BTG Announces Preliminary Results for the Year Ended March 31, 2003.

Business Editors/Health/Medical Writers

LONDON--(BUSINESS WIRE)--May 29, 2003

BTG plc (LSE: BGC), the global technology commercialization company, today announces its audited preliminary results for the year to March 31, 2003.

Financial Highlights

    --  Turnover of GBP31.5 million (2002: GBP30.9 million)

    --  Total revenues of GBP31.5 million (2002: GBP33.2 million)

        --  Royalties on launched products GBP24.9 million (2002:
            GBP22.1 million)

            --  Factor IX - GBP11.1 million (2002: GBP10.8 million)

            --  Campath - GBP4.0 million (2002: GBP2.7 million)

        --  Milestone payments GBP1.5 million (2002: GBP1.6 million)

        --  Revenues from new license agreements GBP3.9 million (2002:
            GBP5.2 million)

    --  Pre-tax loss GBP36.2 million (2002: GBP22.6 million)

        --  Provensis development investment increased to GBP13.6
            million (2002: GBP12.6 million)

        --  Investment in other technology developments GBP1.9 million
            (2002: GBP1.0 million)

        --  Administrative costs, including GBP1.9 million
            restructuring charge, GBP33.0 million (2002: GBP31.5
            million)

    --  Net funds of GBP61.1 million (2002: GBP97.5 million)

Operational Highlights

    --  Refocused business on highest value technology sectors
        (annual savings of GBP6 million for 2003/4)

    --  European Phase III clinical trials for VARISOLVE(R) Microfoam
        completed; in US, first Phase II data submitted to FDA

    --  Agreements now in place covering manufacturing and supply of
        VARISOLVE(R) Microfoam

    --  15 new license agreements signed (of which 9 contributed
        revenues during the period)

    --  Board appointments

        --  Sir Brian Fender to be appointed Chairman; Dr Jack Leonard
            to retire at AGM

        --  Mrs Consuelo Brooke to be appointed Senior Independent
            Director

Ian Harvey, CEO of BTG plc, commented:

"During the year, we increased our focus on a smaller number of high value technology sectors, to meet the changes in the current global economic climate. The success of our business depends on the positive performance of our technology portfolio as a whole and good progress has been made across all of our technology areas. Provensis, which currently represents our greatest opportunity, achieved some significant clinical and manufacturing milestones during the period.

"As we move towards our target of profitability by 2006, excluding Provensis, we look forward to reporting further operational and financial progress through the development of individual technologies over the coming year."

Chairman's statement

BTG's business has been evolving during a period of significant change in the global economic and political climates. The impact of these changes has been felt strongly in the high tech and biotech sectors, where many established companies are struggling to grow and emerging companies are focused on surviving the downturn.

As we have said previously, this presents us with as many opportunities as challenges. Our objective over the past year has been to balance the likelihood of having to ride out tough economic conditions over the next few years, while continuing to invest in major opportunities for creating future value. We have therefore restructured our business to concentrate our investment activities on a smaller number of high-value technology sectors. This has also enabled us to reduce our cost base, which is expected to fall by approximately GBP6 million this year.

Our business model provides reasonable visibility for a significant proportion of the revenues we expect to generate over the medium term. These include the recurring royalty streams already flowing from established products, and the down-payments and royalties we anticipate from technologies that we expect to commercialize in the near future. Although less predictable, we also expect to earn revenues from other new business opportunities and technologies that are not yet in the commercialization phase. Thus, even in this harsher economic climate, we are able to reconfirm our objective of achieving profitability by 2006, excluding any impact from Provensis Ltd.

Provensis currently represents both our biggest investment and greatest opportunity. We are very encouraged by the significant progress made this year, described in detail in the Chief Executive Officer's review.

Turnover for the year of GBP31.5 million was slightly ahead of the previous year. However, total revenues, in which we include equity realizations, were GBP1.6 million lower than in the previous year when we realized GBP2.3 million profit from the sale of an equity stake. Consequently, net revenues of GBP17.8 million were GBP2.1 million less than the previous year. Investment in Provensis development increased by GBP1.0 million to GBP13.6 million, and investment in other technology development almost doubled to GBP1.9 million this year compared with GBP1.0 million the previous year. Administrative costs, including a restructuring cost of GBP1.9 million, were slightly higher at GBP33.0 million. These, together with a higher than normal patent amortization charge following December's reorganization, less net interest receivable and a write-down of equity investments, resulted in a loss before tax of GBP36.2 million (GBP22.6 million the previous year). The Board does not recommend payment of a dividend for the year.

The planned expansion of BTG's business over the past years has of necessity been curtailed by the global downturn. Nonetheless, I firmly believe that we have continued to build value in the business. This, together with the recent changes we have made to increase our focus and reduce our cost base, places us on a solid footing to continue to develop our business and to reach our target of profitability by 2006.

As stated last year, I will not stand for re-election at the Annual General Meeting on July 23, 2003. I am delighted to report that Sir Brian Fender, who brings immense understanding of BTG's business, will become Chairman. In addition, Mrs Consuelo Brooke, who joined the Board 12 months ago, will be appointed Senior Independent Director.

Jack Leonard

Chairman

Chief Executive Officer's review

In the first half of the year, we conducted a detailed review of our business that resulted in a significant restructuring of our operations. We made these changes to make sure that we can deliver on our commitment to shareholders to create a profitable, growing technology commercialization business over the medium term.

Business strategy

Our central strategy is to create a sustainable, profitable business by acquiring, developing and commercializing important life and physical science technologies that will shape tomorrow's markets. This has not changed.

The confidence to continue to pursue our strategy stems from three drivers. Firstly, universities and companies more than ever need to create commercial returns from their research outputs. The availability to us of key technologies has not abated. Secondly, product innovation will continue to drive markets and economic growth. Finally, BTG's role in this expanding market is bridging this gap, providing the patent, technical and commercial platforms for transforming scientific and technical ideas into market-leading products. We have the capabilities, resources and proven track record in commercializing technologies to take advantage of this increased market opportunity.

What has changed is our technology focus, driven by changes in the marketplace.

Marketplace

In October 2000, we raised GBP122 million to expand the business so that we could address more opportunities across a broad range of technology sectors. At that time, most sectors were growing, there was significant investment flowing into established and new companies, and there was strong competition in industry to gain access to early stage technologies.

Since then, there has been turmoil in the world's economies. This has affected many of the market sectors in which we operate, but the impact has not been uniform and demand in some sectors, especially in life sciences, remains strong.

We have a healthy flow of new technologies from universities and companies seeking to extract value from their assets. We have welcomed many new clients during the past year, including Georgetown University Medical Center and Washington University in St. Louis in the US and the University of Greenwich in the UK.

In some high tech areas, such as telecoms and IT, investment in new product development has decreased significantly. The near-term prospects for BTG realizing value from technologies addressing these markets have also reduced. We have been unable to commercialize some technologies, or to generate the value we once thought possible from others.

We believe there will be a recovery in many sectors, but this will be a gradual process that takes place over several years.

Increased focus

We have been realistic and balanced the prospects for global recovery in the near term with our available resources. We have refocused the business to concentrate our investments on the highest value technology sectors and opportunities, and have withdrawn completely from some areas where we believe that the long-term economic prospects are poor. In doing so, we may miss out on some opportunities, but we believe the strategy we are following is appropriate for the market conditions in which we are operating.

We have structured our technology investments around five business areas: oncology; ageing and neuroscience; biopharmaceuticals; semiconductor technology, including optoelectronics and nanotechnology; and an area we call strategic business development. The latter aims to exploit substantial IP-driven commercial opportunities that fall outside the four targeted areas.

A regrettable but inevitable consequence of increasing our focus was a reduction in our people of about 30%, which was completed in December. Ceasing investment in certain technology sectors and reducing our headcount will yield savings of about GBP6 million per annum from the financial year ending in March 2004. In making these changes, we have assumed that the current economic climate will continue for another two to three years. We will continue to monitor both our own operating performance and the general economic outlook. We have the flexibility to adapt our operations should circumstances change.

Summary of operational progress in 2002-3

During the period good operational progress was made which can be summarized as follows.

-- Campath(R) revenues increased by GBP1.3 million to GBP4.0

million. License extensions were granted to ILEX Oncology,

Inc. covering Far East distribution and diagnostics uses. A

phase II comparative trial started in multiple sclerosis, and

development progressed in other indications.

-- An agreement with a major manufacturer was reached for MRI,

resulting in a payment of $1.6 million this year and

anticipated payments of $1 million for each of the next three

years.

-- Hitachi signed its first sub-license for the Multi-level

cell, which increases the storage capacity of semiconductor

chips, triggering a payment to BTG.

-- Additional licenses were signed for the two-part hip cup,

with Wright Medical Technology, Inc., and for the

Electro-absorption modulator technology from BT, with Hitachi.

-- QRSciences (formerly Thorlock) signed an agreement for BTG's

NQR explosives and drug detection technology with Lockheed

Martin. The initial focus will be on screening of carry-on

baggage to increase airline security.

-- Rights to an insulin-based technology that could deliver new

insulin therapies with a more selective action on the liver

were licensed to a major pharmaceutical company.

-- BTG succeeded in expanding the scope of the approval granted

by the Environmental Protection Agency for the water treatment

technology, Active-OX(TM), paving the way for two US licensees

to expand their product offerings and sales efforts.

-- The High Court ruled in favor of BTG in a dispute with

Acambis plc concerning BTG's entitlement to 2% of Acambis's

turnover (excluding research income). Acambis has appealed and

the hearing is scheduled for October 2003.

-- Commercialization of the patent relating to GSM, GPRS and 3G

mobile communications, upheld last year by the European Patent

Office, but subject to appeal, has progressed. BTG is now

litigating against selected targets, with a hearing in Germany

scheduled for January 2004.

-- Plans also progressed for commercializing the Teleshuttle

patent portfolio, part of which covers remote updating of

software over the Internet. Formal grant of the key patent has

now been received in the US.

Provensis

The Provensis team made significant progress during the past year as the focus for VARISOLVE(R) Microfoam has shifted to completion of trials, regulatory filings and commercialization.

Clinical update

The final patient in the European Phase III trial was treated in January, and over half of the 439 patients treated with VARISOLVE(R) Microfoam have now completed their extensive one-year follow-up. A further 223 patients were treated with surgery or alternative sclerotherapy.

Data collection and consolidation are ongoing, and the final study report is due later in the year followed shortly by publication of efficacy and safety data. Preliminary indications are that the results of treatment with VARISOLVE(R) Microfoam have lived up to expectations and are in line with those observed in the European open label and Phase II studies.

In the US, the first cohort of 20 patients in the Phase II trial has been treated and data submitted to the Food & Drug Administration for review.

Manufacturing

Agreements are now in place covering each stage of the manufacturing process and the supply of VARISOLVE(R) Microfoam for clinical trials and commercial launch.

The product is an integrated bi-can unit that, at the point of use produces a sterile microfoam containing polidocanol. Croda Chemicals plc will manufacture the polidocanol in accordance with cGMP under an exclusive supply agreement; the plant is being readied for regulatory inspection. Bi-can components have been sourced from a range of established suppliers, for assembly and manufacture of the finished product by CP Pharmaceuticals on their Wrexham site. CP Pharmaceuticals has MHRA and FDA approval for the manufacture of a wide range of products including sterile dosage forms for the global market.

A pilot scale plant providing materials for clinical trials and stability studies is already operational at this site. Working with CP Pharmaceuticals and design consultants, Jacobs Engineering, we have commenced construction of a new manufacturing facility at the Wrexham site for the supply of commercial product. This facility will be owned by Provensis and operated by CP Pharmaceuticals, who will also provide full support services.

Initially, a small-scale production line will be established within the new facility to support early product launches. This can be expanded rapidly as the product becomes established and demand increases, thus providing flexibility and phasing of the manufacturing investment over a number of years. An investment of up to GBP7.4 million will be made this year to construct the outer shell and small-scale production line.

Market and commercial options

The commercial success of VARISOLVE(R) Microfoam will be driven by the strength of the regulatory package, backed up by a strong brand and IP position, and extensive technical and commercial know-how.

Recent market research with physicians and consumers has better defined the target audience and provided an increased understanding of the prevalence and demographics of varicose veins. With its large and aging population, high disposable income, familiarity with self-pay and interest in new treatment options, the US will account for a majority share of the value of VARISOLVE(R) Microfoam.

Plans to develop a strong brand position in the US and other markets are well advanced. The IP portfolio is being developed, with additional patents and patent applications already granted, filed and planned to add to the original patent assigned to BTG by the inventor of the technique that is the basis of VARISOLVE(R) Microfoam. The original patent is being challenged in Germany, where the Court of First Instance ruled it invalid. BTG believes this decision was wrong and is appealing against it, even though we believe the loss of this patent would have no impact on the commercial prospects for the product. The decision only has effect in Germany, and the patent remains in force there pending the outcome of the two-to-three year appeals process.

We are currently considering commercialization options which include the license to, or joint venture with, an established healthcare company. With only around 1000 specialist vein clinics in the US, however, another option is for Provensis to bring the product to market itself with contracted support.

Data from the European Phase III trial and additional market research studies, under way since the start of the year, will be central to the decision as to which option provides the best risk-reward profile. It is expected that, in association with the Provensis Board, the Board of BTG will decide upon the preferred commercialization option during the current financial year.

Management

Provensis has its own Board of experienced executive and independent Directors, chaired by Dr. John Preston. During the past year, as the focus has shifted from technical and clinical development to the completion of trials, regulatory filings and commercialization, the management team has also been changed and strengthened. Dr. Frank Armstrong, formerly with ICI/Zeneca Pharmaceuticals and Bayer AG, has been appointed Chief Executive Officer and Director of Provensis. We thank Dr. Paul Harper, former CEO, for his major contribution during the development period for Provensis. In addition, Provensis has appointed a new Chief Financial Officer and new VPs of Marketing and Medical & Regulatory Affairs. This team is wholly focused on market launches in the EU in 2005 and the US in 2006.

Outlook

As valuable as we believe the VARISOLVE(R) Microfoam product to be, the success of BTG's business depends upon the performance of the technology portfolio as a whole. This year, for example, we expect revenue growth to result from newer products such as Campath(R), and from technologies we expect to license or otherwise commercialize during the year. We anticipate further significant operational and financial progress in the coming year.

Ian Harvey

Chief Executive Officer

Financial results for the year to March 31, 2003

The results for the year show a modest increase in turnover and a modest reduction in total revenues. Our overhead increased slightly, and we incurred an additional cash cost of GBP1.9 million relating to our restructuring. We increased investment in technology development, Provensis accounting for GBP13.6 million, and in ventures, and consequently net funds reduced by GBP36.4 million overall to GBP61.1million.

Revenues

Turnover was GBP0.7 million higher than in the previous year at GBP31.5 million. Total revenues, in which we include any profits made from equity realizations, were this year the same as our turnover but GBP1.6 million less than last year when we realized GBP2.3 million profit from the sale of equity in Acambis plc. Despite a difficult economic climate, the trend in long term royalties is positive. Royalties from launched products grew by 13% to GBP24.9 million, having risen by 53% over the past five years. Factor IX, our largest current revenue earner, generated GBP11.1 million, slightly higher than last year, and Campath(R) contributed GBP4.0 million compared with GBP2.7 million the previous year. Campath(R) revenues included non-royalty elements related to a license extension and a cross-license.

Milestone payments at GBP1.5 million were comparable to the previous year, but were still some way short of the peak figure of GBP5.4 million in 2000. These contractual payments are made when our licensees reach development milestones. Although they indicate progress and increase confidence that the technology is moving towards the market, these payments should be treated with caution as not all of our technologies have milestones attached to them. Furthermore, timing of receipts is determined by our licensees' progress. This year, for example, we anticipated receiving an additional GBP3.0 million from Forest Laboratories Inc. on FDA approval of the oxycodone/ibuprofen product. Forest received an approvable letter from the FDA but, as the regulator requires some additional work, the payment has been deferred.

Income from new agreements at GBP3.9 million is somewhat below last year's figure of GBP5.2 million, but in line with the five-year average of GBP3.4 million. This reflects the difficulty of persuading licensees to commit capital to long term technology projects in the current climate. Notwithstanding these circumstances, we signed 15 license agreements during the year, one more than last year, of which 9 contributed revenues during the period.

Expenses

Operating expenses (mainly patent amortization) were 41% higher this year at GBP6.2 million as a consequence of focusing on a smaller number of technology areas. More patents and patent applications than usual were discontinued, resulting in an amortization charge of GBP5.0 million, 43% higher than last year.

Administrative expenses remained fairly static as anticipated. In the current year, we expect to reduce overall costs by approximately GBP6 million, the vast majority of which will come from administrative expenses. BTG's largest investment and greatest asset is its multidisciplinary workforce. In deciding to concentrate on a smaller number of high value technology sectors, there has been a 30% decrease in our employee numbers from 234 at March 31, 2002 to 164 at March 31, 2003. Most of the headcount reduction took place in the final quarter of the financial year; hence these savings will become visible when we report our results for the first half-year in November.

Loss before taxation

The operating loss, which has increased to GBP36.9 million, therefore reflects both the impact of the current economic climate and the effects of the actions we have taken in restructuring the business to address the trends we see in the future technology commercialization market.

A higher loss before tax was expected owing to increased investment in Provensis and other technology development projects and lower interest on cash deposits. Restructuring costs, which included a higher than normal patent amortization charge and redundancy payments, together with a write down of equity investments resulted in a loss before tax of GBP36.2 million, compared with GBP22.6 million last year.

Equity investments

During the year we invested GBP10 million in 12 ventures. BTG's investee companies have, on the whole, performed according to expectations. However, the reduced valuations of listed technology companies has impacted unlisted investee companies, some of which have had to raise new funds at a significant discount to previous valuations. In accordance with established accounting practice, BTG carries the value of these investments in its balance sheet at cost less provisions for permanent impairment where there has been a fund raising in the current year. Consequently we have made a provision of GBP2.5 million against our investment portfolio this year.

Cash

Our cash balance should be looked at in the context of our strategy. Three years into an investment and expansion program following our Rights Issue, we have invested selectively in technology development, principally in Provensis, and in ventures where our particular skills complement those of other investors. In the current climate we have been investing even more selectively. Consequently, we have been able to maintain a strong balance sheet and finish a year of significant investment with GBP61.1 million net funds.

Financial outlook

In the current financial year we expect to see resumption in revenue growth driven by the continued progress of established products and technologies we expect to commercialize during the year. Our costs are firmly under control as a result of the steps taken during the year to refocus the business. Investment in Provensis will increase in line with the company's plan to commence small-scale manufacturing. In other technology developments and in ventures we expect to invest at similar levels to the year under review. Our operating loss, excluding Provensis, is expected to decrease as the potential of revenue streams that were laid down many years ago begins to be realized. The overall picture is expected to show clear progress towards our target for profitability, excluding Provensis, by March 2006.

The long term strategy of the Board together with the measures we have taken in the current climate to ensure that we are investing only in the highest value technology sectors and to control our costs have positioned us well to continue to build long term value, generate short term revenues and create a sustainable, profitable technology commercialization business.

Rusi Kathoke

Chief Financial Officer

About BTG

BTG finds, develops and commercializes emerging technologies in the life and physical sciences. These innovations are protected by a strong portfolio of intellectual property that BTG develops and enhances. BTG then captures the value in these technologies through licensing and venturing activities. From the origins of its business in 1949, BTG has commercialized major innovations such as Magnetic Resonance Imaging (MRI), recombinant factor IX blood-clotting protein, Campath(R) (alemtuzumab) and Multilevel Cell (MLC) memory. BTG is quoted on the London Stock Exchange under the symbol "BGC" and operates from offices in London and Philadelphia, with representation in Tokyo. BTG operates through wholly owned subsidiaries, BTG International Ltd and BTG International Inc. in the UK and USA, respectively. Further information on BTG can be found at www.btgplc.com.

CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended March 31, 2003
                                                                GBP
                                                              million
                                                    2003        2002
---------------------------------------------------------------------
Total revenue                                      31.53       33.15
---------------------------------------------------------------------
Turnover                                           31.53       30.85
Revenue sharing                                   (13.71)     (13.26)
                                              ----------- -----------
Provensis development                             (13.57)     (12.56)
Other new technology development                   (1.94)      (1.00)
                                              ----------- -----------
Total development                                 (15.51)     (13.56)
Other operating expenses(a)                        (6.19)      (4.35)
Administrative expenses(b)                        (33.03)     (31.54)
---------------------------------------------------------------------
Operating loss                                    (36.91)     (31.86)
Profit on disposal - Trust investment in own
 shares                                             0.02        1.48
(Amounts written off)/profit on disposal of
 other fixed assets                                (2.45)       2.30
---------------------------------------------------------------------
Loss on ordinary activities before interest
 and tax                                          (39.34)     (28.08)
Interest receivable                                 3.11        5.58
Interest payable and similar charges               (0.01)      (0.11)
---------------------------------------------------------------------
Loss on ordinary activities before taxation       (36.24)     (22.61)
Taxation  on loss on ordinary activities           (0.34)      (0.14)
---------------------------------------------------------------------
Loss for the financial year - retained for
 equity shareholders                              (36.58)     (22.75)
---------------------------------------------------------------------
Basic and diluted loss per share                 (35.46p)    (22.15p)
---------------------------------------------------------------------

(a) Includes GBP0.90 million additional patent amortisation relating
    to a write-off of expenditure on patents no longer considered core
    to the business following a restructuring of the business in
    December 2002.

(b) Includes GBP0.27 million (2002: GBP1.69 million) relating to costs
    funded by the sale of shares in the BTG Employee Share Trust
    (Trust) and redundancy costs of GBP1.91 million incurred as a
    result of a restructuring of the business in December 2002.

All results relate to continuing activities, there were no
discontinued activities during the current and previous years.


CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended March 31, 2003

                                                                GBP
                                                              million
                                                    2003        2002
---------------------------------------------------------------------
Loss for the financial year                       (36.58)     (22.75)
Currency translation differences on foreign
 currency net investments                          (0.51)      (0.10)
---------------------------------------------------------------------
Total recognised gains and losses relating to
 the year                                         (37.09)     (22.85)
---------------------------------------------------------------------


TOTAL REVENUE
for the year ended March 31, 2003

                                                                GBP
                                                              million
                                                       2003      2002
----------------------------------------------------------------------
Royalties from launched products                      24.91     22.09
Milestones                                             1.50      1.59
Income from new agreements                             3.86      5.19
----------------------------------------------------------------------
Licence income                                        30.27     28.87
Audit revenues                                         1.26      1.98
----------------------------------------------------------------------
Turnover                                              31.53     30.85
Income from sale of investments                           -      2.30
----------------------------------------------------------------------
Total revenue                                         31.53     33.15
----------------------------------------------------------------------


BALANCE SHEETS
as at March 31, 2003

                                                                GBP
                                                               million
                                  Group     Group     Company  Company
                                  2003      2002      2003     2002
----------------------------------------------------------------------
Fixed assets
Intangible assets - patents and
 other IPR                          9.64     11.28        -         -
Tangible assets                     6.86      6.55        -         -
Investments                        15.03      7.95    17.09     17.25
----------------------------------------------------------------------
                                   31.53     25.78    17.09     17.25
----------------------------------------------------------------------
Current assets
Debtors: amounts falling due
 within one year                    6.34     11.79   160.48    159.80
Short-term deposits                54.65     90.02        -         -
Cash at bank and in hand            7.48      8.97     0.01      0.54
----------------------------------------------------------------------
                                   68.47    110.78   160.49    160.34
Creditors: amounts falling due
 within one year                  (18.45)   (18.06)   (1.22)    (0.75)
----------------------------------------------------------------------
Net current assets                 50.02     92.72   159.27    159.59
----------------------------------------------------------------------
Total assets less current
 liabilities                       81.55    118.50   176.36    176.84
Provisions for liabilities and
 charges                           (1.29)    (1.24)       -         -
----------------------------------------------------------------------
Net assets                         80.26    117.26   176.36    176.84
----------------------------------------------------------------------

Analysis of net assets
BTG (excluding Provensis)         113.19    136.64        -         -
Provensis                         (32.93)   (19.38)       -         -
----------------------------------------------------------------------
Net assets                         80.26    117.26   176.36    176.84
----------------------------------------------------------------------

Capital and reserves
Called up share capital            10.53     10.52    10.53     10.52
Share premium account             159.86    159.78   159.86    159.78
Capital reserve                     7.31      7.31        -         -
Profit and loss account           (97.44)   (60.35)    5.97      6.54
----------------------------------------------------------------------
Equity shareholders' funds         80.26    117.26   176.36    176.84
----------------------------------------------------------------------


CONSOLIDATED CASH FLOW STATEMENT
for the year ended March 31, 2003

                                                                GBP
                                                              million
                                                       2003      2002
----------------------------------------------------------------------
Net cash outflow from operating activities
BTG (excluding Provensis)                            (13.10)   (18.68)
Provensis                                            (13.23)   (12.42)
----------------------------------------------------------------------
Total cash outflow from operating activities         (26.33)   (31.09)
Return on investments and servicing of finance
Interest element of finance lease payments            (0.03)    (0.02)
Interest paid                                         (0.01)    (0.09)
Interest received                                      5.60      4.28
----------------------------------------------------------------------
Net cash inflow from returns on investments and
 servicing of finance                                  5.56      4.17
----------------------------------------------------------------------
Taxation
Overseas tax paid                                     (0.35)    (0.13)
----------------------------------------------------------------------
Tax paid                                              (0.35)    (0.13)
----------------------------------------------------------------------
Capital expenditure and financial investments
Cash received on sale of tangible assets                  -      0.06
Purchase of tangible assets                           (2.07)    (1.61)
Cash received on sale of investments                   0.03      4.08
Expenditure on investments                            (9.99)    (3.93)
Investment in patents                                 (3.42)    (2.94)
----------------------------------------------------------------------
Net cash outflow from capital expenditure and
 financial investments                               (15.45)    (4.34)
----------------------------------------------------------------------
Net cash outflow before use of liquid
resources and financing                              (36.57)   (31.39)
----------------------------------------------------------------------
Management of liquid resources
Cash retrieved from term deposits                     35.37     26.56
----------------------------------------------------------------------
Net cash inflow from management of liquid
 resources                                            35.37     26.56
----------------------------------------------------------------------
Financing
Issue of ordinary share capital                        0.09      1.10
Capital element of finance lease payments                 -     (0.05)
----------------------------------------------------------------------
Net cash inflow from financing                         0.09      1.05
----------------------------------------------------------------------
Decrease in cash in the period                        (1.11)    (3.78)
----------------------------------------------------------------------

NOTES TO THE ACCOUNTS

1.  The financial information set out above does not constitute the
    Company's statutory accounts for the year ended March 31, 2003.
    Statutory accounts for 2002 have been delivered to the Registrar
    of Companies, and those for 2003 will be delivered following the
    Company's Annual General Meeting. The auditors have reported on
    those accounts; their reports were unqualified and did not contain
    statements under s237 (2) or (3) of the Companies Act 1985.

2.  Loss per share. This is calculated on a loss of GBP36.58
    million (2002: GBP22.75 million) and a weighted average number of
    ordinary shares of 103.16 million (2002: 102.73 million). The
    weighted average number of shares excludes the shares held by the
    BTG Employee Share Trust.

The Annual Report and Accounts will be posted to all shareholders on
June 20, 2003 and copies will be available to the public from the
Company's registered office, 10 Fleet Place, Limeburner Lane, London
EC4M 7SB.