It was good news all round for specialist healthcare group BTG, which saw a 140% rise in revenue and a 131% rise in gross profit as a result of high sales of its CroFab snake-bite treatment.
Revenue for the six months ended 30 September period soared from £46.1m last year to £110.6m this time round, reflecting in part the decision of the company to take direct responsibility for sales of its CroFab and DigiFab critical care products in the US, plus the acquisition of Biocompatibles in January of this year. The group's Licensing & Biotechnology segment also put in a good shift.
BTG advised that its revenues are strongly first-half weighted, owing to the seasonality of CroFab and a boost from BeneFIX royalties, plus two one-off milestones from ZYTIGA. Full-year revenues are expected to be in the range of £160m to £165m.
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Profit before tax of £19.2m shot up from £1.6m last year. This broadly reflects an increased profit contribution from the group's operating segments of £38.3m, offset by impairments of acquired intangible assets, investments and tangible assets of £15.5m, plus increased investment in research and development activities of £5.7m.
Chief executive officer Louise Makin said: "The Specialty Pharmaceuticals business is performing well, with a solid performance from CroFab, a snake antivenom, in the first biting season under direct sales and DigiFab, a toxicity treatment, sales benefiting from the withdrawal of Digibind and responding positively to promotional activities."
Reported earnings per share rose from 0.9p to 3.9p, while underlying basic earnings per share, which is a figure adjusted for acquisitions and reorganisation costs, surged to 7.7p from 2.3p last year.
Cash and cash equivalents rose from £73.9m at the end of March to £92.9m at the end of September.
Broker Peel Hunt, which rates the shares a "buy", responded to the update by cranking up its price target from 300p to 320p.
"We see four near-term drivers of growth emerging," explained Peel Hunt analyst Dr. Paul Cuddon.
"Zytiga/Campath royalties are beginning to offset the loss of Benefix (which may
be extended into H2 [second half] pending legal discussions); direct control of CroFab and DigiFab in the US provides a channel to leverage. Varisolve is nearing the end of its development phase with encouraging anecdotal feedback and the beads business looks primed for strong growth subject to increased R&D investment," Dr. Cuddon said.
"We believe the latter two opportunities are each capable of £100m in high margin sales," he added.
finnCap, however, believes that the share price is up with events, and rates the shares a "hold".
"With key triggers for the shares (Varisolve and CytoFab clinical results) occurring towards the middle of next year, we rate the shares a Hold and retain our 285p price target," said finnCap analyst, Keith Redpath.
The share price rose 2.99% to 295.8p by 13:19.
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