BTG boss scans for next deals as lung device bet pays off 

#, 17 December 2015

After being vindicated in her 2014 purchase of a U.S. company with a device to prop open diseased lungs, the chief executive of British healthcare group BTG (BTG.L) is scouring the horizon for the next promising acquisition.

BTG is best known for treating rattlesnake bites, with its antivenom drug CroFab, but Louise Makin sees a different future for the group as a hub for interventional medicine in which image-guided devices are used to treat a range of diseases.

Having delivered the first wave of such products for liver cancer, severe blood clots and varicose veins, Makin agreed her biggest acquisition last December by buying lung device firm PneumRx for $475 million.

That bet paid off this week when a clinical trial proved PneumRx coils produced clinically meaningful improvements when inserted into the lungs of patients with emphysema, paving the way for an eventual U.S. launch. The coils are already approved in Europe.

Now Makin is scouting for fresh opportunities.

"We're open for business for the right thing," she said in an interview. "We constantly scan, we constantly stalk various technologies. People also come to us now because we are unique in taking a position in this fast-growth area of interventional medicine."

BTG has come a long way since its days as the state-owned British Technology Group, when it was a repository for an eclectic mix of intellectual property rights for technologies covering everything from medicines to hovercrafts.

The new-look BTG has a balanced and scalable business, Makin argues, with specialty pharmaceuticals such as CroFab and licensing income from products including Johnson & Johnson's (JNJ.N) cancer drug Zytiga providing resilient cash flow.

That gives a financial cushion for the development of the newer interventional medicine portfolio, in much the same way that UK-listed Shire (SHP.L) has used hyperactivity drugs to underpin its successful push into rare diseases.

"In some ways we are very similar to Shire but we are operating in a different world and we are doing it 10 to 15 years later than them," Makin said.

She declined to identify which therapy area BTG might target next, citing commercial sensitivity, but said the company was keen on devices in adjacent fields to those in which it already operates.

"We are looking for things that might fill up the bag a little bit and that would go to the same doctors," she said.
BTG is targeting revenues of at least $1.25 billion from interventional medicine by 2021, based on its current portfolio, although it acknowledges some of its newer products will take time to become established.

Varithena for varicose veins, in particular, has disappointed investors with its relatively slow uptake. But Makin said she was confident there would be an inflection in its sales growth in the next financial year, starting in April.

(Additional reporting by Paul Sandle; Editing by Mark Potter)