British Biotech plc -- ``British Biotech'' -- Interim Results for the Six Months Ended October 31, 2001.

Business Editors

OXFORD, England--(BUSINESS WIRE)--Nov. 23, 2001

British Biotech (LSE:BBG)(Nasdaq:BBIOY) today announced its interim results for the six months ended October 31, 2001. Highlights of the period include:

-- Patient studies initiated with three products

-- Phase I for BB-10901 in small cell lung cancer

-- Phase II for E21R in acute myeloid leukemia

-- Registry study for the Batimastat BiodivYsio(R) stent in restenosis

-- Manufacturing under way for a phase II study of the novel thrombolytic,
BB-10153

-- Restructuring completed, non-core assets sold

-- Loss for the half year of (pound)8.4 million (US$12.2 million) (2000:
(pound)12.2 million)

-- Substantially reduced cash burn for the half year of (pound)2.8 million
(US$4.1 million) (2000: (pound)14.0 million)

-- Cash balance at October 31, 2001 of (pound)62.2 million (US$90.2 million)

Dr Elliot Goldstein, Chief Executive Officer of British Biotech, said: "The turnaround at British Biotech continues to make good progress. We have had a productive half-year in which three products started clinical studies and a major restructuring of the business was completed. Over the next 12 months we look forward to generating the critical proof of principle data from our existing products and substantially expanding the Product Portfolio."

For more information please contact

British Biotech plc Tony Weir, Finance Director Tel: [phone] Fax: [phone] www.britishbiotech.com

G.A. Kraut Company Gerard Coffey, Vice President Tel: [phone] Fax: [phone] www.gakraut.com

Safe harbor statement: this news release contains forward-looking statements that reflect the Company's current expectation regarding future events. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of the Company's research strategy, the applicability of the discoveries made therein, the successful and timely completion of clinical studies and the uncertainties related to the regulatory process.

November 23, 2001 NASDAQ: BBIOY

British Biotech plc ("British Biotech")

Interim Results for the six months ended October 31, 2001

Business Review

In the half-year to October 31, 2001 British Biotech, in collaboration with its partners, has continued to develop its Product Portfolio. During the period, patient studies were started with three products.

In August, management implemented a major restructuring to intensify the focus on drug development, add to cash resources and significantly reduce fixed infrastructure costs through the transfer of part of British Biotech's pre-clinical research operations to OSI Pharmaceuticals, Inc (OSI). Together with the sale and leaseback of offices and laboratories in April 2001, this transaction completed the sale of non-core assets, in total raising (pound)20 million (US$29.0 million) in calendar year 2001. Following the restructuring British Biotech has 86 full-time employees.

Product Portfolio

BB-10901 (Collaboration with ImmunoGen, Inc, USA)

Patient recruitment in the phase I/II dose-ranging study in small cell lung cancer commenced in June 2001 at two centers in Texas and is progressing well. Testing has been completed at dose levels of 5, 10 and 20 mg/m2 without dose-limiting toxicity; treatment at the fourth dose level of 40mg/ m2 is now under way.

Next milestone: escalate to maximum tolerated dose; start phase II segment of study - Q2 2002

E21R (Collaboration with BresaGen Ltd, Australia)

A phase II study of E21R in patients with acute myeloid leukemia was initiated in August 2001. Five patients have now received E21R and recruitment of suitable patients is continuing at four UK hospitals. Further sites in Europe are being evaluated for expansion of this trial. In addition, BresaGen is continuing to recruit patients for a phase II study of E21R in chronic myelomonocytic leukemia.

Next milestone: phase II results - Q4 2002

Batimastat BiodivYsio(R)stent (Collaboration with Biocompatibles International plc, UK)

The first patient trial of the batimastat-coated BiodivYsio(R) vascular stent started in August 2001. The purpose of this multi-center European study is to determine the safety and efficacy of the stent and full recruitment of 150 patients into the study was completed in November. A European pivotal study is scheduled to start in December 2001, with a second pivotal study planned to start in the USA in the first half of 2002.

Next milestones: start EU pivotal study - Q4 2001; start US pivotal study - Q2 2002

BB-10153

Manufacture of BB-10153 for a phase II proof of principle study is progressing to plan at DSM Biologics in Canada. The first of four batches of the product has been prepared and is undergoing release testing. Meetings with external experts and regulators have been held to review the clinical development plan for this novel thrombolytic. An Investigational New Drug (IND) application is planned for early 2002.

Next milestone: file IND, start phase II - Q1 2002

Research

British Biotech's research concentrates on new approaches to serious inflammatory disease and the discovery of new classes of antibiotics. Research into inflammatory disease, conducted in collaboration with Serono SA, Europe's largest biotechnology company, is progressing well.

British Biotech's in-house research into new classes of drugs that will overcome the serious problem of antibiotic resistance has also made good progress. In pre-clinical studies the Antibiotic Program's lead compounds, peptide deformylase (PDF) inhibitors, have shown high potency against gram positive bacteria, in particular drug-resistant strains of Streptococcus pneumoniae. The Company aims to initiate clinical studies with the program's lead compound in 2002 and talks are in progress with other companies to form an R&D collaboration for this program.

Next milestones: secure collaboration; start phase I study with lead antibiotic - 2002

Financial Review

Profit and loss account

The loss for the six months ended October 31, 2001 decreased to (pound)8.4 million (US$12.2 million) (2000: (pound)12.2 million). Turnover in the half year was (pound)0.7 million (US$1.0 million) (2000: (pound)0.1 million) and resulted from recognition of a proportion of the US$5 million received from Serono in November 2000. Research and development expenditure was lower at (pound)10.8 million (US$15.7 million) (2000: (pound)12.2 million) due to lower levels of infrastructure resulting from cost-reduction initiatives. Administrative expenditure increased to (pound)2.3 million (US$3.3 million) (2000: (pound)1.9 million) due to reorganization costs. Profit on disposal of fixed assets was (pound)1.9 million (US$2.8 million) (2000: (pound)nil) and arose on the transfer of certain pre-clinical operations to OSI. Research and development tax credits of (pound)0.7 million (US$1.0 million) (2000: (pound)nil) were recognized as the Company believes it will satisfy the requirements of the Finance Act 2000 in the year ending April 30, 2002.

Cash flow

Cash and short-term deposits at October 31, 2001 were (pound)62.2 million (US$90.2 million), compared with (pound)65.0 million at April 30, 2001 and (pound)61.7 million (US$89.5 million) at October 31, 2000. The net cash outflow in the half-year of (pound)2.8 million (US$4.1 million) benefited from the receipt of (pound)8.2 million (US$11.9 million) from OSI. Excluding this receipt, the cash outflow in the half-year was reduced to (pound)11.0 million (US$16.0 million) (2000: (pound)14.0 million). The reduction was due to the lower loss for the period and the payment last year of $1.5 million to ImmunoGen to acquire the rights to BB-10901.

Outlook

British Biotech's key objectives for 2002 are:

-- progress the Product Portfolio to generate key proof of

principle data;

-- acquire commercialization rights to at least one new drug in

clinical development;

-- form a research and development collaboration for the

Antibiotic program; and

-- start clinical trials of lead antibiotic.

The Board is also evaluating other opportunities to expand significantly the Product Portfolio. British Biotech is particularly well placed in this respect, due to the Company's expertise in drug development, proven track record in collaborating to acquire new drug opportunities, strong cash position and strategically advantageous position in Europe. British Biotech will actively pursue alliances and corporate transactions to achieve this objective.

            Unaudited consolidated profit and loss account
               For the half year ended October 31, 2001

                          Half year     Half year     Full year
                          ended         ended         ended
                          October 31,   October 31,   April 30,
                          2001          2000          2001
                          (pound)000    (pound)000    (pound)000

Turnover                        722            50         1,588

Research and development
 expenditure               (10,810)      (12,183)      (23,724)

Administrative expenses     (2,307)       (1,947)       (3,997)
                          ---------      --------      --------

Operating loss             (12,395)      (14,080)      (26,133)
Profit on disposal of
 fixed assets (note 2)       1,945             -             -
                          ---------      --------      --------

Loss on ordinary
 activities before
 interest                  (10,450)      (14,080)      (26,133)
Interest receivable           1,589         2,060         3,778
Interest payable              (147)         (193)         (329)
Amount written off
 investment                      -             -         (799)
                          ---------      --------      --------

Loss on ordinary
 activities before
 taxation                   (9,008)      (12,213)      (23,438)

Taxation (note 3)               653             -           130
                          ---------      --------      --------

Loss for the period         (8,355)      (12,213)      (23,353)
                          ---------      --------      --------

Loss per share (basic and
 diluted) (note 4)           (1.3)p        (1.8)p        (3.5)p
                          ---------      --------      --------


       Unaudited statement of total recognized gains and losses
               For the half year ended October 31, 2001

                          Half year     Half year     Full year
                          ended         ended         ended
                          October 31,   October 31,   April 30,
                          2001          2000          2001
                          (pound)000    (pound)000    (pound)000

Consolidated
 loss for the
 period                     (8,355)      (12,213)      (23,353)
Translation of
 overseas subsidiary
 financial statements            -              3            25
                          ---------      --------      --------
Total losses
 recognized for
 the period                 (8,355)      (12,210)      (23,328)
                          ---------      --------      --------



                 Unaudited consolidated balance sheet

                          At            At            At
                          October 31,   October 31,   April 30,
                          2001          2000          2001
                          (pound)000    (pound)000    (pound)000

Fixed assets
Intangible assets
 (note 6)                   1,186         1,236         1,090
Tangible assets             7,301        25,930        13,053
Investments                   824           974           824
                      ------------ ------------- -------------
                            9,311        28,140        14,967
Current assets
Debtors                     2,493         5,963         5,234
Cash and short term
 bank deposits             62,205        61,724        65,011
                      ------------ ------------- -------------
                           64,698        67,687        70,245
Current liabilities
Creditors: amounts
 falling due within
 one year                 (8,284)      (10,216)      (10,544)
                      ------------ ------------- -------------

Net current assets         56,414        57,471        59,701

Total assets less
 current liabilities       65,725        85,611        74,668
Creditors: amounts
 falling due after
 more than one year       (1,913)       (2,330)       (2,442)
Provision for
 liabilities and
 charges                    (200)         (300)         (350)
                      ------------ ------------- -------------

Net assets                 63,612        82,981        71,876
                      ------------ ------------- -------------
Capital and reserves
Share capital              33,353        33,313        33,326
Share premium account     298,615       298,613       298,615
Other reserve              10,008        10,008        10,008
Profit and loss
 account                (278,364)     (258,953)     (270,073)
                      ------------ ------------- -------------

Total equity
 shareholders' funds       63,612        82,981        71,876
                      ------------ ------------- -------------


              Unaudited consolidated cash flow statement
               For the half year ended October 31, 2001

                          Half year     Half year     Full year
                          ended         ended         ended
                          October 31,   October 31,   April 30,
                          2001          2000          2001
                          (pound)000    (pound)000    (pound)000

Net cash outflow from
 operating activities      (10,141)      (13,692)      (21,738)
Return on investments
 and servicing of
 finance                      1,279         1,915         3,656
Taxation - overseas               -             -           130
Capital expenditure
 (note 7)                     6,270       (2,048)         7,587
                          --------------------------------------

Cash utilised by
 operations                  (2,592)      (13,825)      (10,365)
Management of liquid
 resources                    2,473        14,270        11,254
Financing                     (173)         (198)         (381)
                          --------------------------------------

(Decrease)/increase
 in cash in the period        (292)           247           508
                          --------------------------------------
Reconciliation of net
 cash flow to movement
 in net funds
(Decrease)/increase in
 cash in the period           (292)           247           508
Cash used to decrease
 debt and lease
 financing                      201           206           402
Net movement in
 liquid resources           (2,473)      (14,270)      (11,254)
Exchange adjustment            (20)            44            62
                          --------------------------------------

Movement in net
 funds in the period        (2,584)      (13,773)      (10,282)
Net funds at start
 of the period               62,458        72,740        72,740
                          --------------------------------------

Net funds at end of
 the period (note 8)         59,874        58,967        62,458
                          --------------------------------------

Notes

1. The interim financial information on the Group set out above has

been prepared on the basis of the accounting policies set out in

the Group's statutory accounts for the year ended April 30, 2001.

The Group has also adopted all recently published accounting

standards: FRS17 Retirement Benefits; FRS18 Accounting Policies;

and FRS19 Deferred Tax, and none of these standards had any impact

on adoption. This interim financial information does not

constitute statutory accounts within the meaning of Section 240 of

the Companies Act 1985 but has been reviewed by the auditors in

accordance with bulletin 1999/4 issued by the Auditing Practices

Board; their report to the Company is set out on page 9. The

Group's statutory accounts for the year ended April 30, 2001 have

been delivered to the Registrar of Companies; the report of the

auditors on these accounts was unqualified and did not contain a

statement under Section 237 (2) or (3) of the Act.

2. The profit on disposal of fixed assets arises from the agreement

signed with OSI whereby 59 British Biotech employees have

transferred to OSI along with the leases on two properties and

certain fixed assets. A further (pound)0.5m (US$0.7 million) of

consideration is receivable subject to certain conditions and

recognition of this is deferred until March 2002.

3. Following the introduction of Research and Development Tax Credits

as part of the Finance Act 2000, the Group has recognized the R&D

tax credit in respect of the first half of the year.

4. Loss per share is based on the loss attributable to shareholders

of (pound)8.4 million (US$12.2 million) (2000: (pound)12.2

million) and on 667 million shares (2000: 666 million), being the

weighted average number of shares in issue for the half year.

5. The directors do not propose a dividend for the period.

6. Collaborative milestone payments for the six months ended October

31, 2000 have been reclassified as intangible assets in that

period to reflect the group accounting policy applied for the year

ended April 30, 2001.

7. Capital expenditure consists of profits on the sale of fixed

assets of (pound)6.8 million (US$9.9 million) (2000: nil) less

purchase of fixed assets of (pound)0.6 million (US$0.9 million)

(2000: (pound)2.0 million).

8. Net funds consist of cash at bank and short-term deposits of

(pound)62.2 million (US$90.2 million) (2000: (pound)61.7 million)

less (pound)2.3 million (US$3.3 million) of secured loans (2000:

(pound)2.7 million).

9. A copy of the interim results for the six months ended October 31,

2001 will be sent to shareholders before the end of December 2001.

Further copies of the interim results are available from the

Company's registered office at: British Biotech plc, Watlington

Road, Oxford OX4 6LY.

10. Where they appear, U.S. dollar amounts were translated at the rate

(pound)1=US$1.45

Independent Review Report to British Biotech plc

Introduction

We have been instructed by the company to review the financial information which comprises the consolidated profit and loss account, consolidated statement of total recognized gains and losses, consolidated balance sheet, consolidated cash flow statement, and the related notes 1 to 9. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended October 31, 2001.

PricewaterhouseCoopers, Chartered Accountants London November 23, 2001