BTG has dropped back after the healthcare group despite an in-line trading update.
The company said it continued to expect full year revenues of between £275m and £285m, and planned to launch its varicose veins treatment Varithena in the US during the second quarter of the year, after it received regulatory approval in November.
In its licensing business, sales of Zytiga for prostrate cancer - licensed to Johnson and Johnson - continued to grow, generating increased revenues. But the Lemtrada treatment for multiple sclerosis - licensed to Sanofi Genzyme - was not ready for approval in the US despite receiving the go-ahead in Canada and Australia. BTG said Genzyme planned to appeal the US decision, which called for further clinical trials.
BTG's shares - which have been strong performers since October - have fallen 21.5p or 3.5% to 584p. Keith Redpath at finnCap said:
Trading remains in line with expectations and BTG reiterates its full-year sales guidance: we are at the top end of this range. We make no changes to our forecasts. We continue to believe BTG is over valued at these levels and reiterate our 345p price target, which would place the shares on a similar rating to other speciality pharmaceutical companies. Consequently we remain sellers of the stock.
N+1 Singer was also negative, with analyst Elizabeth Klein saying:
With our more conservative long-term views on both Varithena and Lemtrada, we believe that the current share price is significantly overvalued and retain our 488p sum of the parts valuation. We would take this news today as an opportunity to continue to sell.
But Dr Paul Cuddon at Peel Hunt was upbeat about the business:
After a very strong 2013, BTG has begun 2014 with a solid update that reassures that the medium-term plan is on track. We await updates on Varithena pricing, and the strategy to expand outside the US reimbursed sector but remain buyers in expectation of incremental positive updates on Varithena and Zytiga.
