BTG to Net 3 % Royalties on Zytiga Sales

BTG, the British Technology Group that first funded the original research into developing Zytiga, is set to receive 3% royalties on all sales of Zytiga worldwide. With projected annual sales set to reach $ 1 Billion dollars this amounts to a net income for BTG of $ 30 M per annum.

1B Benefix windfall, Zytiga sales tracking $1.2bn/year
BTG recently disclosed a further windfall royalty on Benefix, which added £10m to its revenue guidance of £200 M; Furthermore, reported sales of Zytiga by Johnson & Johnson suggest this product is on track to achieve $1.2bn sales this year. With BTG set to receive 3 % royalties on Zytiga sales it will make a significant contribution to BTG’s revenues of $ 36 M.

J&J Zytiga Sales = $ 1.2 B

BTG 3 % = $ 36 M

ICR 10 % = $ 3.6 M

RTI 10 % = $ 360,000

Zytiga sales roaring ahead

BTG’s 3% net royalty interest on Zytiga has become increasingly valuable, as the drug’s sales approach $1bn/year. J&J claims it to be the most successful oncology product launch ever in the EMEA region, and the second most successful in the US after Avastin. A high-profile presentation of Phase III data at ASCO paves the way for a filing and potential approval in the pre-chemo setting in 2013.

BTG finished 2011/12 with £113m in cash and equivalents. Revenues for the current year ending March 2013 are £190m. We consider it possible that BTG will surpass the guided fiscal 2013 figure, particularly in relation to the contribution from Zytiga. We expect a significant increase in revenues to c £224m in 2013/14 and project c 15% a year sales growth from speciality pharma and interventional oncology businesses over the next three years.

BTG has enjoyed a strong run of positive news in 2012 that has been reflected in a rising share price, up over 30% year to date. Its shares now trading at a high, last reached in 2004. Positive events this year have included the presentation of Phase III data and filing by its partner Sanofi of Lemtrada (alemtuzumab) in multiple sclerosis and the presentation by Johnson & Johnson of Phase III data on Zytiga (abiraterone) at the American Society of Clinical Oncology (ASCO). In addition, BTG has itself reported highly positive efficacy in its two VANISH Phase III studies with Varisolve, the injectable sclerotherapy for varicose veins.