Interim Results. For the six months ended 30 September 2017

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1 Interim Results For the six months ended 30 September 2017

2 Forward-looking statements This presentation and information communicated verbally to you may contain certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of BTG plc ( BTG ). These statements are based on current expectations and involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Any of the assumptions underlying these forwardlooking statements could prove inaccurate or incorrect and therefore any results contemplated in the forward-looking statements may not actually be achieved. Investors or other recipients are cautioned not to place undue reliance on any forward-looking statements contained herein. BTG undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statement, whether as a result of new information, future events or other circumstances. Neither this presentation nor any verbal communication shall constitute an invitation or inducement to any person to subscribe for or otherwise acquire securities in BTG BTG International Ltd. All rights reserved. Imagine where we can go, BTG and the BTG roundel logo are trademarks of BTG International Ltd. DC Bead, DC Bead LUMI, IO Loop and Simplicit90Y are trademarks and/or registered trademarks of Biocompatibles UK Ltd. EKOS is a trademark of EKOS Corporation. Galil is a trademark of Galil Medical Ltd. PneumRx is a trademark of PneumRx, Inc. TheraSphere is a trademark of Theragenics Corporation used under license by Biocompatibles UK Ltd. Varithena is a trademark of Provensis Ltd. CroFab and DigiFab are trademarks of BTG International Inc. Vistogard is a trademark of Wellstat Therapeutics Corporation. Voraxaze is a trademark of Protherics Medicines Development Ltd. SnakeBite911 is a trademark of Protherics UK Ltd. CenterCross is a trademark of Roxwood Medical Inc. Lemtrada is a trademark of Genzyme Corporation. Zytiga is a trademark of Johnson & Johnson. Biocompatibles UK Ltd, EKOS Corporation, Galil Medical Ltd, PneumRx, Inc., Protherics Medicines Development Ltd, Protherics UK Ltd, Provensis Ltd and Roxwood Medical Inc. are all BTG International group companies. 2 Not all products and/or indications are available in all territories. For prescribing information, safety information, and/or product information, go to: btg-im.com crofab.com digifab.us ekoscorp.com galilmedical.com lemtrada.com pneumrx.com therasphere.com varithena.com vistogard.com voraxaze.com

3 Investing to deliver sustained growth Excellent strategic position Scalable platform delivering growth Leading-edge therapies in attractive markets Exciting opportunities in Interventional Medicine Multiple drivers of growth: existing product portfolio and pipeline Significant milestones achieved in H1 17/18 Well placed to achieve additional growth Financial strength, therapy knowledge and capabilities to make the right investments Strong financial performance Double-digit product sales growth Increasing free cash flow available for reinvestment 3

4 Simplifying the message Interventional Oncology and Interventional Vascular reporting simplified; single revenue number reported for each business Varithena not included within Interventional Vascular separate customer group Specialty Pharmaceuticals renamed Pharmaceuticals Reporting in $ from 2018/19 4

5 H1 2017/18 performance review Rolf Soderstrom 5

6 Double-digit product sales and adjusted operating profit growth H1 17/18 ( m) H1 16/17 ( m) Growth Growth at CER 1 Product Sales % +17% Licensing % +4% Revenues % +13% Adjusted Operating Profit % +15% Adjusted Operating Profit Margin 29% 28% +1ppts Adjusted Basic EPS p 13.9p +51% Free Cash Flow % 6 1 Constant exchange rate ( CER ) growth is computed by restating 2017/18 results using 2016/17 foreign exchange rates for the relevant period. 2 Further detail on the adjustments to IFRS financial measures is included in the interim results announcement. 6

7 Adjusted to IFRS earnings H1 17/18 +72% Growth >100% Growth Adjusted EPS 21.0p (8.5) (0.9) 6.9 (1.0) (3.7) - IFRS EPS 13.8p 7 7

8 Strong product sales growth driven by IO, IV and Pharmaceuticals H1 17/18 ( m) Growth at CER Drivers of H1 17/18 performance High Growth Interventional Oncology (IO) % Strong TheraSphere performance and expansion of GALIL cryotherapy Interventional Vascular (IV) % Continued US penetration of EKOS products Early Stage PneumRx Coils 4.0 (23%) Fewer procedures in Germany Varithena % Continued progress ahead of finalised CPT codes Total IM % Pharmaceuticals % High bite season for CroFab, with good DigiFab growth and increased oncology sales Product Sales % 8 8

9 Licensing royalties benefit from good Zytiga performance and Lemtrada back-royalties Continued good contribution from Zytiga No generic entrant expected before October 2018 Strong Lemtrada royalties in last full year before expiration: EU royalties ceased in March 2017 US royalties cease in September 2017 H1 17/18 ( m) H1 16/17 ( m) Growth Growth at CER Zytiga % +3% Lemtrada % +17% Other royalties (4%) (10%) Licensing % +4% Lemtrada royalties ceased in H1 17/18 due to licence expiration, with final back-royalties of 11m included in the half Continued good contribution from Zytiga, with a strong last quarter No generic entrant expected in the US before October 2018 No generic entrant expected in Europe before September

10 Revenue mix reflected in H1 margins All Investment m in IM commercial Interventional capabilities ahead of anticipated growth Medicine Pharmaceuticals Licensing Total Spec Pharma continues to provide strong financial underpin Revenues Contribution from Licensing to gradually decline as royalties drop off Adjusted gross profit Gross margin 71% 88% 46% 69% Adjusted SG&A Contribution Contribution margin 17% 74% 33% 42% R&D 46.1 Adjusted operating profit 1, Operating margin 29% 10 1 Further detail on the adjustments to IFRS financial measures is included in the interim results announcement. 2 Includes 1.2m from FX and other operating income. 10

11 Robust free cash flow and funding position H1 17/18 ( m) H1 16/17 ( m) Growth Free Cash Flow % Acquisition of Galil Medical - (36.4) Other investing and financing 1 (4.2) (15.7) Net Cash Flow Cash and cash equivalents of 226.5m at 30 September 2017 $65m acquisition cost for Roxwood paid in October Strong and flexible funding position, with new facility of up to 300m currently undrawn 11 1 Increases the effect of exchange rate fluctuation on cash held.

12 . 2017/18 outlook 2017/18 CER guidance 1 Comment Interventional Medicine mid-to-high teens (%) growth No change - H2 weighted Pharmaceuticals low-to-mid single-digit (%) growth No change - H1 weighted Licensing single-digit (%) decline Increased Zytiga and Lemtrada back-royalties Gross margin within range 69% 71% Higher Licensing revenues /mix Adjusted SG&A 2 and R&D mid-to-high single-digit (%) increase No change Adjusted effective tax rate 2 increasing to 22% 26% No change A further 5% change in USD/GBP rates (from the September rate of ~$1.34) 3 would result in an incremental hedging gain/loss of 4m on current forward contracts in 2017/ The average USD/GBP rate for the period to 31 March 2017 was $ Adjusted SG&A and adjusted effective tax rate is not prepared in accordance with IFRS. Further detail on the adjustments to IFRS financial measures is included in the interim results announcement. 3 At 30 September 2017, BTG had forward contracts to sell $115m at a weighted average rate of $1.33

13 Change to reporting in USD A USD reporting currency aligns BTG s financial reporting with the currency in which the majority of our revenues and costs are denominated BTG will report in USD from 1 April 2018, starting with its 2018/19 financial year BTG will continue to report in GBP for the remainder of this financial year, including its full year results for the year ended 31 March 2018 Historical USD primary statements and key financial information will be published ahead of the transition 13

14 Delivering on our growth strategy Louise Makin 14

15 Annual sales Building on our portfolio of leading-edge therapies Establishing new therapies Sustainable businesses Cash generation Interventional Medicine Varithena Injectable microfoam clinically proven to reduce the symptoms and improve the appearance of varicose veins PneumRx Coils Shape-memory metal coils clinically proven to improve quality of life, lung function and exercise capacity of patients with severe emphysema Interventional Vascular Ultrasonic catheter drug delivery device used in the treatment of severe blood clots Anchoring catheters and microcatheters offering options for physicians in the crossing of complex lesions and arterial blockages Interventional Oncology Embolic, drugeluting beads and radioactive microspheres to treat tumours in the liver Cryoablation needles to treat tumours in the kidney Pharmaceuticals Acute care antidote products offering medication for patients with little or no other treatment options Licensing Royalties relating to products subject to BTG intellectual property and licence agreements Early Stage High Growth Established 15 Schematic. Not to scale.

16 Investing to deliver sustained growth and shareholder value Double-digit product sales growth Strong $ free cash flow generation Innovation & development Investments across multiple drivers of growth Commercial M&A 16

17 A company built for continued success 1600 Avg. number of employees Source: BTG Annual Reports 2 Current employee number

18 Multiple investment opportunities in Interventional Medicine therapies Themes Technology platforms BTG Interventional Medicine Existing and potential therapy area targets 18

19 Early Stage High Growth Differentiated therapies in underpenetrated markets Therapy Indications Annual patients * Current number of procedures p.a. * Liver and kidney tumours c. 325,000 c. 25,000 with BTG products Severe blood clots c. 2-3m c. 150,000 Severe emphysema > 4m c. 900 with PneumRx Coils Symptomatic varicose veins c. 2.5m c. 700k below the knee c. 800k GSV 19 *Company estimates US only

20 Interventional Medicine Strategy John Sylvester Chief Commercial Officer 20

21 Building our business on customer understanding Interventional Radiologists: Apply technology to give better patient outcomes Are hungry for more procedures Need data to drive adoption of our offering PRODUCTS PROCEDURES PATIENTS 21

22 Avg. price Building Interventional Oncology Leading-edge products appeal to the desire to apply technology for the benefit of patients $3,000 BTG s entry here $1,500 $0 Gelfoam PVA particles Spherical PVA Beads sub-100 micron Beads x-ray visible sub-100 micron Beads There s a willingness for the IR and hospital systems to adopt, and pay for, innovative products 22

23 Building Interventional Oncology New to the world procedures provide a brand new income stream Patient pre-surgical segmentectomy with conventional open procedure Patient pre-radiation segmentectomy using TheraSphere vs. The ability of TheraSphere to ablate an entire segment of the liver has provided the minimally invasive alternative to an open surgical procedure 23

24 Building Interventional Oncology New to the world procedures provide a brand new income stream vs. 24

25 Building Interventional Oncology Generating data drives more patients 450 Number of BTG published papers on Beads Providing the IRs with high-level clinical data gives them a greater voice in the debate over patient treatment options 25

26 Interventional Vascular Following the IO strategy Innovative, unique product backed by clinical data Pulmonary Embolism clearance driving increased procedures Ongoing product innovation, data generation and geographic expansion to drive long-term, sustained growth 26

27 Interventional Vascular Investing in data to drive more PATIENTS OPTALYSE PE Same efficacy but over a shorter treatment time, using less harmful lytic OPTALYSE PE RESULTS All treatment groups reduced RV/LV ratio with efficacy similar to the current 12/24 hour regimen. 5 Duration (hr) #Pts Total r-tpa Dose (one/two catheters) Reduction in RV/LV No. of Bleeds mg/8mg 24% mg/8mg 23% mg/12mg 26% mg/24mg 26% 2 ULTIMA Study 15 hrs 30 20mg + Heparin 23%* 0 SEATTLE II Study 12/24 hrs mg 25% 15 *Based on the difference between the baseline and the follow-up mean values. 27

28 Roxwood Medical acquisition Transitioning from one product to an Interventional Vascular business Roxwood s products complement our existing EKOS business Sold through our EKOS national sales force Provides our customers with options to cross blockages and enable treatment of patients with complex lesions 28

29 Roxwood Medical acquisition Occlusion crossing options $1,200 Primary strategy Wire Escalation $100-$200 / wire Bridging the gap between two existing treatment options for occlusion crossing, enabling our customers to do more procedures Existing secondary strategy CTO Crossing Device $2,000-$3,000 / device + capital costs to power each device 29

30 Operational update Louise Makin 30

31 Interventional Oncology Differentiated technologies delivering leadership in minimally invasive cancer therapies Unique multi-modality customer offering Multiple growth drivers Innovation: Interventional Oncology/Immuno-oncology (IO 2 ) Ablation platform delivering multiple new products over the next months Geographic expansion: Asia, EMEA and Latin America New indications: continuing to invest in clinical data Leadership, expertise and scale in IO enables us to continue to drive long-term, sustained growth 31

32 Interventional Oncology Multiple investments support sustained growth TheraSphere Phase III trials Cryoablation lung and bone metastases studies SIO collaboration 40x Investigator Initiated Studies Advanced dosimetry software for 90 Y (Simplicit90Y ) and TARGET study IO Loop pilot study Pipeline of new ablation products (Advanced HCC PMA) (mcrc 2nd Line PMA) 32

33 PneumRx Coils Solid progress in an emerging therapy Recent progress Growth drivers US PMA review progressing Targeting 2018 approval and launch EU medical education programme Initiating ELEVATE study Prospective study to confirm patient responder profile Potential US approval and launch EU reimbursement progress Adoption of patient selection criteria Quantitative CT service roll-out to support patient selection ELEVATE study outcome to support therapy adoption and reimbursement 33

34 Varithena Dedicated reimbursement codes from January 2018 Payment Levels % of US procedures by segment Varithena : Microfoam Ablation $1,660.66* Sclerotherapy: PCF $ Stab phlebectomy $730.97* Mechanical Ablation $1, Radiofrequency Ablation $1, Laser Ablation $1, Glue $2, Below The Knee / Tributaries 47% approx. 700k PCF, Stab phlebectomy GSV / Truncal 53% approx. 800k Ablation, Glue Commercial impact of new codes is expected to be clearer by the end of * Average of single and multiple vein payment

35 Pharmaceuticals Life-saving therapies delivering sustained cash flows Acute Care SnakeBite911 app continues to drive greater physician and patient interactions with >7,500 downloads Copperhead study published in the Annals of Emergency Medicine Oncology Voraxaze included in the 2017 Expert Consensus Guidelines contained within the Annals of Emergency Medicine 35

36 Multiple investment opportunities in Interventional Medicine therapies Smart access Local delivery Enhanced safety Value for money Precision medicine Patient friendly Themes Technology platforms Radiation Embolisation Ablation Coil and foam technology Enhanced drug delivery BTG Interventional Medicine Liver Kidney Lung Bone Neuro Vascular Prostate Pain Existing and potential therapy area targets 36

37 Creating shareholder value through sustained growth Excellent strategic position Scalable platform delivering growth Well placed to achieve additional growth through investment in organic development and M&A Strong financial performance 37

38 38 Questions

39 39 Appendix

40 Pharmaceuticals performance continues to provide strong financial underpin H1 17/18 ( m) H1 16/17 ( m) Growth Growth at CER CroFab % +21% DigiFab % +18% Voraxaze % +23% Vistogard % +14% Pharmaceuticals % +20% 40 40