Final Results - Part 2

Intl. Biotechnology Trust PLC
27 November 2000



PART TWO

INVESTMENT REVIEW: REVIVAL, RETURNS & RENEWAL

Investment Policy


The investment focus of the International Biotechnology Trust (IBT) since
inception has been on emerging bioscience companies which have a need for
finance to fund their development, which can benefit from operational or
strategic support to accelerate their progress and which have the potential to
deliver substantial appreciation in value.

The investment objective of IBT has been to create a concentrated portfolio of
approximately 25 diverse core holdings. IBT takes minority stakes in companies
which have already been listed on a stock exchange or which are approaching
flotation, provides follow-on finance as necessary during the critical phases
of a company's evolution and targets an investment horizon of three to five
years.

IBT's international portfolio comprises companies that are developing
commercial products addressing the needs of human healthcare and
pharmaceutical development. Typically, investee companies at different stages
of development will have products on or near to the market, in advanced stages
of clinical development, or emerging from innovative technology platforms.

The Investment Year in Perspective


The year under review was truly memorable from several standpoints, as
highlighted in the Chairman's Statement.

Firstly, IBT's portfolio showed phenomenal growth in value on the back of a
re-invigorated biotech market. Secondly, the Trust was able to take advantage
of increased liquidity in the market to divest successfully from a number of
core holdings and thereby to generate substantial returns. Thirdly, the
proceeds from divestment were re-invested in nine new investee companies to
renew the portfolio.

In the course of the 1998-1999 financial year, IBT had reached full investment
and had met the objective of creating a portfolio of core holdings diversified
in terms of each investee company's stage of development, technological and
therapeutic focus and geographic location. The Manager's focus during that
year, a period which coincided with a prolonged downturn of sentiment in the
biotech market, was to provide on-going support to investee companies and to
manage the maturing portfolio.

The Manager's investment activities in this financial year were also strongly
dictated by market events.

Key divestments

As anticipated, the beginning of the financial year saw the completion of the
acquisition of SUGEN by Pharmacia & Upjohn and the subsequent disposal of the
Pharmacia & Upjohn shares received as the consideration for the transaction.
SUGEN, then a private company, was IBT's first investment in 1995 and is the
first of the Trust's long-term core holdings to provide a substantial capital
return for shareholders.

IBT also divested from another strategic investment made in 1995 in Medarex, a
public US company pioneering novel antibody therapeutics. The growing
acceptance by the pharmaceutical industry of antibodies as discovery tools in
genomics and as commercially viable therapeutic products led to a
disproportionate level of investor enthusiasm for antibody companies, Medarex
included, during the peak of the biotech market in March 2000. The share price
of MorphoSys, a private German antibody company when IBT invested in 1997 and
subsequently listed on the Neuer Markt, also climbed spectacularly given added
spice by local market enthusiasm and afforded IBT an exit at close to the peak
of the market.

During the year, IBT also divested completely from a substantial core holding
in Cubist Pharmaceuticals, a US listed anti-infectives company which had
generated good data and progressed its lead compound into pivotal clinical
trials.

New investments

With the proceeds from realisations, IBT made nine new investments in core
holdings during the period.

Of the nine investments, three were in public companies: one US company listed
on NASDAQ (OSI Pharmaceuticals) and two Canadian companies (AnorMED and
Inflazyme Pharmaceuticals) listed on the Toronto Stock Exchange. Of the six
investments in unlisted companies, three are located in the US (Delsys
Pharmaceuticals, eBioinformatics and Sunesis Pharmaceuticals), one in Canada
(ImmGenics Pharmaceuticals), one in Germany (Axxima Pharmaceuticals) and one
(ValiGen) has transatlantic operations.

The 'school of 2000' includes companies with therapeutic products in clinical
development for the treatment of cancer, infectious and inflammatory diseases
and other serious diseases which are not adequately treated at present. A
number of these companies are using novel methodologies to discover small
molecule drugs acting on the signalling pathways within cells that are
implicated in health and disease. Others are providing some of the
technologies with a key place in the future development of the bioscience
industry: antibody discovery, bioinformatics, genomics and pharmaceutical
formulation.

The new portfolio companies have the potential to deliver significant value
appreciation over the next three to five years in line with the Trust's
investment policy.

Further divestment

Following the outcome of the EGM held on 7 July 2000, the Manager's attention
became redirected to managing the newly enlarged portfolio, to ensuring a
strong cash position for the Trust by exiting from non-core investments and to
taking advantage of event-driven opportunities to divest selectively from
existing core holdings. In the subsequent period, extending beyond the year
end to 7 November, IBT benefited from positive news flow and increased
liquidity in the market to divest completely from Cadus Pharmaceuticals and
GelTex Pharmaceuticals and to reduce its holdings in Angiotech Pharmaceuticals
and Cell Therapeutics.

Portfolio companies

The biotech year since the start of 2000 has been without precedent in the
history of the industry and the investee companies within IBT's portfolio have
reflected many of the major trends.

As in previous biotech booms, a receptive US market rewarded companies owning
key technologies and products and demonstrating their successful development.
In addition to the companies from which IBT divested during the year,
Angiotech Pharmaceuticals, Cell Therapeutics, Corixa, Corvas International,
Onyx Pharmaceuticals and OSI Pharmaceuticals all showed significant share
price increases linked to important pipeline progress. In the case of OSI, a
decision by the US regulators resulted in the company being granted the full
rights to a promising Phase II anti-cancer agent and the market reacted very
positively. The UK market, in contrast, remained lukewarm towards the progress
made during the year at Biocompatibles International, CeNeS Pharmaceuticals
and Vernalis.

Positive sentiment towards value-adding events, both achieved and promised in
the future, remained critical to the ability of companies to secure finance.
Angiotech Pharmaceuticals, listed on the Toronto Stock Exchange, succeeded in
raising US$93 million in a public offering on NASDAQ. Another notable feature
of the year was the number and size of secondary offerings on the NASDAQ
exchange. Cell Therapeutics, Corvas International and Onyx Pharmaceuticals
each raised US$100 million or more and OSI Pharmaceuticals managed to raise
US$375 million in a single offering. Cash infusions of this magnitude provide
companies with the capital to progress products further into development and
to retain greater ownership of successful products.

Consolidation continued to play a role in building stronger technology
platforms and product pipelines so accelerating biotech company growth.
Notable among IBT's longer-term investments: Biocompatibles acquired Hydron;
Core Group, an IBT investment, was merged into CeNeS Pharmaceuticals, which
subsequently acquired a US-listed company, Cambridge NeuroSciences; Targeted
Genetics acquired Genovo; and Vanguard Medica acquired a private neuroscience
company, Cerebrus, then re-styled itself as Vernalis. Of IBT's new
investments, ValiGen was itself the product of a recent merger between two
companies and promptly added a third by acquiring ImmGenics, was snapped up by
one of the gorillas of the antibody world, Abgenix, at a significant premium
to the valuation at which IBT invested.

Angiotech Pharmaceuticals Inc.

In December 1997, Angiotech raised a total of C$22 million in its IPO of which
IBT contributed C$7 million.

Angiotech is dedicated to the development of medical device coatings and
treatments for chronic inflammatory diseases through the reformulation of the
anticancer drug, paclitaxel. Three therapies are in clinical development:
systemic micellar paclitaxel for multiple sclerosis (MS) and rheumatoid
arthritis (RA) and topical paclitaxel for psoriasis. Other programmes include
paclitaxel-coated stents (partnered with Boston Scientific Corp and Cook Inc),
implants used in peripheral vascular surgery for the prevention of stenosis
(partnered with CR Bard), and the use of paclitaxel in proliferative
ophthalmic indications (partnered with Alcan).

Angiotech completed its Phase I/II MS clinical study and results demonstrated
that a significant percentage of patients showed favourable trends in
paclitaxel's effect on overall disability and function, quality of life and
changes in the amount of brain tissue scarring. A 190-patient, double-blind,
placebo-controlled, Phase II MS study is planned to be initiated later this
year at multiple centres throughout Canada.

In the paclitaxel-coated stent programmes, Boston Scientific has now initiated
a Phase I clinical trial in Europe, and Phase I trials of a paclitaxel
formulation in psoriasis patients have demonstrated that the drug was safe and
well tolerated.



AnorMED Inc.

Between March and June 2000, IBT invested C$10.7 million in publicly quoted
Canadian-based AnorMED Inc.

AnorMED is an emerging drug discovery and development company with expertise
in coordination chemistry: the science of how metal atoms interact with
molecules and ions in the body. AnorMED combines this expertise with its
knowledge of medicinal chemistry to develop novel small molecule therapeutics
for the treatment of life threatening diseases, including cancer and HIV.
AnorMED has significant expertise designing drug candidates with specific
biological effects within the area of metal and metal-binding compounds.

AnorMED is focused on adding value to its drug leads and discoveries by
advancing them to a point where corporate partnerships can be negotiated.
AnorMED has three such agreements in place with AstraZeneca plc, DuPont
Pharmaceutical Company and Shire Pharmaceuticals Group. The Company has a
number of product candidates in clinical trials, including one in Phase III,
two in Phase II and one in Phase I.

ZD0473, a new generation platinum anti-cancer agent designed to deliver an
extended spectrum of activity and overcome classical platinum resistance has
entered Phase II clinical studies through a collaboration with AstraZeneca,
both as a monotherapy and in combination with other cytotoxic agents. Lambda
is in Phase III trials for the treatment of hyperphosphatemia in kidney
dialysis patients, and AMD-3100, a potential therapeutic for HIV, has entered
Phase II clinical trials.



Axxima Pharmaceuticals AG

In March 2000, IBT invested DM3.5 million in the German-based pharmaceuticals
company, Axxima Pharmaceuticals AG.

Axxima is a leader in the application of pathogen-host signal transduction
intervention. Axxima develops proprietary drugs that are based on the
company's revolutionary approach to generate a Signal Transduction Firewall
(STFTM) against the pathogen. This distinguishes Axxima from other existing
anti-infective drug discovery company. Axxima's business strategy is to pursue
anti-infective drug discovery from beginning to end, from target
identification to drug development, making it a small pharmaceutical company
rather than a traditional platform-based biotechnology start-up.


Biocompatibles International plc

In December 1996, IBT purchased £4.4 million of Biocompatibles' shares and
subscribed £2.9 million in subsequent rights issues.

Biocompatibles is an international medical device company supplying products
containing a proprietary polymer, phosphorylcholine (PC), that improves
biocompatibility. PC is a chemical group found in the membrane of living cells
and is the body's own natural biocompatible coating. Biocompatibles has
developed technology to apply PC to medical devices so that the body does not
recognise the device as foreign and therefore does not reject it.

The company is commercialising contact lenses and coronary stents and has
demonstrated that the presence of PC improves the performance of these
products by reducing the complications associated with their use.

The ProclearTM soft contact lens is approved in the US, Europe and other
territories and has been granted a unique label claim by the FDA which states
that the product is beneficial for patients who suffer from dry eye problems.
Biocompatibles has entered the UK private label contact lens market through an
own label agreement with SpecSavers, the leading UK optical retailer. During
2000, Biocompatibles expanded its eye care division through the acquisition of
Hydron, a UK-based contact lens manufacturing and distribution company. The
ProclearTM range is being launched through Hydron's direct sales forces in
various territories, including the UK and South Africa.

The BiodivYsioTM pre-mounted coronary stent is approved in Europe and has
received an approvable letter from the US FDA. Launch in the US is anticipated
in the first quarter of 2001, and the stent will be marked by Abbott.

Biocompatibles is now focusing its research and development efforts on drug
delivery of active agents from PC-coated stents. It is anticipated that one or
more clinical trials using approved pharmaceutical products will be initiated
in the near future.

Cell Therapeutics Inc.

Cell Therapeutics raised US$32 million in a financing round led by a total
investment of US$12.5 million from IBT between March 1995 and September 1996.
A further US$2.5 million was invested in the company's Initial Public Offering
in March 1997 which raised US$33 million.

Cell Therapeutics focuses on the development and commercialisation of an
integrated portfolio of oncology products aimed at making cancer more
treatable. Cell Therapeutics purchased PolaRx Biopharmaceuticals Inc., through
which it acquired Trisenox, a compound based on a derivative of arsenic, in
late stage clinical trials in cancer. Trisenox has progressed rapidly and was
approved in the US for the treatment of acute promyelocytic leukaemia in
September 2000, and launched, ahead of schedule, in October 2000. The company
is now developing this drug for other types of cancer.

In addition, Cell Therapeutics is developing Apra, a small molecule drug with
a unique mechanism of action that is toxic to cancers that resist conventional
chemotherapeutic agents, without being susceptible to multidrug resistance
itself. Apra is currently undergoing Phase II trials.

Cell Therapeutics also holds exclusive rights to develop a novel polymer
derivative of paclitaxel (PG-TXL) for the treatment of breast, colon, lung and
other forms of cancer. This has entered Phase I trials in collaboration with
the UK Cancer Research Campaign, and has recently received FDA approval to
enter Phase I trials in the US.



CeNeS Pharmaceuticals plc

IBT invested £2 million as the major investor in Core Group's £6.9 million
private placing in September 1996 and later made further investments. In
November 1999 it was announced that CeNeS Limited would merge with Core Group
plc to create CeNeS Pharmaceuticals plc. As a shareholder in Core, IBT's
investment was transferred into the equivalent value of CeNeS Ordinary shares.


CeNeS is focused on developing drugs for CNS disorders and pain control and
the development of controlled release drug delivery products. The Company has
clinical programmes for the treatment of stroke, pain, schizophrenia, sleep
disorders and substance abuse.

Moraxen, the lead product from the former Core Group, has been approved in the
UK for the treatment of severe cancer pain, and will be marketed by Schwartz
Pharma AG. In September, CeNeS bought the rights to three hospital products
from GlaxoWellcome to accelerate revenue generation by the Company.

CeNeS' pipeline includes sipatrigine, a treatment for stroke, licensed from
Glaxo Wellcome, which is currently undergoing Phase II clinical trials, and
CEE 03-310, a dopamine D1 receptor antagonist which has shown positive results
in a Phase II trial for sleep disorders. CEE 03-310 is in Phase I trials as a
potential therapy for drug abuse and the company is also developing a morphine
metabolite, morphine-6-glucuronide, which is in Phase I development for severe
post operative pain. CeNeS has announced that it intends to acquire Cambridge
NeuroScience Inc., a US-based company, in order to broaden its product
pipeline. This transaction is anticipated to be completed before the end of
2000.

CeNeS Pharmaceuticals is conducting research through collaborative programmes
into new therapeutic approaches for the treatment of Alzheimer's and
Parkinson's disease. The Company generates revenues from CeNeS Drug Delivery,
which has five platform drug delivery technologies targeted to meet specific
therapeutic needs; CeNeS Cognition, which provides equipment and services in
the area of cognition research, and CeNeS Channelwork, which sells ion channel
contract services to the pharmaceutical industry.

Corixa Corporation

In April 1995, IBT was a lead investor in Anergen, investing US$5 million in a
US$15 million financing round. In December 1998, Anergen was acquired by
Corixa and IBT's investment in Anergen was converted into shares of Corixa
Common Stock.

Corixa is a research-based biotechnology company focused on understanding and
directing the immune system to prevent infectious and autoimmune diseases. It
applies its advanced immunological expertise and proprietary technology
platforms for rapid discovery and optimisation of vaccines and other
antigen-based products.

The company's products include AnervaX RA, which has successfully completed
Phase II clinical trials for the treatment of rheumatoid arthritis; PVACTM, an
immunotherapeutic for psoriasis, currently in Phase II trials, and a Her2/neu
vaccine for breast and ovarian cancer, currently in Phase I trials. In
addition, Corixa has recently established antibody discovery efforts to
complement its antigen discovery programme.

In October 2000, Corixa agreed to acquire Coulter Pharmaceutical Inc. to add
cancer drugs to its portfolio, including Bexxar, a non-Hodgkin's lymphoma
treatment that could reach the market as early as 2001. If the transaction,
which is subject to approval by shareholders and regulatory authorities, goes
ahead, Corixa will have sixteen corporate partnerships focusing on therapeutic
products for cancer, infectious disease and autoimmune disease and sixteen
products in clinical trials.

Corvas International Inc.

In February 1996, IBT invested US$6.8 million as the lead investor in a US$15
million private placement for Corvas. In August 1999, IBT made a further
investment in Corvas of US$750,000.

Corvas International is engaged in the discovery, development and
commercialisation of novel therapeutics that address large unmet markets,
including cardiovascular disease and other cancer. The company intends to
commercialise oral and injectable therapeutics for cardiovascular indications
such as thrombosis and related cardiovascular indications including heart
attack, deep vein thrombosis, pulmonary embolism and ischemic stroke.

NIF (neutrophil inhibitory factor) is partnered with Pfizer to treat ischemic
stroke and has completed a number of Phase II trials, while Corvas'
proprietary acute anticoagulant rNAPc2 has produced promising results in a
Phase IIa trial to treat deep vein thrombosis. Corvas is also applying its
proprietary drug discovery capabilities in protease inhibition and
combinatorial chemistry to identify and develop novel inhibitors for the
treatment of Hepatitis C (partnered with Schering-Plough) and malaria.

In addition, Corvas has a number of anti-cancer programmes targeting
inhibitors of urokinase, plasminogen activator inhibitor antagonists and
vascular targets that are designed to inhibit cancer metastasis and
angiogenesis.

Delsys Pharmaceutical Corporation

New investment in April 2000, IBT invested US$10 million in a private round in
Delsys.

Electrostatic technology is widely used today in the high-speed printing and
photocopy industries to deposit toner on paper. Delsys is developing Accudep
TM, a unique electrostatic deposition process that essentially 'prints' drug
powders onto polymer films. AccudepTM enables novel drug delivery
opportunities and makes possible significant improvements in the efficiency of
drug product manufacture.

Very small drug doses can be printed and incorporated into dosage forms that
provide pre-programmed, pulsatile release of drug in the body. The AccudepTM
drug delivery technology is especially applicable to potent drugs that are
often developed in the oncology, endocrinology, CNS and cardiovascular fields.
Using electrostatics, drug powders are accurately and rapidly printed onto
films in a process that has fewer steps than conventional manufacturing
technology, thus reducing the complexity and batch cycle time of production
operations. Delsys is developing commercial manufacturing capabilities through
a joint venture with Elan Pharmaceutical Operations.

Delsys has formed a second joint venture with Elan Pharmaceutical Technologies
to develop oral, controlled release products, the first of which has completed
preclinical testing and is due to enter a human clinical trial in late 2000.
The company has also established R&D collaborations to develop solid oral dose
products with Pfizer, SmithKline Beecham, and Johnson & Johnson.



eBioinformatics Holdings Inc

New investment in 2000, IBT invested US$3 million in US-based eBioinformatics.
IBT was a co-lead investor as part of a US$10 million private equity financing
of Series C preferred stock.


eBioinformatics was established in May 1998 as Australia's first commercial
bioinformatics company. In July 1999, eBioinformatics, Inc. was incorporated
in the USA as the first Application Services Provider (ASP) to focus on
providing bioinformatics services to the academic and biotechnology
communities worldwide. The difficulty of managing the flood of data generated
by biomedical and biotechnology research is the opportunity behind
eBioinformatics ' products. The company was founded on the belief that a
user-friendly web-based bioinformatics product will transform science's
ability to make use of the wealth of genetic information currently being
generated by research efforts.


In March 2000, eBioinformatics announced the introduction of new features and
capabilities now available through BioNavigator, their Internet-accessible
bioinformatics and e-commerce application service. BioNavigator is a
stand-alone, unified bioinformatics resource providing high-throughput data
analysis and management, advanced molecular modelling and a running historical
record of analyses. This service provides scientists with capabilities and
support services comparable to those enjoyed by researchers in the world's
largest genome sequencing and analysis centres.

Epimmune Inc.

In November 1994, IBT invested US$5 million as the lead investor in a US$9.4
million private placement in Cytel Corporation. IBT invested a further US$2.8
million in Cytel between June 1996 and February 1998. In June 1999, Cytel
announced that it had merged with its majority-owned subsidiary, Epimmune Inc,
and renamed the company Epimmune Inc.

Epimmune focuses on developing novel vaccines that stimulate the body's immune
system to treat and prevent infectious diseases and cancer. Epimmune's unique
capabilities include a rapid Epitope Identification System (EISTM) for
identifying antigen fragments (epitopes) capable of eliciting a potent immune
response. In animal models, Epimmune has demonstrated that its EpiGeneTM
vaccines can induce a broader and more potent immune response than other
vaccine approaches. In the cancer field, Epimmune is collaborating with
Pharmacia Corporation to develop immune stimulating products for the treatment
of breast, colon, lung, prostate and other cancers. The lead vaccine is
expected to enter clinical trials during 2001. Epimmune is also pursuing
development of therapeutic vaccines for hepatitis C, hepatitis B and HIV, and
prophylactic vaccines for hepatitis C, HIV and malaria.

ImmGenics Phamaceuticals Inc.

New investment in May 2000, IBT invested C$3.9 million in ImmGenics.

ImmGenics is a company focused on the commercialisation of high potency, high
affinity monoclonal antibodies for the diagnosis, prevention and treatment of
human diseases.

ImmGenics was founded in 1993 to commercialise its proprietary SLAM Technology
that enables the rapid generation of high potency, very high affinity human
and other monoclonal antibodies for the development of therapeutic and in vivo
diagnostic products, and of very high affinity rabbit and mouse monoclonal
antibodies for the development of in vitro diagnostic products.

In November 1998, ImmGenics entered into a strategic alliance with Corixa
Corporation, and in September 1999, it signed a co-development agreement with
Genzyme Corporation.

In November 2000, Immgenics was acquired by the leading antibody company
Abgenix.



Inflazyme Pharmaceuticals Ltd

In June 2000, IBT invested C$12 million (US$8 million) in Inflazyme, a
Vancouver-based biopharmaceutical company.


Inflazyme focuses on the discovery, development and commercialisation of
therapies to treat serious inflammatory diseases including asthma, rheumatoid
arthritis, psoriasis and inflammatory bowel disease.

Inflazyme's business strategy is to add value to its technologies by
developing product candidates through Phase II clinical trials, and then seek
corporate partnerships and out-licensing opportunities with large
pharmaceutical companies to continue the development and commercialisation
process.

Inflazyme's core technology is based on four separate and novel series of
small molecule compounds: IPL576, IPL423, PDE4 Inhibitors, and H1/NK1dual
antagonists- from which it may be possible to derive a wide range of novel
therapies for inflammatory diseases.


Inflazyme's lead molecule, IPL576,092, is being developed as a potential new
oral treatment for asthma and respiratory disease in collaboration with
Aventis Pharma. IPL576,092 has now completed phase I clinical trials and was
found to be safe and well tolerated.

LocalMed Inc

In February 1996, IBT invested US$3 million as the lead investor in a US$16
million private placement by LocalMed.

This investment was written off during the previous financial year.

NetGenics Inc

In March 1998, IBT invested US$5 million in NetGenics as the lead investor in
a private placement, which raised a total of US$17.7 million. A further
US$500,000 was invested in April 1999.

Privately held NetGenics Inc provides its expertise in bioinformatics to
pharmaceutical, biotechnology and agriscience enterprises seeking to solve
specific research integration problems. Through a customised approach to
working with research organisations, NetGenics ensures that life science
companies accelerate the product development cycle while decreasing their
research costs.

NetGenics' core product, SYNERGYTM, supports an integrated suite of
bioinformatics applications and provides the technical foundation for the
design, development and delivery of NetGenics' custom integration solutions.
SYNERGY also incorporates an evolving set of software components to provide
the essential functionality common in research computing while allowing its
basic framework to be adapted and expanded to meet the customer's precise
needs. Currently, NetGenics offers Sequence Analysis and Gene Expression
applications as add-ons to the SYNERGY Framework.

NetGenics' customers include Abbott Laboratories, Chicago, Plant Genetic
Systems, Pfizer, Groton and CT. NetGenics also has been selected by IBM to
partner in the deployment of IBM's DiscoveryLinkTM solution for the life
science market.

During 2000, NetGenics acquired two bioinformatics software products from
Family Genetix, ChemSymphony and MetaSymphony, which add capabilities in
chemical structures and molecular biology.

Onyx Pharmaceuticals Inc.

In January 1998, IBT invested US$8 million as the lead investor in Onyx in a
US$10 million private placement, and invested a further US$2 million in a
subsequent private placement in January 2000.

Onyx is engaged in discovery, development and commercialisation of novel
cancer therapies based on proprietary virus technologies. The Company pursues
a strategy of establishing corporate partnerships that provide complementary
skills in technology, chemistry, drug development, marketing and sales.

The company's lead therapeutic virus, CI-1042, which targets tumour types with
mutated p53 tumour-suppressor genes, has entered pivotal Phase III trials in
head and neck cancer. Interim data from Phase II trials indicated that the
drug appeared to boost the effects of chemotherapy and helped to shrink
tumours. CI-1042 is also in Phase I and Phase II trials in a number of
additional cancer indications.

In addition, an orally active small molecule targeting the ras signalling
pathway has entered Phase I clinical trials in Germany under a co-development
agreement with Bayer Corporation. Phase II trials are due to be initiated in
early 2001. Onyx has recently announced an agreement with Epttco Ltd in the UK
for targeted delivery of cancer drugs to tumours using viruses.



OSI Pharmaceuticals Inc

In February 2000, IBT invested US$8.5 million in OSI as part of OSI's
successful US$56 million private placement.


OSI is a leading drug discovery company with a substantial pipeline of product
opportunities for commercialisation with the pharmaceutical industry. OSI's
research programs are focused in the areas of cancer therapeutics, respiratory
diseases, diabetes and cosmeceuticals. OSI utilises a comprehensive drug
discovery and development capability to facilitate the rapid and
cost-effective discovery and development of novel, small molecule compounds
against more than forty gene targets. OSI is involved in long-term research
alliances with Pfizer, Tanabe, Novartis, Aventis, Sankyo, and Solvay.

OSI's lead compound is an EGFR (epidermal growth factor receptor) inhibitor,
an exciting anti-cancer drug, currently in large-scale Phase II trials. OSI
has recently re-acquired full development and marketing rights to this
programme from Pfizer in order that Pfizer may satisfy regulatory requirements
for its proposed merger with Warner-Lambert. Phase I studies have been
initiated for a second novel anti-cancer drug (CP-609,754) which inhibits a
key mediator of the functioning of the ras oncogene. An additional twelve
targets are in active research and development in the OSI/Pfizer
collaboration.

Ribozyme Pharmaceuticals Inc.

In June 1995, Ribozyme raised US$10 million in a private funding round in
which IBT was the lead investor with a US$5 million investment. IBT invested
an additional US$2 million at Ribozyme's IPO in April 1996 which raised
US$28.4 million. In October 1997, IBT invested a further US$2.2 million, and
in July 1999, a further US$1 million.

Ribozyme is the acknowledged leader in ribozyme therapeutic development. Based
on its proprietary technologies, the company has a product portfolio of
ribozymes for the treatment of a broad range of acute and chronic diseases
including AngiozymeTM, an anti-angiogenic ribozyme designed to inhibit the
growth of new blood supplies to tumours, in Phase II trials in solid tumours,
and an anti-hepatitis C ribozyme in Phase I studies.


In January 2000, Ribozyme concluded a joint-venture with Elan to develop and
commercialise Herzyme, a ribozyme targeted against HER-2 (Human Epidermal
Growth Factor receptor Type 2) which is about to enter clinical trials.
Ribozyme is also conducting a proof-of-principle gene therapy trial using
vectors to deliver ribozymes for the treatment of HIV, in Phase I/II trials.
The company intends to initiate further development programmes in additional
indications.

The Company has a therapeutic collaborative agreement with Chiron, and target
validation agreements with Parke-Davis (a division of Pfizer), Schering AG,
Roche Bioscience, and Glaxo Research and Development Ltd. In addition
Ribozyme, owns a majority stake in Atugen Biotechnology GmbH, a German company
established to utilise Ribozyme's proprietary ribozyme and related
technologies as a continuation of the Company's target validation and
discovery business.

Sunesis Pharmaceuticals Inc.

New investment in July 2000, IBT invested US$5 million in a US$60 million
private placement in Sunesis.

Sunesis specialises in the discovery, optimisation, and early development of
pharmaceuticals for the treatment of major human diseases. Sunesis is focused
on the discovery of small molecules that inhibit protein-protein interactions
and intractable enzyme targets, utilising a proprietary, broadly applicable
technology to discover these small molecule drugs. Sunesis aims to establish
partnerships with pharmaceutical companies to facilitate development of lead
compounds.

Targeted Genetics Corporation

In July 1995, IBT was the lead investor providing US$4.5 million in a US$12.5
million private placement. In June 1996, IBT invested an additional US$1
million in the Company's Public Offering which raised US$16.1 million and a
further US$3.0 million in April 1998.

Targeted Genetics develops gene therapy products for the treatment of acquired
and inherited diseases. The Company has lead clinical product development
programmes targeting cystic fibrosis and cancer, and a promising preclinical
pipeline of product candidates focused on hemophilia A, arthritis, cancer,
cardiovasular disease and AIDS prophylaxis. The company has a broad platform
of gene delivery technologies as well as a promising body of technology for
cellular therapy.

Targeted Genetics' clinical development candidates include tgAAV-CFTR,
designed to correct the genetic defect responsible for cystic fibrosis (Phase
I completed) and a cancer therapy (Phase II), based on a tumour suppressor
shown to inhibit very lethal types of cancer. The Company has completed a
Phase I study for the treatment of HIV and preclinical studies for Hepatitis
B.

In September 2000, Targeted Genetics acquired Genovo, a rival gene therapy
company which has expanded Targeted Genetics' pipeline and provided access to
agreements with other biotechnology companies. The company has signed
collaborative agreements with Elan, Biogen, Celltech, Collateral Therapeutics,
Sangamo BioSciences, the International AIDS Vaccine Initiative and Copernicus
Gene Systems.



ValiGen B.V.

New investment in June 2000, IBT invested US $7.5 million as the co-lead
investor in transatlantic life sciences company ValiGen.

ValiGen was formed through the February 2000 merger of France-based Valigene
S.A. and USA-based Kimeragen Inc. and the subsequent acquisition of
German-based INFOGEN.

The newly formed ValiGen will combine the genomics platform under development
at the former Valigene, chimeraplasty, the unique gene correction technology
being developed at the former Kimeragen and INFOGEN's population genomics
database of over 70,000 individuals to create a unique and powerful technology
platform from which to develop and pursue commercial opportunities.

Valigen intends to apply its portfolio of gene-based technologies and products
to the discovery and commercialisation of new therapeutics, improved plants
and industrial products. The Company will also sell in vivo validated targets
and associated animal models to pharmaceutical companies, through the
integration of functional genomics, gene repair and population genomics.

Vernalis Group plc

In December 1997, IBT invested £5.5 million as a major investor in Vanguard
Medica's £25.7 million financing round. In December 1999, Vanguard Medica
acquired Cerebrus Pharmaceuticals Ltd plc, a company specialising in the
discovery and development of novel therapeutics for disabling and
life-threatening disorders of the central nervous system. Subsequently,
Vanguard Medica announced that its name would change to Vernalis Group plc.

Vernalis is building a portfolio of new drug candidates through in-licensing
and collaborative agreements. The Company is currently working on compounds in
several therapeutic areas, including migraine, hepatitis C, asthma and emesis.
It is also engaged in a number of CNS research projects, obtained through the
acquisition of Cerebrus.

Frovatriptan, Vernalis' oral treatment for acute migraine, has recently been
approved in France, the reference country for Europe. US approval requires
additional data which is expected to be submitted before the end of 2000.
Vernalis has granted marketing rights for frovatriptan to Elan for North
America and to Menarini for Europe and Central America.

Other products in Vernalis' pipeline include: VML600, a potential treatment
for Hepatitis C partnered with 3M Pharmaceuticals in Phase II; VML670,
partnered with Lilly, in Phase Ib for the prevention of emesis, and VML530, an
exciting potential oral asthma therapy in Phase I through a collaboration with
Abbott. VML588, an endothelin antagonist partnered with Roche, for the
treatment of sub-arachnoid haemorrhage and renal failure in patients
undergoing surgery, has completed Phase I trials.



The Directors of International Biotechnology Trust plc announce the unaudited
preliminary results for the year

ended 31 August 2000.


Statement of Total Return (incorporating the revenue account)

For the year ended 31 August 2000

                               For the year ended       For the year ended

                                 31 August 2000           31 August 1999
                                Revenue Capital Total     Revenue Capital Total
                                 £'000   £'000 £'000        £'000   £'000 £'000
Realised gains/(losses) on          - 108,956 108,956          - (1,749)(1,749)
investments
Incentive fee payable                 (14,926)(14,926)         -       -     -
Increase in unrealised              - 174,852 174,852          -  24,678 24,678
appreciation on investments
Dividend income                    71       -    71             -       -     -
Income from current asset       2,161         2,161           228           228
investments
Deposit income                    237       -   237             6       -     6
Underwiritng commission             -       -     -             3       -     3
                                2,469 268,882 271,351         237 22,929 23,166
Administrative expenses       (4,471)       - (4,471)      (1,781     - (1,781)
Net return (loss) before      (2,002) 268,882 266,880     (1,544) 22,929 21,385
finance costs and taxation
Interest payable                  (6)       -   (6)           (6)       -   (6)
Return/(loss) on ordinary     (2,008) 268,882 266,874     (1,550) 22,929 21,379
activities before and after
taxation
Realised reserve on lapse of        -       -     -             -   5,013 5,013
warrants
Transfer to/(from) reserves   (2,008) 268,882 266,874     (1,550) 27,942 26,392


Return/(loss) per ordinary
share
Basic                         (2.28)p 305.54p 303.26p    (1.76)p  26.06p 24.30p
Diluted                       (2.28)p 305.54p 303.26p    (1.76)p  26.06p 24.30p

                                       At 31 August 2000      At 31 August 1999
Assets                                             £'000                  £'000

Fixed asset investments                          262,038                 67,248

Current asset investments                         89,918                  2,295
Other net current liabilities                    (2,627)                  (353)

Net Assets                                       349,329                 69,190

Net asset value per share:
Basic                                            381.88p                 78.62p
Diluted                                          379.13p                 78.62p




Cash Flow Statement                              Year ended 31    Year ended 31
                                                   August 2000      August 1999

                                                         £'000            £'000
Net cash outflow from operating activities             (1,631)          (1,286)
Cash outflow from servicing of finance                     (6)             (14)
Tax recovered                                                -               50
Net cash inflow/(outflow) from financial                                (2,336)
investment                                              89,404

Net cash inflow/(outflow) before use of                 87,767          (3,586)
liquid resources and financing
Management of liquid resources                                            3,588
                                                      (87,623)

Net cash inflow from financing                               -                1
Increase in cash                                           144                3




Reconciliation of return before taxation to net cash inflow from operating
activities
                                              Year ended 31       Year ended 31
                                                August 2000         August 1999

                                                      £'000               £'000
Loss on ordinary activities before                  (2,008)             (1,550)
taxation
(Increase)/decrease in prepayments and                (492)                   6
accrued income
(Increase)/decrease in other debtors                  (150)                  15
Increase in creditors                                 1,013                 229
Interest paid                                                                14
                                                          6

Net cash outflow from operating                     (1,631)             (1,286)
activities


Analysis of the balances of cash as shown in the balance sheet
                         Year ended 31 August 2000    Year ended 31 August 1999

                                             £'000                        £'000

Balance at 1 September                          20                           17

Increase in cash                               144                            3

Balance at 31 August                                                         20
                                               164



The financial information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 31 August 2000. The financial
information for the year ended 31 August 1999 is derived from the statutory
accounts for the year which have been delivered to the Registrar of Companies.
The auditors reported on those accounts; their report was unqualified and did
not contain a statement under section 237(2) or (3) of the Companies Act 1985.
The statutory accounts for the year ended 31 August 2000 will be finalised on
the basis of the financial information presented by the Directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.


This announcement is prepared on the basis of the accounting policies as set
out in the most recently published set of annual financial statements.


This statement was approved by the Board of Directors on 23 November 2000.



The Annual Report and Accounts will be mailed to shareholders at their
registered addresses on or around 27 November 2000 and from that date copies
of the Annual Report and Accounts will be available to the public at the
Company's registered office: 31 Gresham Street, London, EC2V 7QA.

Enquiries:           Schroder Investment Management Limited


John Spedding     (0207 658 3206)

24 November 2000