Preliminary Announcement of Results

NEWS RELEASE To: City Editors For immediate release 12 November 2009 The Biotech Growth Trust PLC Unaudited Interim Results for the six months ended 30 September 2009 Financial Highlights 30 September 31 March % Change 2009 2009 Net asset value per share 153.5p 136.9p +12.1 Share price 146.0p 130.5p +11.9 Discount of share price to net asset value 4.9% 4.7% - per share NASDAQ Biotechnology Index (sterling 524.2 477.5 +9.8 adjusted) No interim dividend is proposed. The following are attached: * Chairman's Statement * Review of Investments * Income Statement * Statement of Changes in Equity * Balance Sheet * Cash Flow Statement * Notes to the Interim Financial Statements This Announcement is not the Company's interim report. It is an abridged version of the Company's full interim report for the six months ended 30 September 2009. The full interim report will be sent to shareholders on 17 November 2009. The full interim report, together with a copy of this announcement, will also be available on the Company's website: www.biotechgt.com For further information please contact: Mark Pope, Frostrow Capital LLP 020 3 008 4913 Jo Stonier, Quill Communications 020 7758 2230 Chairman's Statement Performance I am pleased to report another successful period for the Company. This was achieved against a background of a strong recovery in global markets generally due, in part, to a rerating of financial and resources stocks over the period. The Company's net asset value per share rose by 12.1% over the period, an outperformance of 2.3% over our benchmark, the NASDAQ Biotechnology Index, measured in sterling terms. The index rose by 9.8%. Our outperformance can be attributed principally to stock selection with some of the top contributors announcing important clinical progress with their products during the period. Despite our good performance relative to our benchmark index, it should be noted that the biotechnology sector lagged global markets in the period, with the MSCI World Index having risen by approximately 25% in sterling terms. This underperformance compared to global markets in the six month period followed a significant outperformance by the Company and the sector during the Company's previous financial year where the Company's net asset value per share rose by 32.4% compared to a fall of 22.2% in the MSCI World Index measured in sterling terms. I would therefore highlight that, overall, during the 18 month period to 30 September 2009 the performance of the Company and the biotechnology sector has been both stronger and less volatile than that of the wider market. The Company continues to be significantly exposed to the exchange rate prevailing between the U.S. dollar and sterling. During the period the exchange rate moved from 1.4334 to 1.5994, a strengthening of sterling when compared to the U.S. dollar of 11.6%. This adversely affected the Company's performance. It remains the policy of the Company not to hedge against currency exposure. The Company's share price also outperformed the Company's benchmark, rising by 11.9% over the period. The discount of share price to net asset value per share widened slightly from 4.7% at 31 March 2009 to 4.9% at 30 September 2009. Further information on the investment performance and the outlook for the Company is given in the Review of Investments beginning on page five of the Interim Report. New share issue On 25 September the Board announced that it is considering raising additional funds through a placing and offer of ordinary shares. This possibility remains under review and a further announcement will be made in due course. Discount management policy and Share buyback policy The Board has continued to implement its policy of active discount management and to buy back shares for cancellation when the discount of the share price against the net asset value per share is greater than 6%. During the six months under review the Company repurchased a total of 1,168,950 shares at a cost of £ 1.5m (including expenses) for cancellation. Revenue and Dividends The revenue loss for the period was £233,000 (six months ended 30 September 2008: loss of £202,000) and no interim dividend is declared (six months ended 30 September 2008: nil). VAT During the period the Company's previous Manager, Close Investments Limited (`Close'), submitted a claim to HM Revenue and Customs for the repayment of £ 168,000 which equates to 0.3p per share. This amount is in respect of VAT on investment management and performance fees previously paid by the Company to Close and which is now reclaimable by the Company following the ruling by the European Court of Justice in October 2007. In view of the fact that the timing of the recovery of this amount remains uncertain, no receivable amount has been recorded in the Company's financial statements as at 30 September 2009. Alternative Investment Fund Manager (`AIFM') Directive The AIFM Directive is draft legislation currently being considered in Europe which will regulate `alternative investment funds'. It potentially affects all investment companies, including this Company. The Board supports the initiatives being taken by the Association of Investment Companies to ensure that the Directive is tailored to accommodate the investment company structure. The Board will keep shareholders informed of developments concerning the Directive as they arise. Outlook Market conditions in our current financial year have been a welcome contrast to those experienced in our previous financial year and our outlook for the sector remains positive. This is principally against a background of new product development from within the biotechnology sector and renewed merger and acquisition activity as large pharmaceutical companies take advantage of depressed valuations of emerging biotechnology companies. In addition the appointment of a new U.S. Food and Drug Administration (`FDA') commissioner is expected to improve the regulatory environment in the U.S. market. Our focus remains on the selection of stocks with strong prospects for capital enhancement and we continue to believe that the long term investor in our sector will be well rewarded. John Sclater CVO Chairman 12 November 2009 Review of Investments Performance We are pleased to report that the Company's net asset value per share posted a strong increase of 12.1% during the period, compared to an increase of 9.8% in our benchmark index, the NASDAQ Biotechnology Index, measured in sterling terms. Some of the top contributors to the portfolio's performance announced important new clinical progress for their products, including Dendreon, Celgene, and Pharmasset. Dendreon announced positive phase III data for its novel immunotherapy Provenge for prostate cancer, sending the stock up 133% on the day of the announcement. With this favourable result, Provenge will likely be a multi-billion dollar product and the first in a novel class of cancer therapies. Another oncology company, Celgene, reported successful phase III data for Revlimid in front-line multiple myeloma, which will lead to greater use of the drug earlier in treatment. Pharmasset reported positive data for its hepatitis C virus (HCV) protease inhibitor and initiated a phase IIb trial of R7128, an HCV drug partnered with Roche. These compounds are some of the most promising next generation HCV drugs, each with a billion-dollar market potential. Environment and Outlook The past six months have shown strong performance for the broader markets as the financial crisis has abated and the fundamentals of the economy have begun to recover. Biotech, particularly the major biotech companies, underperformed the broader markets during this period. This underperformance stemmed from investor concerns over healthcare reform in the U.S. and followed a period of strong outperformance of biotech versus the broader markets during the market downturn in 2008. Emerging biotech tended to outperform major biotech during the period. At the lows of the market during the first quarter of 2009, there was fear among biotech investors that an inability to finance their operations would lead a number of smaller, unprofitable firms into bankruptcy. As the markets stabilised, a financing window re-opened in the United States, which has provided much needed cash to many smaller companies. A number of our emerging biotech names benefited from the rally that ensued as investors returned to smaller cap names. Uncertainty over healthcare reform in the United States has been an overhang on the biotech sector this year and has contributed to the sector's underperformance. Fears that President Obama and congressional Democrats would enact legislation which would adversely affect the sector have weighed on the minds of many investors. Congressional committees have proposed multiple versions of a healthcare reform bill and lawmakers are now attempting to reconcile the multiple bills into one final piece of legislation. The most controversial aspect of the bill remains whether it will include a public insurance option to compete with private plans to cover the uninsured. Investors are concerned that such an option could eventually lead toward a single-payor system in which the government would have the ability to limit the cost of drugs. We continue to believe that any public option will either be limited in scope or nonexistent in the final legislation. A final vote on a bill will likely occur by the end of the year, whereupon we expect a "relief rally" in the sector as the reform overhang is lifted. Ultimately we believe that healthcare reform will actually be positive for biotech. Biotech companies will benefit from the increased drug utilisation from broader insurance coverage and may get extra marketing exclusivity for their products. Generalist investors remain underweight in healthcare, so we expect large money flows into the sector once reform is finalised. We continue to expect increased merger and acquisition in the biotech space and have positioned the portfolio with this in mind. In May, one of our portfolio companies, Cougar Biotechnology, was acquired by Johnson & Johnson for its potential prostate cancer drug, Abiraterone. The portfolio is currently positioned with a large exposure to companies in the "sweet spot" for acquisition - companies close to product approval or in the early stage of product launch, such as Dendreon, Allos Therapeutics and Alexion Pharmaceuticals. The number of holdings remains approximately 30, exclusive of unquoted investments and warrants. The geographic distribution of assets is 94.5% North America, 5.1% Europe and 0.4% Asia. Currently approximately 40% of the Company's assets are invested in major biotechnology and 60% are invested in emerging biotechnology. The portfolio is still weighted more heavily towards major biotech relative to our historical allocation as we expect these stocks to perform especially well when clarity is reached on healthcare reform. The Company has authority from the Board to borrow up to £15m which is not currently being utilised. We intend to use the Company's borrowing powers to enhance our exposure when opportunities arise. OrbiMed Capital LLC Investment Manager 12 November 2009 Income Statement For the six months ended 30 September 2009 (Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 30 September 2009 30 September 2008 31 March 2009 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Investment income Investment 4 - 4 19 - 19 39 - 39 income Total income 4 - 4 19 - 19 39 - 39 (note 2) Gains and losses on investments Gains on - 9,119 9,119 - 13,891 13,891 - 19,774 19,774 investments held at fair value through profit or loss Exchange - (62) (62) - (397) (397) - (469) (469) losses on currency balances Expenses Investment - (621) (621) - (319) (319) - (871) (871) management, management and performance fees (note 3) Other (235) - (235) (215) (8) (223) (408) (7) (415) expenses Profit/ (231) 8,436 8,205 (196) 13,167 12,971 (369) 18,427 18,058 (loss) before finance costs and taxation Finance (2) (3) (5) (6) (22) (28) (7) (75) (82) costs Profit/ (233) 8,433 8,200 (202) 13,145 12,943 (376) 18,352 17,976 (loss) before taxation Taxation - - - - - - - - - Profit/ (233) 8,433 8,200 (202) 13,145 12,943 (376) 18,352 17,976 (loss) for the period Earnings/ (0.5)p 16.9p 16.4p (0.3)p 22.4p 22.1p (0.7)p (32.7)p (32.0) (loss) per p share (note 4) The Company does not have any income or expenses which are not included in the profit for the period. Accordingly, the "Profit for the period" is also the "Total comprehensive income for the period", as defined in IAS 1 (revised) and no separate Statement of Comprehensive Income has been presented. All of the profit and total Comprehensive Income for the period is attributable to the owners of the Company. The total column of the statement is the Income Statement of the Company prepared in accordance with IFRS. The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the Association of Investment Companies. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period. Statement of Changes in Equity Six months ended 30 September 2009 (Unaudited) Share Special Capital Capital Retained Total £ Capital Reserve Redemption Reserve Earnings '000 £'000 Reserve £'000 £'000 £'000 £'000 At 31 March 12,824 33,800 4,307 21,926 (2,649) 70,208 2009 Net profit/ - - - 8,433 (233) 8,200 (loss) for the period Buyback of (292) (1,475) 292 - - (1,475) shares At 30 12,532 32,325 4,599 30,359 (2,882) 76,933 September 200 9 Six months ended 30 September 2008 (Unaudited) Share Special Capital Capital Retained Total £ Capital Reserve Redemption Reserve Earnings '000 £'000 Reserve £'000 £'000 £'000 £'000 At 31 March 15,596 46,065 1,535 3,574 (2,273) 64,497 2008 Net profit/ - - - 13,145 (202) 12,943 (loss) for the period Buyback of (1,649) (6,897) 1,649 - - (6,897) shares At 30 13,947 39,168 3,184 16,719 (2,475) 70,543 September 2008 Year ended 31 March 2009 (Audited) Share Special Capital Capital Retained Total £ Capital Reserve Redemption Reserve Earnings '000 £'000 Reserve £'000 £'000 £'000 £'000 At 31 March 15,596 46,065 1,535 3,574 (2,273) 64,497 2008 Net profit/ - - - 18,352 (376) 17,976 (loss) for the year Buyback of (2,772) (12,265) 2,772 - - (12,265) shares At 31 March 12,824 33,800 4,307 21,926 (2,649) 70,208 2009 Balance Sheet as at 30 September 2009 (Unaudited) (Unaudited) (Audited) 30 30 31 March September September 2009 2008 2009 £'000 £'000 £'000 Non current assets Investments held at fair value through 77,434 72,657 71,256 profit or loss Current assets Other receivables 2,031 257 1,066 Cash and cash equivalents 95 483 2,161 2,126 740 3,227 Total assets 79,560 73,397 74,483 Current liabilities Other payables 2,627 932 1,136 Bank overdraft - 239 - Bank loan - 1,683 3,139 2,627 2,854 4,275 Net assets 76,933 70,543 70,208 Equity attributable to equity holders Share capital 12,532 13,947 12,824 Special reserve 32,325 39,168 33,800 Capital redemption reserve 4,599 3,184 4,307 Capital reserve 30,359 16,719 21,926 Retained earnings (2,882) (2,475) (2,649) Total equity 76,933 70,543 70,208 Net asset value per share (note 5) 153.5p 126.4p 136.9p Cash Flow Statement for the six months ended 30 September 2009 (Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 30 September 200 30 September 2008 31 March 2009 9 £'000 £'000 £'000 Net cash inflow from 3,218 5,382 10,679 operating activities (note 6) Net cash inflow before 3,218 5,382 10,679 financing Net cash outflow from (5,222) (5,552) (8,860) financing activities Net (decrease)/increase in (2,004) (170) 1,819 cash and cash equivalents Cash and cash equivalents 2,161 811 811 at start of period Realised loss on foreign (62) (397) (469) currency Cash and cash equivalents 95 244 2,161 at period end Notes to the Interim Financial Statements 1. Accounting Policies The condensed financial statements have been prepared under the historical cost convention, except for the measurement of investments which are valued at fair value, and in accordance with applicable accounting standards and with the Statement of Recommended Practice `Financial Statements of Investment Trust Companies' dated January 2009. The same accounting policies used for the year ended 31 March 2009 have been applied. 2. Income (Unaudited) (Unaudited) (Audited) Six months Six months Year ended ended 30 ended 30 31 March September September 2009 2009 2008 £'000 £'000 £'000 Investment income 4 19 39 Total income 4 19 39 3. Investment Management, Management and Performance Fees (Unaudited) (Unaudited) (Audited) Six months Six months Year ended ended 30 ended 30 31 March September September 2009 2009 2008 £'000 £'000 £'000 Investment management fee 226 223 449 Management, administrative and 101 96 198 company secretarial fee fee Performance fee accrued 294 - 224 621 319 871 4. Earnings/(Loss) per Share The earnings/(loss) per share figure is based on the net gain for the six months of £8,200,000 (six months ended 30 September 2008: £12,943,000 gain; year ended 31 March 2009: £17,976,000 gain) and on 50,043,197 (six months ended 30 September 2008: 58,644,725 and year ended 31 March 2009: 56,196,626) shares, being the weighted average number of shares in issue during the period. Notes to the Interim Financial Statements (continued) The return per share detailed above can be further analysed between revenue and capital as follows: (Unaudited) (Unaudited) (Audited) Six months Six months Year ended ended 30 ended 30 31 March September September 2009 2009 2008 £'000 £'000 £'000 Net revenue loss (233) (202) (376) Net capital gain 8,433 13,145 18,352 Net total gain 8,200 12,943 17,976 Weighted average number of shares 50,043,197 58,644,725 56,196,626 in issue during the period Pence Pence Pence Revenue loss per share (0.5) (0.3) (0.7) Capital earnings per share 16.9 22.4 32.7 Total earnings per share 16.4 22.1 32.0 5. Net Asset Value per Share The net asset value per share is based on the net assets attributable to equity shareholders of £76,933,000 (30 September 2008: £70,543,000; 31 March 2009: £ 70,208,000) and on 50,127,463 (30 September 2008: 55,789,463; 31 March 2009: 51,296,413) shares, being the number of shares in issue at the period end. 6. Reconciliation of Profit Before Taxation to Net Cash Outflow From Operating Activities (Unaudited) (Unaudited) (Audited) Six months Six months Year ended ended 30 ended 30 September 2009 September 2008 31 March £'000 £'000 2009 £'000 Profit before taxation 8,200 12,943 17,976 Gain on investments held at fair (9,057) (13,494) (19,305) value through profit or loss Net sales of investments held at 3,678 5,926 11,788 fair value through profit or loss Decrease/(increase) in other 17 5 (9) receivables Increase in other payables 380 2 229 Net cash inflow 3,218 5,382 10,679 Notes to the Interim Financial Statements (continued) 7. Transaction Costs Purchase and sale transaction costs for the six months ended 30 September 2009 were £183,000 (year ended 31 March 2009: £239,000; six months ended 30 September 2008: £125,000). These costs comprise mainly stamp duty and broker commission. 8. Contingent Asset On 31 October 2007 the Association of Investment Companies announced that HM Revenue and Customs had confirmed to the Investment Management Association that investment trust investment management fees should no longer attract Value Added Tax (VAT). As a result, during the period the Company's previous investment manager, Close Investments Limited (`Close'), submitted a claim to HM Revenue and Customs for the repayment of £168,000, equating to 0.3p per share. This amount is in respect of VAT previously paid by the Company to Close and which is now reclaimable by the Company. In view of the fact that the timing of the recovery of this amount remains uncertain, no receivable amount has been recorded in the Company's financial statements as at 30 September 2009. 9. Comparative Information The financial information contained in this interim report does not constitute statutory accounts as defined in section 435 (1) of the Companies Act 2006. The financial information for the six months ended 30 September 2009 and 2008 has not been audited or reviewed by the auditors. The information for the year ended 31 March 2009 has been extracted from the latest published audited financial statements. The audited financial statements for the year ended 31 March 2009 have been filed with the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report, and did not contain statements under section 237(2) or (3) of the Companies Act 1985.

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