BTG Releases Preliminary Results for the Year Ending March 31, 2002.

Business Editors

LONDON--(BUSINESS WIRE)--May 30, 2002

BTG plc (LSE: BGC), the global technology commercialization company, today announced its audited preliminary results for the year to March 31, 2002.

Financial Highlights

-- 58 new technologies acquired (35 in life sciences and 23 in physical
sciences)

-- Authorized 17 new technology development projects

-- 6 new ventures approved

-- 14 new license agreements signed (7 in physical sciences and 7 in life
sciences)

-- European Phase III clinical trials for Varisolve commenced in Europe

Operational Highlights

-- 58 new technologies acquired (35 in life sciences and 23 in physical
sciences)

-- Authorized 17 new technology development projects

-- 6 new ventures approved

-- 14 new license agreements signed (7 in physical sciences and 7 in life
sciences)

-- European Phase III clinical trials for Varisolve commenced in Europe

Ian Harvey, CEO of BTG plc, commented: "BTG has in place the right people, capabilities and financial resources to take real advantage of the many opportunities in the growing technology commercialization market.

During this financial year we have developed our portfolio significantly by investing in the acquisition of 58 technologies, 17 new technology development projects and 6 new ventures. I am pleased to report that, despite tough market conditions, we have successfully signed 14 new license agreements, increasing new business revenues by 49%, and we have increased our revenues from launched products including FactorIX and Campath(R)."

A presentation for analysts took place this morning in London, and an archived replay is available later today via webcast on BTG's website at www.btgplc.com.

Chairman's Statement

The year to March 31, 2002 has seen the completion of our infrastructure expansion, continued progress of Varisolve(R), and an increase in our investment in new technologies and start-ups. All are targeted at creating the platform on which to build long-term shareholder value.

Total revenues for the year were (pound)33.2 million (2001: (pound)37.8 million), lower than last year due to the expected reduction in revenues from license compliance activities and milestone payments to (pound)3.6 million (2001: (pound)14.3 million).

Despite this, the portfolio continued to demonstrate growth in the underlying long-term revenues from royalties on launched products, which increased by 16% to (pound)22.1 million (2001: (pound)19.0 million). Factor IX (a treatment for haemophilia B) generated (pound)10.8 million (2001: (pound)9.9 million) and Campath(R) (a treatment for chronic lymphocytic leukemia) generated significant first year royalties of (pound)2.7 million. Revenues from new license agreements increased by 49% to (pound)5.2 million (2001: (pound)3.5 million). Total revenues include (pound)2.3 million resulting from the partial sale of our equity holding in Acambis plc, originally received as consideration for a license.

Revenue sharing with our technology sources amounted to (pound)13.3 million (2001: (pound)15.4 million). Administration expenses grew as expected to (pound)29.9 million (2001: (pound)23.5 million) and are planned to stabilize at this level. Our investment in Provensis Ltd increased to (pound)12.6 million (2001: (pound)5.5 million), reflecting the progress through clinical development of Varisolve(R), the non-invasive procedure being developed to treat varicose veins. The vast majority of our expenses is incurred in acquiring, developing and commercializing technologies to create future value. Much of this investment is expensed as incurred, contributing to the expected increased loss before tax of (pound)22.6 million (2001: (pound)7.0 million).

We committed(pound)8.5 million to funds and new ventures (2001:(pound)4.8 million) and authorized seventeen development projects with a combined commitment of(pound)1.5 million (2001:(pound)1.3 million). We finished the year with a healthy net cash balance of(pound)97.5 million (2001: (pound)127.8 million).

As previously stated, your Board has concluded that it should not recommend the payment of a dividend while the company continues in its current investment mode.

As we said in our half-year report, the global slowdown has not significantly affected the life sciences side of our business, but in the physical sciences sectors customers are sometimes unable or unwilling to make large down payments when taking licenses. Consequently, whenever possible, we seek to structure license agreements such that the long-term value of the technologies is maintained when down payments are smaller. Despite somewhat adverse market conditions, we succeeded in signing fourteen new agreements, two more than last year, with seven from each division.

Our achievements this year would not have been possible without the dedication and integrity of my Board colleagues and our employees, to whom I would particularly like to express my sincere gratitude. I am confident that their ongoing commitment and energy will continue to deliver outstanding value creation for our shareholders.

Dr. Jack Leonard

Chairman

Chief Executive's Review

Intellectual property asset management continues to gain prominence within universities and boardrooms around the world. In both the life and physical sciences sectors, many organizations find that they lack the complete set of skills or resources - which BTG has - necessary to value and successfully commercialize these assets. This is presenting tremendous opportunities for BTG, and we are seeing a steady increase in the number of high potential technologies available to us for development and commercialization.

Whether we are asked to license a particular technology in one geographical region, or to review an entire portfolio and recommend and implement strategic technology investment, development and commercialization plans, we are recognized as a valued partner with a deep understanding of technologies, IP and markets, and a long and successful track record.

Progress Following Rights Issue

Eighteen months into a four to five year investment plan following our Rights Issue in October 2000, we are making excellent progress in delivering on our business plan.

This year we completed the expansion of our team and infrastructure and fine-tuned our business processes, increasing access to academic and corporate sources and continuing to strengthen the flow of technologies into our portfolio. In total, we acquired fifty-eight new technologies. A key strength of BTG is our ability to add value to technologies through strategic development activities. These, for a modest investment, generate new data or proof of concept that can significantly increase the commercial attractiveness of the technology to potential licensees or partners. An example is our funding of a Phase I clinical trial of AQ4N, a drug being developed to improve the efficiency of cancer treatments, which enabled us to secure a license agreement with favorable terms.

We also stepped up our venture activities, our strategy being to help create start-ups to nurture technologies with a high potential value and then retain a greater share of the rewards when they reach the commercialization stage. Sometimes we launch companies ourselves, as with KetoCytonyx, Inc., which plans to develop treatments for neurodegenerative conditions. On other occasions we invest in existing early stage companies or partner funds, in most cases providing strategic IP management, technical and commercial advice, as with Primaxis, our seed capital joint venture technology fund with the Royal Bank of Canada.

Through these development and venture activities, I believe we have significantly increased the long-term value of our technology portfolio over the year.

BTG is a long-term business. On average, it takes three to five years to commercialize a new technology, whether through licensing or venture creation. At that point, we usually begin to realize value, through a down payment on a license agreement. Sometimes we sell the technology outright or agree to a fully paid-up license, as with three of the four licenses signed this year for the Electro-absorption Modulator technology from BT, which generated several million pounds. In many cases, we expect to receive future revenues from milestone payments as our licensee progresses the technology towards market, and from long-term recurring royalties on product sales when it reaches the market. This is particularly true for life sciences technologies. Physical sciences technology licenses tend to provide larger down payments and have shorter lifecycles with shorter royalty paying periods. With ventures, we usually seek to realize the value of our equity holdings over a three to five year period following creation of the venture.

We are already delivering value from technologies acquired in recent years. This year we signed fourteen new license agreements, seven in each division, generating (pound)5.2 million. Importantly, our underlying long-term revenues from launched products grew a healthy 16% to (pound)22.1 million, including (pound)2.7 million first year revenues from Campath(R). We also sold part of an equity stake in Acambis plc, acquired in consideration for a license agreement, realizing a profit of (pound)2.3 million. Through our development and commercialization activities, we aim to create layer upon layer of similar annually recurring revenue streams in the future.

Varisolve(R)

Our subsidiary Provensis Limited made significant progress this year, taking Varisolve(R) into Phase III clinical trials in Europe. We expect the efficacy data from these trials to demonstrate the true potential for Varisolve(R) to address the very large latent market that exists for a convenient, pain-free treatment for varicose veins. Provensis had expected to commence clinical trials in the US earlier this year, but awaits approval from the US Food & Drug Administration (FDA). Provensis continues to make progress in discussions with the FDA, and we will make a further announcement in due course.

Provensis expects in the near future to secure an agreement for the manufacturing of the finished bi-can device that will deliver the microfoam. This is essential because the regulatory bodies require long-term stability testing of the finished product before approval.

Using efficacy data from the European Phase III trials, Provensis will begin discussions with potential sales and marketing partners that have already been identified, and we expect to announce the commercialization strategy for Varisolve(R) during the first half of 2003.

We will continue to keep shareholders informed as to Varisolve(R)'s progress.

Business Environment

The general malaise affecting corporations within the high tech sectors has not significantly affected the life sciences side of our business, but it has had an impact on the physical sciences side - both positive and negative. The environment for acquiring technologies in both sectors is very good, and BTG's expertise, track record and partnership approach are attractive to inventive sources. We are able to acquire potentially valuable technologies inexpensively and to participate in venture activities at competitive valuations. An example of the latter is our second-round investment of US$2 million in Meriton Networks, which was made on first-round terms.

Completing license agreements in the physical sciences areas is more complex and is taking longer than before. Licensees are unwilling to make large down payments, but we aim to offset reduced down payments with improved royalty arrangements. It is important to continue to license technologies to our customers, so that when the economic environment improves they will have the next generation of products ready to fulfill market needs.

We believe that the downturn in these businesses is cyclical, and we are confident that the healthy flow of technologies moving through the acquisition, development and commercialization stages positions us well. Our overall business strategy therefore remains as outlined at the Rights Issue.

Outlook

In the year ahead we will continue to implement our business plan. We aim, through Provensis, to continue to progress Varisolve(R) through the clinical development and regulatory approvals process in Europe and the US, to secure a secondary manufacturing agreement and to begin commercial discussions with potential sales and marketing partners. While Varisolve(R) is a very important component of the value we are creating, we must not lose sight of the tremendous potential within the rest of our portfolio. We therefore plan to continue to acquire new, high-potential technologies, to expand our strategic development activities in the life sciences area and to focus on delivering value from those high-potential physical sciences technologies we are bringing into the portfolio. We will also continue to expand our venture creation activities.

The technology commercialization market is growing, and we have the skills, networks, resources and track record to maintain worldwide leadership in our chosen technology focus areas. In doing this, we believe we are creating significant value for shareholders.

Ian Harvey

Chief Executive

About BTG

BTG's business is finding, developing and commercialising technologies that will shape the markets of tomorrow. Our technologies begin with innovation in a particular scientific or technical discipline. Those technologies will be protected by a strong portfolio of intellectual property. BTG creates value by investing in further technical development and enhancing the scope of the intellectual property. Finally, BTG captures value by either licensing the rights to the technology or by developing new business ventures. We return significant value to our sources of technology, our business partners and our shareholders.

With headquarters in London and offices in Philadelphia and Tokyo, BTG capitalises on a global network of contacts in companies, universities and research institutions to identify and commercialise the most promising technologies. Since being founded in 1949, BTG has commercialised such major innovations as magnetic resonance imaging (MRI), Interferon, wide-spectrum cephalosporin antibiotics and Campath(R).

BTG is quoted on the London Stock Exchange under the symbol "BGC". BTG's website, www.btgplc.com, includes information about our business and recent press releases. In the US and UK, BTG operates through wholly owned subsidiaries, BTG International Inc. and BTG International Ltd., respectively.

(For tabular information please contact Taylor Rafferty on [phone])

*Note: Dollar conversions are provided at the March 29, 2002 rate of(pound)1 = $1.4259 for reader convenience only