The Investment column: BTG's share price puts too much store by varicose veins treatment
Tuesday 16 November 1999
Those losses narrowed markedly in the half year, from pounds 6.6m to just pounds 680,000. Even so, Ian Harvey, BTG's chief executive, is warning BTG will not necessarily break even in the full year, or even next year. Much depends on the timing of milestone payments and the exercise of options by third parties, he says.
In the period, milestone payments for Campath, a leukaemia treatment, and a sharp increase in revenues from BeneFIX, the patented gene technology that treats haemophilia, lifted revenues from technologies acquired since BTG listed in 1995.
The onset of significant and stable royalties from these licences means BTG can no longer complain that its 400-odd technologies make it misunderstood and undervalued. Campath, which has received fast-track approval in the US, is set for launch in 2000, with revenues following six months later. Royalties from BeneFIX are to expected to climb to pounds 19m in 2003, and reach pounds 88m by 2006.
BTG also sees scope for developing non-core electronics technologies owned by Lucent, the US technology giant, following its acquisition of parts of the company's smartcard portfolio.
Near-term, however, Varisolve, which treats varicose veins without the need to strip them out, will soak up cash during its development. Mr Harvey is so enthusiastic about Varisolve that he has established a wholly owned subsidiary to develop it - BTG previously licensed out its technology, or, occasionally, set up venture capital funded start-ups.
Meanwhile, BTG is surveying the globe for the next Varisolve, though progress is slow. The group typically rejects 80 per cent of the 400 inventions put to it annually. But in the half year it reviewed 400 and rejected 95 per cent.
Analysts forecast a pounds 3.23m loss for the full year and pre-tax profits of pounds 0.7m in 2001, rising to pounds 10m and earnings of 10.4p per share in 2003. The rush into technology stocks, aided by the launch of the techMARK index, has seen BTG's shares soar 80 per cent in the past month to 610p, or 55 times 2003 earnings.
Hopes for Varisolve explain the racy rating, but the commercialisation of the treatment is many years away and, at these heady levels, investors should take profits.
- 1 BBC election debate: The one photo that summed up the whole 90-minute leaders debate
- 2 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 3 18th century sex toy found in 'toilet of sword fighting school' in Poland
- 4 'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
- 5 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
General Election 2015: David Cameron catching up in polls – but he badly needs a clear lead
South Africa xenophobic attacks: Shops looted and violence on streets of Johannesburg as foreigners are forced to hide in police stations
Earthworms rain down from skies over Norway, puzzling scientists
18th century sex toy found in 'toilet of sword fighting school' in Poland
'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
General Election 2015: Polish prince challenges Nigel Farage to a duel over immigration question
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...