As we deliver revenue growth in the various Interventional Medicine businesses we expect the contribution of this segment to increase.
Group SG&A is expected to be in the range 142m to 148m for the full year.
Operating profit
Investment in research and development increased to 33.6m(H1 14/15: 27.2m). This planned increase reflects greater investment in a broader portfolio of innovation and development programmes, including development of innovative Bead products, hardware development and studies to support indication expansion for the EkoSonic products, the acceleration of the TheraSphere Phase III trials, studies to support US approval of the PneumRx Coils and ongoing regulatory, clinical and medical affairs support for the expanded portfolio of marketed products. Over the full year R&D expenditure is expected to be in the range 75m to 85m.
The Group's exposure to the US$ revenues and costs have resulted in the recognition of foreign exchange gains of 0.6m (H1 14/15: 3.6m gain).
Operating profit before acquisition adjustments and reorganisation costs was 62.9m (H1 14/15: 56.8m) reflecting higher revenue growth partially offset by reinvestment in SG&A and R&D supporting Interventional Medicine. 
Acquisition adjustments include the fair value of inventory acquired with PneumRx (1.5m). Amortisation of intangible assets of 17.2m (H1 14/15: 13.1m) has increased to reflect the impact of PneumRx, which was acquired in January 2015. 
Financial expense/income
The Group's net financial income was 8.7m (H1 14/15: net financial expense of 5.2m). During the period a 12.7m ($20m) liability relating to the first PneumRx acquisition milestone payment was released as the likelihood of payment was deemed remote. This was offset by 5.2m of fair value adjustments to other contingent considerations. In addition there was a gain on the mark-to-market of foreign exchange forward contracts of 1.7m (H1 14/15: loss of 3.4m).
Profit before tax and taxation
Profit before tax for the Group's interim period is 52.9m (H1 14/15: 37.6m). Group profits arise in the UK, the United States and other overseas territories and as a consequence the effective tax rate is a blend of the varying tax rates in different jurisdictions.
In the period the Group has recognised a tax charge of 1.6m (H1 14/15: credit of 1.6m). The effective tax rate of 3% is due to a combination of utilisation of tax losses plus the deferred tax impact on the amortisation of intangible assets and deferred tax assets. The Group's anticipated effective tax rate is expected to move toward 26% over the medium term as tax losses are utilised.
Earnings per share
Basic earnings per share were 13.4p (H1 14/15: 10.8p). The adjusted earnings per share excluding acquisition adjustments and reorganisation costs were 18.7p (H1 14/15: 13.9p).
Balance sheet
Non-current assets have decreased to 834.2m from 838.3m as at 31 March 2015. The principal movements relate to the purchase of the residual financial interest of the originator of the Varithena foam sclerotherapy technology for a one-off cash payment of 23.0m which is capitalised as an intangible asset. This is offset by intangible asset amortisation of 18.5m, property, plant and equipment depreciation of 3.2m and foreign exchange movements. 
The Group's defined benefit pension scheme as measured under IAS19 Revised - Employee Benefits increased to an asset of 17.0m at 30 September 2015 from 13.2m at 31 March 2015 principally due to an increase in the discount rate used to value the defined benefit obligation. 
Current assets have increased to 246.3m from 207.6m at 31 March 2015. Cash and cash equivalents have increased from 73.8m at 31 March 2015 to 110.6m as a result of underlying profitable growth. Inventory remained stable at 39.6m (31 March 2015: 40.5m) and receivables increased to 94.0m (31 March 2015: 91.9m) as a result of underlying business growth. 
Non-current liabilities decreased to 147.1m (31 March 2015: 171.7m). Principal movements included a decrease in the deferred tax liability position from 152.4m at 31 March 2015 to 145.2m, due to recognising tax losses predominantly arising subsequent to the acquisition of PneumRx. The reclassification of a PneumRx contingent milestone from non-current to current liabilities reduced non-current trade and other payables by 17.5m.
In current liabilities, trade and other payables increased to 121.8m (31 March 2015: 111.0m), reflecting the underlying growth of the business and movements in the PneumRx contingent consideration milestones. 
Cash flow 
The business generated 68.1m from operating activities (H1 14/15: 54.3m), reflecting good cash generation in the business offset by the cash outflow of 23.0m for the one-off cash payment for the purchase of the residual financial interest of the Varithena. BTG ended the period with cash and cash equivalents of 110.6m (31 March 2015: 73.8m).
In November the group signed a new 100m multi-currency revolving credit facility with an option to extend by a further 100m.This facility has a three year term that can be extended up to five years and replaces the existing 60m facility.
Summary and outlook
The Group has delivered a good overall financial performance in the first six months of the year and is on track for double digit revenue growth over the full year. We will continue to drive our financial strategy of optimising the cash generation in our Specialty Pharmaceuticals and Licensing businesses so that we can make the necessary investments to drive sustained, profitable growth and achieve our vision to become a world leader in Interventional Medicine therapies. 
CONDENSED CONSOLIDATED INCOMESTATEMENT
for the six months ended 30 September 2015


Six months ended 30 September 2015
Six months ended 30 September 2014


Results before acquisition adjustments and reorganisation costs
Acquisition adjustments and reorganisation costs
Total
Results before acquisition adjustments and reorganisation costs
Acquisition adjustments and reorganisation costs 
Total 

Note
m
m
m
m
m
m








Revenue
2
229.6
-
229.6
191.2
-
191.2
Cost of sales
2
(68.8)
(1.5)
(70.3)
(55.9)
-
(55.9)
Gross profit
2
160.8
(1.5)
159.3
135.3
-
135.3
Operating Expenses:







Amortisation of acquired intangible assets

-
(17.2)
(17.2)
-
(13.1)
(13.1)
Foreign exchange gains
3
0.6
-
0.6
3.6
-
3.6
Selling, general and administrative expenses
2
(64.9)
-
(64.9)
(55.2)
-
(55.2)
Operating expenses: total

(64.3)
(17.2)
(81.5)
(51.6)
(13.1)
(64.7)
Research and development

(33.6)
-
(33.6)
(27.2)
-
(27.2)
Profit on disposal of property, plant and equipment and intangible assets

-
-
-
0.3
-
0.3
Acquisition and reorganisation costs
9
-
-
-
-
(0.9)
(0.9)
Operating profit

62.9
(18.7)
44.2
56.8
(14.0)
42.8
Financial income
4
1.8
12.7
14.5
-
-
-
Financial expense
4
(0.6)
(5.2)
(5.8)
(3.9)
(1.3)
(5.2)
Profit before tax

64.1
(11.2)
52.9
52.9
(15.3)
37.6
Tax (charge)/credit
5


(1.6)


1.6
Profit for the period 



51.3


39.2
Earnings per share







Basic earnings per share 
6


13.4p


10.8p
Diluted earnings per share 
6


13.2p


10.7p
All activities arose from continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2015


Six months ended
30 September 
2015
Six months ended 
30 September
2014

Note
m
m




Profit for the period

51.3
39.2




Other comprehensive income



Items that may be reclassified subsequently to profit or loss



Foreign exchange translation differences

(8.5)
8.6
Items that will not be reclassified subsequently to profit or loss



Actuarial gain/(loss) on defined benefit pension scheme
8
2.4
(1.8)
Deferred tax on defined benefit pension scheme asset

(1.3)
0.1
Other comprehensive income for the period

(7.4)
6.9
Total comprehensive income for the period

43.9
4.1
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 September 2015


30 September 
2015
31 March 
2015
30 September
2014

Note
m
m
m
ASSETS




Non-current assets




Goodwill 
7,9
181.3
183.8
125.5
Intangible assets
7,9
592.2
597.9
392.3
Property, plant and equipment

33.9
35.5
32.5
Other investments

3.0
3.0
3.0
Deferred tax assets

6.8
4.9
6.4
Employee benefits
8
17.0
13.2
7.6


834.2
838.3
567.3





Current assets




Inventories

39.6
40.5
30.5
Trade and other receivables

94.0
91.9
80.0
Corporation tax receivable

0.9
1.4
1.5
Derivative financial instruments

1.2
-
2.0
Cash and cash equivalents

110.6
73.8
78.0


246.3
207.6
192.0
Total assets

1,080.5
1,045.9
759.3





EQUITY




Share capital

38.3
38.2
36.3
Share premium account

434.3
433.8
289.7
Merger reserve

317.8
317.8
317.8
Other reserves

0.9
9.4
(23.6)
Retained earnings

13.9
(40.6)
(39.2)
Total equity attributable to equity holders of the parent
805.2
758.6
581.0





LIABILITIES




Non-current liabilities




Trade and other payables

0.4
17.9
3.0
Deferred tax liabilities

145.2
152.4
82.0
Provisions

1.5
1.4
0.7


147.1
171.7
85.7





Current liabilities




Trade and other payables

121.8
111.0
81.2
Derivative financial instruments

0.3
0.9
0.1
Corporation tax payable

5.7
3.2
10.8
Provisions

0.4
0.5
0.5


128.2
115.6
92.6
Total liabilities

275.3
287.3
178.3
Total equity and liabilities

1,080.5
1,045.9
759.3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 September 2015


Six months ended 30 September 
2015
Six months ended 30 September 
2014

Note
m
m
Profit after tax for the period

51.3
39.2
Tax charge/(credit)
5
1.6
(1.6)
Financial income
4
(14.5)
-
Financial expense
4
5.8
5.2
Operating profit

44.2
42.8




Adjustments for:



 Profit on disposal of property, plant and equipment and intangible assets

-
(0.3)
 Amortisation of intangible assets

18.5
13.7
 Depreciation on property, plant and equipment

3.2
2.5
 Share-based payments

2.5
3.1
 Pension scheme funding
8
(1.2)
(1.2)
 Fair value adjustments

1.5
-
Cash flows from operations before movements in working capital

68.7
60.6




Increase in inventories

(0.7)
(3.4)
Increase in trade and other receivables

(1.9)
(4.9)
Increase in trade and other payables

2.0
1.8
Increase in provisions

-
0.2
Cash generated from operations

68.1
54.3




Taxation paid

(5.2)
(11.3)
Net cash inflow from operating activities

62.9
43.0




Cash flows from investing activities



Purchases of intangible assets
7
(23.4)
(0.1)
Purchases of property, plant and equipment

(2.6)
(3.6)
Acquisition of businesses net of cash acquired
9
-
(1.5)
Net cash outflow from investing activities

(26.0)
(5.2)




Cash flows from financing activities



Proceeds from issue of shares

0.6
1.2
Other financing activities

(0.5)
0.1
Net cash inflow from financing activities

0.1
1.3




Increase in cash and cash equivalents
37.0
39.1
Cash and cash equivalents at start of period
73.8
38.2
Effect of exchange rate fluctuations on cash held
(0.2)
0.7
Cash and cash equivalents at end of period
110.6
78.0
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2015


Share capital
Share premium
Merger reserve
Other reserves
Retained earnings
Total equity


m
m
m
m
m
m
At 1 April 2015

38.2
433.8
317.8
9.4
(40.6)
758.6








Profit for the period

-
-
-
-
51.3
51.3
Other comprehensive income

-
-
-
(8.5)
1.1
(7.4)
Total comprehensive income for the period

-
-
-
(8.5)
52.4
43.9








Transactions with owners:







Issue of ordinary shares

0.1
0.5
-
-
-
0.6
Movement in shares held by the Trust

-
-
-
-
(0.4)
(0.4)
Share-based payments

-
-
-
-
2.5
2.5
At 30 September 2015

38.3
434.3
317.8
0.9
13.9
805.2


Share capital
Share premium
Merger reserve
Other reserves
Retained earnings
Total equity


m
m
m
m
m
m
At 1 April 2014

36.1
288.7
317.8
(32.2)
(80.0)
530.4








Profit for the period

-
-
-
-
39.2
39.2
Other comprehensive income

-
-
-
8.6
(1.7)
6.9
Total comprehensive income for the period

-
-
-
8.6
37.5
46.1








Transactions with owners:







Issue of ordinary shares

0.2
1.0
-
-
-
1.2
Movement in shares held by the Trust

-
-
-
-
0.2
0.2
Share-based payments

-
-
-
-
3.1
3.1
At 30 September 2014

36.3
289.7
317.8
(23.6)
(39.2)
581.0
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 contain all of the information which International Financial Reporting Standards (IFRS) would require for a complete set of annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2015.
These condensed unaudited consolidated interim financial statements were approved by the Board of Directors on 9 November 2015.
Comparative financial information
The comparative figures for the financial year ended 31 March 2015 do not constitute the Group's statutory accounts for that financial year. Statutory accounts for the year ended 31 March 2015, prepared in accordance with International Financial Reporting Standards as adopted by the EU ('Adopted IFRSs') and as issued by the International Accounting Standards Board, have been reported on by the Group's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor 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
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 2015.
No standard and interpretations recently adopted by the EU have a significant impact on the Group.
No standard and interpretations issued by the EU but not yet effective are expected to have a have a significantimpact on the Group.
IFRS 15 'Revenue from Contracts with Customers' was issued by the IASB in May 2014, effective for accounting periods beginning on or after 1 January 2018. It has not yet been endorsed by the EU. The Group is currently assessing the impact, if any, of IFRS 15 on the Group's consolidated financial statements.
Acquisition adjustments and reorganisation costs
The condensed consolidated income statement includes a separate column to disclose acquisition adjustments and reorganisation costs arising on corporate acquisitions. Material adjustments relate to the acquisitions of:
 PneumRx, Inc. in January 2015;
 EKOS Corporation in July 2013;
 Targeted Therapies Division of Nordion Inc. in July 2013;
 Biocompatibles International plc in January 2011; and
 Protherics PLC in December 2008.
The costs relate to the following:
 Amortisation and impairment arising on intangible assets acquired;
 Transaction costs incurred with professional advisors in relation to the completion of corporate acquisitions;
 The release of the fair value uplift of inventory acquired;
 Reorganisation costs comprising acquisition related integration costs, redundancy programmes, property costs and asset impairments; and
 Fair value adjustments to contingent consideration on corporate acquisitions.
Going concern and liquidity
After making 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, distribution partners, wholesalers 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 licensees;
 Many of the Group's sales products are life-saving in nature, providing some protection against an uncertain economic outlook; and
 In April 2013, the Group signed a 60m multi-currency revolving credit facility providing access to funds for a period of three years to April 2016. This facility remains undrawn.
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 in the US, when the product is in highest demand, runs from March to October.
2. Operating segments
The Group is aligned behind three reportable segments, being Interventional Medicine, Specialty Pharmaceuticals and Licensing.
The acquisition of PneumRx, Inc. on 7 January 2015 is included within the Interventional Medicine operating segment.
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 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 2015

Interventional Medicine
Specialty Pharmaceuticals
Licensing
Total

m
m
m
m





Revenue
70.5
78.2
80.9
229.6
Cost of Sales1
(21.3)
(9.0)
(40.0)
(70.3)
Gross Profit
49.2
69.2
40.9
159.3
Selling, general and administrative expenses
(42.1)
(11.6)
(11.2)
(64.9)
Contribution
7.1
57.6
29.7
94.4





Amortisation of acquired intangibles



(17.2)
Foreign exchange gains



0.6
Research and development



(33.6)
Profit on disposal of property, plant and equipment and intangible assets



-
Acquisition and reorganisation costs



-
Operating profit



44.2
Financial income



14.5
Financial expense



(5.8)
Profit before tax



52.9
Tax



(1.6)
Profit for the period



51.3
Unallocated assets



1,080.5
1) 2015 Cost of Sales includes a 1.5m release of a fair value adjustment to inventory purchased on the acquisition of PneumRx, Inc. on 7 January 2015 within the Interventional Medicine segment. This release represents the reversal of a fair value uplift applied to inventory purchased on acquisition recognised through the income statement as the product is sold.

 Six months ended 30 September 2014

Interventional Medicine
Specialty Pharmaceuticals
Licensing
Total

m
m
m
m





Revenue
51.8
77.8
61.6
191.2
Cost of Sales
(14.2)
(11.8)
(29.9)
(55.9)
Gross Profit
37.6
66.0
31.7
135.3
Selling, general and administrative expenses
(28.8)
(12.0)
(14.4)
(55.2)
Contribution
8.8
54.0
17.3
80.1





Amortisation of acquired intangibles



(13.1)
Foreign exchange gains



3.6
Research and development



(27.2)
Profit on disposal of property, plant and equipment and intangible assets



0.3
Acquisition and reorganisation costs



(0.9)
Operating profit



42.8
Financial income



-
Financial expense



(5.2)
Profit before tax



37.6
Tax



1.6
Profit for the period



39.2
Unallocated assets



759.3
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
ended 
30 September 
2015
Six months
ended 
30 September 
2014

m
m
USA
203.7
171.2
Europe
19.5
14.2
Other regions
6.4
5.8

229.6
191.2
Revenue from major products and services
Six months 
ended 
30 September 
2015
Six months 
ended 
30 September 
2014

m
m
Product sales
148.7
129.6
Royalties
80.9
61.6

229.6
191.2
Major customers
Products that utilise the Group's Intellectual Property Rights are sold by licensees. Royalty income is derived from over 50 licences. One licence individually generated royalty income in excess of 10% of Group revenue of 61.2m (H1 14/15: one licence individually generated 50.6m).
The Group's marketed products are sold both directly and through distribution agreements in the USA, Europe and Asia Pacific region. No individual customer generated income in excess of 10% of Group revenue (H1 14/15: one customer individually generated product income of 20.6m).
3. Foreign exchange gains and losses in the income statement
During the six months ended 30 September 2015 the Group recognised foreign exchange gains of 0.6m
(H1 14/15: gains of 3.6m) 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 14.5m (H1 14/15: included within "Financial expense" of 5.2m) is 1.7m (H1 14/15: 3.4m) which represents the movement in the fair value of the Group's foreign exchange forward contracts.
4. Financial income and expense


Six months 
ended
30 September 
2015
Six months
ended 
30 September
2014

Note
m
m
Interest receivable on money market and bank deposits

0.1
-
Fair value movement on foreign exchange forward contracts

1.7
-
Fair value changes on contingent consideration 
10
12.7
-
Financial income

14.5
-




Fair value movement on foreign exchange forward contracts

-
3.4
Fair value changes on contingent consideration 
10
5.2
1.3
Other financial expense

0.6
0.5
Financial expense

5.8
5.2
5. Tax

Six months 
ended 
30 September 
2015
Six months 
ended 
30 September 
2014

m
m
Current tax


Current tax charge
8.5
14.8



Deferred tax


Decrease in net deferred tax liability
(5.0)
(16.4)
Increase in net deferred tax asset 
(1.9)
-
Total tax charge/(credit) for the period
1.6
(1.6)
Tax for each six month period has been provided on the basis of the anticipated tax charge/(credit) for the full year. The current tax charge of 8.5m (H1 14/15: 14.8m) principally relates to US federal and state taxes.
The deferred tax credit of 6.9m (H1 14/15: 16.4m credit) principally reflects the reduction in the deferred tax liability recognised on acquired intangible assets as these assets are amortised or impaired (14.4m) and the recognition of deferred tax assets (13.7m), offset by use of recognised tax losses (17.6m). 38.5m of previously unrecognised tax losses are expected to be recognised in the year due to the expectation that there will be taxable profits in the future against which they can be utilised.
6. Earnings per share
The calculation of basic and diluted earnings per share is based on the following data:

Six months
Ended
30 September 
2015
Six months
ended 
30 September 
2014
Profit for the period (m)
51.3
39.2
Earnings per share (p)


 Basic
13.4
10.8
 Diluted
13.2
10.7



Number of shares (m)


Weighted average number of shares - basic
382.3
361.6
Effect of share options in issue
5.9
5.3
Weighted average number of shares - diluted
388.2
366.9
The calculation of basic and diluted earnings per share from underlying earnings is based on the following data:

Six months 
ended
30 September 
2015
Six months 
ended 
30 September 
2014
Profit for the period from operations (m)
51.3
39.2
Add back:


Fair value adjustment on acquired inventory(i)
0.9
-
Amortisation of acquired intangible fixed assets(ii)
11.7
9.1
Acquisition and reorganisation costs(iii)
-
0.7
Fair value changes on contingent consideration(iv)
7.5
1.3
Underlying earnings
71.4
50.3



Earnings per share (p)


Basic
18.7
13.9
Diluted
18.4
13.7
Adjustments to profit are shown after taking into account the tax effect of such adjustments on the results as shown in the condensed consolidated income statement as follows:
i. In the period ended 30 September 2015 there was 0.6m tax impact on fair value adjustment of inventory acquired of 1.5m.
ii. The release of deferred tax liability of 5.5m (H1 14/15: 4.0m) has been deducted from the amortisation of acquired intangible assets of 17.2m (H1 14/15: 13.1m) as shown in the condensed consolidated income statement.
iii. In the period ended 30 September 2014 0.2m tax impact on acquisition and reorganisation costs of 0.9m.
iv. No tax adjustment was required on the fair value changes on the contingent consideration.
The denominators used are the same as those above for both basic and diluted earnings per share.
7. Goodwill and intangible assets
a) Goodwill
Goodwill at 30 September 2015 is 181.3m (31 March 2015: 183.8m; 30 September 2014: 125.5m). The movements in the period relate to the foreign exchange retranslation of goodwill denominated in foreign currencies at the closing exchange rate at 30 September 2015.
b) Intangible assets

30 September 2015
31 March
2015
30 September 2014
Net book value
m
m
m
Developed technology(i)
461.6
486.2
366.1
Contractual relationships(i)
0.2
0.3
0.1
In-process research and development(i)
97.5
100.0
16.6
Computer software
0.5
0.7
0.6
Patents
3.1
3.2
1.9
Purchase of contractual rights(ii)
29.3
7.5
7.0

592.2
597.9
392.3
(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 through business combinations. Movements in these categories of intangible assets between 31 March 2015 and 30 September 2015 are predominately driven by amortisation charges and foreign exchange retranslation of the assets denominated in foreign currencies at the closing exchange rate at 30 September 2015.
(ii) Purchase of contractual rights
In May 2015, BTG purchased the residual financial interest of the originator of Varithena foam sclerotherapy technology for a one-off cash payment of 23.0m, ensuring that the business retains 100% of the future value of Varithena. This addition has been included in purchase of contractual rights and the asset is being amortised through cost of sales.
8. Defined benefit pension fund 
The Group has recognised a net defined benefit asset of 17.0m on the Group's balance sheet in accordance with IAS19 - Employee benefits in relation to the BTG Pension Fund (31 March 2015: asset of 13.2m; 30 September 2014: asset of 7.6m). The 3.8m increase since 31 March 2015 relates principally to an increase in the discount rate used to value the defined benefit obligation and contributions paid being higher than the cost of benefits accruing over the period. These effects are partially offset by a small increase in the inflation assumption used to value the obligation and lower than expected investment returns. Actuarial gains/losses are recognised in the condensed consolidated statement of comprehensive income.
In July 2014, the Group finalised the triennial actuarial valuation of the BTG Pension Fund as at 31 March 2013. The valuation showed a deficit of 9.8m and the Group committed to deficit repair payments of 6.0m in aggregate over the three years ending 31 March 2017. In the period to 30 September 2015, deficit repair payments of 1.2m (H1 14/15: 1.2m) have been made.
9. Business Combinations
PneumRx acquisition
In the prior year, BTG completed the acquisition of 100% of PneumRx, Inc. on 7 January 2015 for an initial cash consideration of 153.4m ($231.0m) and up to $245m in contingent consideration based upon performance related future milestones. The contingent consideration was recognised at a carrying value equal to its fair value of 28.8m using acquisition date trading assumptions and probability adjusted forecasts to assess the likelihood of revenue and FDA approval milestone payments to be made. The final determination of these fair values will be completed as soon as possible but no later than one year from the acquisition date.
PneumRx owns, manufactures and distributes RePneu Coil System (RePneu), a minimally invasive treatment for advanced emphysema, which seeks to enhance patients' quality of life by improving lung function and exercise capacity. At the date of acquisition, RePneu was in 11 European countries and had a fully recruited US pivotalclinical trial underway. A decision on US approval is anticipated during 2016. The acquisition complements BTG's Interventional Medicine platform, expanding it into the emerging area of Interventional Pulmonology.
At acquisition, intangible assets principally comprised 109.2m relating to RePneu (Europe) developed technology and 80.4m relating to RePneu (US) in-process research and development assets. The estimated useful life of the developed technology was 15 years, and amortisation expense is recorded on a straight-line basis. Goodwill arising of 51.6m, which is not deductible for tax purposes, was assigned to the Interventional Medicine operating segment. Goodwill included the values of tax impacts, assembled workforce and future potential indications for RePneu which at the time of acquisition did not meet the criteria for recognition as separate intangible assets.
Under the terms of the acquisition agreement, BTG may be due to make further contingent consideration payments dependent upon PneumRx achieving certain revenue targets and US FDA approval.
The contingent consideration payments include up to $20m payable if PneumRx meets a global revenue target in calendar year 2015 of US$35 million and US$60 million payable if US FDA approval is received before 31 December 2017. During the period, no contingent consideration payments were made. The Group recognised a 12.7m fair value movement in Financial income relating to the release of the first PneumRx acquisition milestone as the likelihood of payment was deemed remote. This was offset by 1.7m of discount unwind of the other PneumRx acquisition milestones, recognised in Financial expense. The remaining contingent consideration payments on the Statement of Financial Position are considered by management to be a level 3 financial instrument (note 10).
10. Financial risk management
Financial instruments are classified into level 1, level 2 and level 3 financial instruments. The different levels are defined as follows:
Level 1 - quoted prices in active markets for identical assets and liabilities
Level 2 - observable inputs other than quoted prices in active markets for identical assets and liabilities
Level 3 - unobservable inputs
The Group's level 1 and level 2 financial instruments comprise cash, short- and medium-term deposits, foreign currency forward contracts, and various items such as trade receivables and payables which arise directly from operations. In addition, a number of debt and equity investments, both quoted and unquoted, are held in technology based companies along with borrowings including obligations under finance leases.
The carrying amount of the Group's Level 1 and Level 2 financial instruments is a reasonable approximation of the fair value.
There have been no transfers between the levels of financial instruments in the period.
The Group's level 3 financial instruments predominantly represent:
 the contingent consideration payable on achievement of revenue targets and product approval by PneumRx following the acquisition of PneumRx, Inc. in January 2015;
 contingent consideration payable on achievement of revenue targets by EKOS following the acquisition of EKOS Corporation in July 2013;
 contingent consideration payable upon the purchase of the US commercial rights of product candidate uridine triacetate representing contingent milestone payments upon NDA acceptance and approval of the product candidate.
The movement in the level 3 financial liabilities is shown below:

2015
2014

m
m
At 1 April 
(32.7)
(5.5)
Movements in fair value
7.5
(1.3)
Currency movements
0.7
(0.2)
At 30 September
(24.5)
(7.0)
The Group recognised a fair value adjustment of 12.7m (H1 14/15: nil) related to a contingent milestone for the acquisition of PneumRx within 'Financial income'. The Group recognised a fair value adjustment of 5.2m (H1 14/15: 1.3) related to the contingent milestones for the acquisitions of PneumRx and EKOS within 'Financial expense'.
11. 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 made by BTG to Oxford University and Isis Innovations Limited under the relevant licence agreements were 15,700 in the period ended 30 September 2015 (H1 14/15: 4,100) and there were no amounts outstanding and payable at 30 September 2015 (H1 14/15: 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 safeguard through separation of duties. 
12. Post balance sheet event
Subsequent to the period end, the Group signed a new 100m multi-currency revolving credit facility providing access to funds for a period of three years to November 2018 with the option to extend for a further two years.This replaces the previous 60m facility.
Principal risks and uncertainties
We have considered the principal risks and uncertainties faced by the Group for the remaining six months of the year and do not consider them to have changed from those set out on pages 33 to 36 of the BTG plc Annual Report and Accounts 2015, 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 2015 and their respective responsibilities can be found on pages 38 to 39 of the BTG plc Annual Report and Accounts 2015.
By order of the Board 
Dr Louise Makin
Chief Executive Officer
Rolf Soderstrom
Chief Financial Officer
9 November 2015
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 2015 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 Conduct Authority ('the UK FCA'). 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 FCA.
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 2015 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA. 
Richard Broadbelt
For and on behalf of KPMG LLP 
Chartered Accountants
15 Canada Square 
London E14 5GL
9 November 2015
Shareholder information
Financial calendar
Announcement of annual results for year ended 31 March 2016
May 2016
Capita share dealing services
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Relating to beneficial owners of shares with 'information rights'
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Addresses for correspondence
Registered office and head office
Registrars
BTG plc
5 Fleet Place
London
EC4M 7RD
Tel:
+44 (0)20 7575 0000
Fax:
+44 (0)20 7575 0010
Email:
info@btgplc.com


Website:
www.btgplc.com
Registered number 2670500
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR2 4TU
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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.
BTG and the BTG roundel logo are registered trademarks of BTG International Ltd. CroFab and DigiFab are registered trademarks of BTG International Inc. Voraxaze is a registered trademark of Protherics Medicines Development Ltd. DC Bead is a registered trademark of Biocompatibles UK Ltd. TheraSphere is a registered trademark of Theragenics Corporation used under license by Biocompatibles UK Ltd. EKOS and EkoSonic are registered trademarks of EKOS Corporation. Varithena is a registered trademark of Provensis Ltd. RePneu and PneumRx are registered trademark of PneumRx, Inc. Protherics Medicines Development Ltd, Biocompatibles UK Ltd, EKOS Corporation, Provensis Ltd, and PneumRx, Inc. are all BTG International group companies. Zytiga is a trademark of Johnson & Johnson; Lemtrada is a trademark of Genzyme Corporation.

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