BTG has seen its revenues boosted by recent acquisition Biocompatibles, a deal which increased its portfolio of healthcare products.
The company, best known for its Varisolve varicose veins treatment, said full year revenues rose 13% to £111.4m, including a £6m contribution from Biocompatibles, which it bought in January. But profit after tax fell from £11.3m to £9.2m despite a one off tax credit of £18.6m relating to the reorganisation of its US business. On top of this came reorganisation costs and acquisition adjustments of £15.5m.
BTG said it expected £3m worth of synergies from Biocompatibles, and has decided to take over direct marketing of its LC beads - which deliver drugs for liver cancer - in the US from 2012.
It added that US phase 3 trials for Varisolve were progressing well. Its shares have dipped 3p to 258.5p, with a mixed view from analysts. Jefferies said:
We continue to believe BTG's marketed acute care products and recurring royalties provide a valuation floor. However, our net present value (NPV) suggest the shares are overvalued. With a lack of near-term pipeline catalysts and significant future spend on high-risk Varisolve, we expect the stock to underperform EU biotech. Our 200p a share valuation comprises probability-adjusted NPVs for marketed and late-stage products.
But Peel Hunt was more positive:
BTG trades on 5.6 times enterprise value/March 2012 sales, which reflects a full year contribution from Biocompatibles. We still think this is cheap as it excludes any contribution from J&J's abiraterone, Varisolve or CytoFab, which represent the key components of our 300p price target.
