Interim Results

BioScience VCT plc 26 September 2002 26 SEPTEMBER 2002 BIOSCIENCE VCT PLC UNAUDITED INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2002 Financial highlights (figures as at 30 June 2002): • Net assets £6.66 million • Net asset value per share 95.0p • Revenue return after tax £26,000 profit • Revenue return per share* 0.6p profit • Total return per share* 0.0p *Based on weighted average of 4,424,904 shares in issue during the period For further information, please contact: Chris Hulatt Octopus Asset Management 020 7255 7962 Chairman's Statement: I am delighted to present my first report to shareholders since BioScience VCT's public share issue was launched in October 2001. The issue, which closed on 26 July 2002, raised a total of £7.1 million before expenses. I would like to take this opportunity to welcome all of our shareholders and thank them for their support. The unaudited interim financial statements cover the period from 1 January 2002 to 30 June 2002, although the company's listing on the London Stock Exchange became effective on 19 April 2002. The financial statements include the proceeds of shares allotted up to and including 30 June 2002, a total of £6.66 million net of issue expenses. Investments During the period, BioScience VCT's cash was held on deposit in the money markets. As a result of the turbulent market conditions, we have taken a cautious approach to making investments and have not yet completed any transactions. We believe that this approach has been vindicated by the general fall in valuations of both quoted and unquoted bioscience companies over the last few months. For example, in the period from the launch of BioScience VCT until the end of June, the FTSE Pharmaceutical and Biotechnology index fell by 24%. Our team has assessed a considerable number of investment opportunities in unquoted companies over the past few months. Although we intend to retain a cautious approach, we anticipate that we will make a small number of investments into some of these companies over the next six months. Our emphasis will be on companies that combine a strong scientific backdrop with a high quality management team. When looking at quoted companies, we place a heavy emphasis on the company's financial stability. It is important that companies are able to generate revenue in the near-term, either through product sales or through licensing out products. Our management team has identified a number of quoted companies that have a strong pipeline of products, a high level of cash on the balance sheet, and which are trading at valuations that we believe do not reflect the companies' prospects. We may establish small positions in several of these companies in the near future. With current cash resources of approximately £6.75m available for investment following the share issue, our primary target is to invest at least 70% of the total in VCT qualifying investments by 31 December 2004. Net asset value BioScience VCT had an initial net asset value (NAV) of 95.0p per share. As at 30 June 2002, I am pleased to be able to report that the unaudited NAV had remained at a level of 95.0p as interest income was equal to expenses over the period. Revenue and dividend The statement of total return for the period to 30 June 2002 includes the investment income derived from the proceeds of share allotments, which took place on various dates from January onwards, and consequently does not reflect a normal half year's ongoing activities. After deducting expenses, the revenue profit for the period before tax was £26,000 - equivalent to a revenue profit per share of 0.6p (based on the weighted average of 4,424,904 shares in issue during the period). In line with industry practice, 75% of the management fee is charged to capital giving rise to a negative capital return of (0.6p) per share for the period As stated in the prospectus, it is intended that the company's first dividend will be paid in April 2003 as a final dividend in respect of the year ending 31 December 2002. The Board will review the level of the dividend at the year-end, although, given the sustained period of very low interest rates, it is likely to be less than anticipated in the prospectus. However, please note that the information contained in this paragraph is not intended to be a dividend or profit forecast. Prospects The Board is keen to increase the size of the fund by raising further capital as market conditions allow. The Board believes that this will permit a larger average investment size and a broader spread of investments. It will also spread BioScience VCT's fixed costs across a larger base, which should improve both the return and the long-term liquidity of the shares. The long-term prospects for the bioscience sector remain very exciting. The growth in expenditure on the products of bioscience companies is driven largely by the ageing population and a greater demand for higher quality healthcare. The UK remains one of the world's leaders in the bioscience sector and we believe that the general quality of investment opportunities is high. Over the next couple of years, we intend to build a diversified portfolio of investments in this attractive sector. Our over-riding aim is to preserve and, over time, grow the value of your investment in BioScience VCT through an investment approach that involves a rigorous assessment of the underlying conditions in the bioscience sector and the quality of the science and management of specific investment opportunities. Dr P A Nicholson Chairman, BioScience VCT Plc The unaudited interim financial statements for the period from 1 January 2002 to 30 June 2002 are set out below. STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT) for the period ended 30 June 2002 Revenue Capital Total £000 £000 £000 Gains on investments - - - Income 70 - 70 Investment management fee (9) (28) (37) Other expenses (35) - (35) ------ ------ ------ Return on ordinary activities before tax 26 (28) (2) Tax on ordinary activities - - - ------ ------ ------ Return on ordinary activities after tax 26 (28) (2) Dividends - - - ------ ------ ------ Transfer to reserves 26 (28) (2) ------ ------ ------ Return per share 0.6p (0.6)p 0.0p BALANCE SHEET 30 June 2002 31 December 2001 £000 £000 Fixed asset investments - - Net current assets 6,664 50 ------- ------- Net assets 6,664 - ------- ------- Called-up equity share capital 3,508 50 Share premium 3,158 - Capital reserve - realised (28) - - unrealised - - - Revenue reserve 26 - ------- ------- Total equity shareholders' funds 6,664 50 ------- ------- Net asset value per share 95.0p CASH FLOW STATEMENT for the period ended 30 June 2002 £000 £000 Reconciliation of net revenue before taxation to net cash flow from operating activities Net revenue before taxation 26 Increase in debtors - Increase in creditors 29 Management fees charged to capital reserve (28) ------ Net cash inflow from operating activities 28 ------ Cash flow statement Net cash inflow from operating activities 28 Taxation: Corporation tax paid - Financial investment: Purchase of investments - Sale of investments - ------ Net cash outflow from financial investment - Equity dividends paid - ------ Net cash inflow before financing 28 Financing: Issue of ordinary shares 6,940 Share issue expenses (274) ------ Net cash inflow from financing 6,666 ------ Increase in cash at bank 6,694 ------ Analysis of cash balance At start of period - Net cash inflow for the period 6,694 ------ At end of period 6,694 ------ NOTES 1. The unaudited financial statements for the period ended 30 June 2002 do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985 and have not been delivered to the Registrar of Companies. The Company was incorporated on 22 May 2001 and commenced operations following the allotment of shares on the achievement of its minimum subscription on 21 January 2002. Dormant accounts were prepared for the period ended 31 December 2001. The comparative figures for the year ended 31 December 2001 do not constitute statutory accounts within the meaning of S.240 of the Companies Act 1995, but they have been derived from the audited financial statements for that year, which have been filed with the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. 2. The calculation of the revenue and capital return per share is based on the return on ordinary activities after tax for the period and on 4,424,904 ordinary shares, being the weighted average number of shares in issue during the period from 1 January 2002 to 30 June 2002. 3. Called up equity share capital at 31 December 2001 represented 50,000 redeemable preference shares which were redeemed on 12 June 2002. 4. A copy of the interim report is expected to be posted to shareholders on 27 September 2002 and will be available to the public at the registered office of the company at Kett House, 1 Station Road, Cambridge, CB1 2JY. ENDS This information is provided by RNS The company news service from the London Stock Exchange

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