Interim Results

Hygea VCT plc (formerly known as BioScience VCT plc)

Unaudited interim results for the six months to 30 June 2006

Company number 04221489


Financial summary

For the six months ended 30 June 2006


                           30 June 2006 30 June 2005 31 December 2005
                                        (restated)**
Net assets                   £5,058,000   £6,057,000       £5,679,000

Net revenue loss before
tax                           £(94,000)    £(71,000)       £(324,000)

Net asset value per share         67.2p        79.7p            74.8p

Revenue loss per share*         (1.25)p       (0.9)p           (4.3)p

Total loss per share*           (7.69)p       (3.1)p           (8.1)p



Hygea VCT plc ("Hygea VCT" or "Fund") is a venture capital trust
("VCT").  The investment manager is Octopus Investments Limited
("Octopus") The Fund was launched in October 2001 and raised over £7
million (£6.8 million net of expenses) through an offer for
subscription.  The Fund invests in unquoted and AIM-quoted healthcare
companies and aims to provide attractive long-term returns to
shareholders.

* based on the weighted average of 7,566,573 (2005: 7,596,393) shares
in issue in the period.

** Comparative figures have been extracted from the interim accounts
for the six months ended 30 June 2005 and have been restated in
accordance with UK Financial Reporting Standard 26 in respect of the
valuation of quoted investments as disclosed in note 1.  This
restatement had no material effect on the net asset value per share
at 30 June 2005.

       Chairman's statement

Change of name
As a result of the passing of a resolution at the Annual General
Meeting in April 2006, the name of the Fund was changed from
BioScience VCT plc to Hygea VCT plc.

Investment Policy
The Fund ended the period under review with a portfolio of
investments in a total of 22 companies, 12 of which were quoted on
AIM and 10 were unquoted.  As at 30 June 2006, the portfolio was 33%
invested in AIM-quoted companies, 62% in unquoted companies, and 5%
in money market securities and cash.  As the Fund is now at a point
where it has only a relatively small amount of cash, it is unlikely
that any substantial further investments will be made until we have
sold some of our existing holdings.

The Board and Octopus are taking an active role in managing the
portfolio.  This involves providing support to investee companies, as
well as working directly with them to ensure that they achieve the
progress that will be required in order for them to reach the next
stage of their development.

Investment Environment
The acquisition by large pharmaceutical companies of Cambridge
Antibody Technology and Neutec Pharmaceuticals, two of the more
successful quoted UK-based biotechnology companies, is a welcome
development which demonstrates what can be achieved in this sector by
determined management teams who are able to access sufficient capital
to execute their business plans.  However, in our view, this has not
yet triggered an overall change in the general environment that is
experienced by most bioscience companies which remains characterised
by an insufficient supply of capital.

NAV
The net asset value per share ("NAV") at 30 June 2006 was 67.2p. The
fall in the NAV in the last few months has been caused by a
combination of the decline in the value of many AIM companies during
the period of global stock market instability in May and June and a
reduction in the carrying value for one unquoted company where its
performance had been below our expectations.  Despite good progress
by many of our other unquoted holdings, we are not able to write
these valuations up at this stage under our valuation policy and the
International Private Equity and Venture Capital (IPEVC) guidelines.
As set out in the IPEVC guidelines, valuations of unquoted companies
are usually not changed for at least twelve months from the date of
investment unless the investee company has performed significantly
behind plan (in which case the investment is written down) or there
has been a follow-on fundraising for the company at a higher price.
These guidelines ensure prudence, and correctly do not allow advanced
discussions around licensing or sale to be reflected in the
valuations for the unquoted investee companies.  We remain optimistic
about the potential to generate significant shareholder value from
our portfolio of investments.

As described in the 2005 annual report, we are now required to
calculate our financial performance using certain new Financial
Reporting Standards.  These changes in accounting standards, which
have been implemented as part of the process of bringing UK
accounting practices into line with international standards, mean
that we are now required to value our AIM holdings at bid prices,
rather than mid prices.  This has a particularly significant impact
on Hygea VCT, given the number of holdings that we have in small
AIM-quoted companies where the difference between the bid and mid
prices can be substantial. The effect of these changes means that the
valuation of the portfolio, if valued under the old Financial
Reporting Standards, would have been £63,000 higher (equivalent to
approximately 1p per share).

As a result of the investment activity in early 2006, the Fund had
reduced the assets held in the form of cash and money market
securities to just £294,000 at 30 June 2006.  Subsequent to that
date, liquid funds were increased through the sale of the holding in
Abcam plc for £71,000, a 60% profit on cost.  As a result of the low
level of cash holdings, the income that is generated by the Fund is
likely to remain low.

The Board has taken a number of steps to ensure that our cost base is
compatible with the Fund's small size and, despite the impact on the
Fund of a number of unavoidable fixed costs that are associated with
the Fund's status as a quoted company, shareholders will note that
the Fund's overall running costs during the first six months of 2006,
which amounted to £135,000, were 21% lower than in the equivalent
period in 2005.  As the running costs in the first six months of 2006
included several non-recurring items, we anticipate making further
progress in reducing the running costs in the second half of the
year.

Portfolio Review
Since the end of 2005, we have made three new investments.  We
invested £350,000 as part of a fundraising of £5.2 million for Wound
Solutions Ltd.  The company, which is unquoted at present, is
developing a product that has potential applications in treating
venous leg ulcers and diabetic foot ulcers.  These ulcers are
unpleasant wounds that are often difficult to treat using existing
techniques.  Over the past twenty years, there have been relatively
few improvements in the standard of care for most patients suffering
from ulcers.  The market opportunity for Wound Solutions is
substantial as 1.1 million people in the US and Europe suffer from
diabetic foot ulcers and 1.4 million people suffer from venous
leg ulcers.  A pivotal clinical trial will be conducted by the
company in the coming months to generate the necessary data to apply
for approval to launch the product.

We also invested £250,000 in Armstrong Healthcare Limited, an
unquoted company that has developed specialist robots for use in
various surgical procedures.   In addition, we invested approximately
£80,000 in Plethora Solutions Holdings plc, an AIM-quoted company
that is focused on the development of products for the treatment of
urological conditions.


During the period under review, we also increased the size of our
investment in two existing investee companies.  Hallmarq Veterinary
Imaging Ltd, the Guildford-based MRI manufacturer in which we had
invested £500,000 in August 2005, raised a further amount of capital,
to which we contributed £135,000.  We also invested a small
additional amount in BBI Holdings plc, the AIM-quoted diagnostics
company, at the time of the company's acquisition of Alchemy
Laboratories Ltd, a Scottish rival.

No disposals were made during the period.  As mentioned above, since
the end of the period we have sold our holding in Abcam plc.

Share Price
The Board is aware that investors in VCTs sometimes need to sell
their shares.  As 'second hand' VCT shares do not qualify for upfront
income tax relief, there tend to be few purchasers of these shares.
For this reason the sale of even a small number of VCT shares can
force the share price to a level that is well below the NAV.
Although the Board sees the use of share buy backs as a mechanism of
last resort to close the gap between the share price and the
underlying NAV, our preference is to focus on generating real value
from the investee companies in order to stimulate interest in the
shares.  This stance is taken against the background of the stage of
development of the portfolio and the limited cash retained by the
Fund.

VCT Qualifying Status
PricewaterhouseCoopers LLP continues to provide the Board with advice
on the ongoing compliance with HM Revenue & Customs rules and
regulations concerning VCTs.  The Board has been advised that Hygea
VCT is in compliance with the conditions laid down by HM Revenue &
Customs for maintaining approval as a VCT.

Outlook
Following the completion of the investment phase of the Fund, we are
now working with our investee companies to maximise the generation of
value from our existing portfolio of investments - we continue to
believe that the portfolio will deliver an attractive overall return
to shareholders.

We are in the final stage of developing a new and informative website
for Hygea VCT to enable shareholders to access information on the
Fund and investee companies.

We look forward to updating you on the progress of our portfolio of
investments in due course.

James Otter
Chairman
28 September 2006
The unaudited interim financial statements for the period from 1
January 2006 to 30 June 2006 are set out below.

Income Statement

                                        Six months ended 30 June 2006
                                          Revenue   Capital     Total
                                            £'000     £'000     £'000

Unrealised loss on investments                  -     (456)     (456)

Income                                          9         -         9

Investment management fees                   (10)      (31)      (41)
Other expenses                               (93)         -      (93)

Return on ordinary activities before
tax                                          (94)     (487)     (581)

Tax                                             -         -         -

Loss on ordinary activities after tax        (94)     (487)     (581)
Loss per share                            (1.25)p   (6.44)p   (7.69)p



* The total column of this statement is the profit and loss account
  of the company.
* All revenue and capital items in the above statement derive from
  continuing operations
* The accompanying notes are an integral part of the financial
  statements.

Reconciliation of movements in shareholders' funds


                                      Six months ended 30 June 2006
                                                             £000's
Shareholders' funds at start of year                          5,679
Loss on ordinary activities after tax                         (581)
Cost of share buyback                                          (40)
Shareholders' funds at end of year                            5,058



                      Six months ended 30 June Year ended 31 December
                                          2005                   2005
                       Revenue  Capital  Total Revenue Capital  Total
                         £'000    £'000  £'000   £'000   £'000  £'000

Realised gain on             -        -      -       -       8      8
investments

Unrealised loss on                 (88)   (88)       -   (123)  (123)
investments

Income                      20        -     20      34       -     34

Investment management     (26)     (79)  (105)    (59)   (177)  (236)
fees
Other expenses            (65)        -   (65)   (299)       -  (299)

Loss on ordinary          (71)    (167)  (238)   (324)   (292)  (616)
activities before tax

Tax                          -        -      -       -       -      -

Loss on ordinary          (71)    (167)  (238)   (324)   (292)  (616)
activities after tax
Loss per share          (0.9)p   (2.2)p (3.1)p  (4.3)p  (3.8)p (8.1)p




                                       Six months ended Year ended 31
                                           30 June 2005 December 2005
                                                 £000's        £000's
Shareholders' funds at start of year              6,299         6,299
Mid price to bid price valuation                    (4)           (4)
movement
Restated shareholders' funds at start             6,295         6,295
of year
Loss on ordinary activities after tax             (238)         (616)
Shareholders' funds at end of year                6,057         5,679



 Balance sheet as at 30 June 2006


                                                30 June   31 December
                                 30 June 2006      2005          2005
                                        £'000     £'000         £'000

Fixed asset investments                 4,800     2,118         4,428
Current assets:
Debtors                                     9        10            13
Cash at Bank                              294     3,969         1,369
                                          303     3,979         1,382
Creditors: amounts falling due
within one year                          (45)      (40)         (131)
Net current assets                        258     3,939         1,251
Net assets                              5,058     6,057         5,679

Capital and Reserves
Share capital                           3,765     3,798         3,798
Share premium                           1,722     3,422         1,722
Special distributable reserve           1,660         -         1,700
Capital redemption reserve                 38         5             5
Capital reserve - realised              (565)     (444)         (534)
- unrealised                          (1,136)     (645)         (680)
Revenue reserve                         (426)      (79)         (332)
Total equity shareholders' funds        5,058     6,057         5,679
Net asset value per share               67.2p     79.7p         74.8p
































Cash flow statement     6 Months to      6 Months to     12 Months to
                       30 June 2006     30 June 2005 31 December 2005
                      £'000   £'000    £'000   £'000    £'000   £'000

Net cash
(outflow)/inflow from
operating activities          (207)               49            (213)

Financial investment
:
Purchase of
investments           (828)            (823)          (3,183)
Sale of investments       -                -               23
Net cash outflow from
financial investment          (828)            (823)          (3,160)

Net cash inflow from
management of liquid
resources                         -            (425)                -

Net cash outflow
before financing            (1,035)          (1,199)          (3,373)

Financing:
Purchase of own
shares                 (40)                -                -

Total financing                (40)                -                -

Decrease in cash
resources                   (1,075)       (1,199)             (3,373)





Reconciliation of operating profit to net cash
outflow from operating activities                         6 Months to
                                                         30 June 2006
                                                                £'000
Loss on ordinary activities before Tax                           (94)
Decrease in debtors                                                 4
Decrease in creditors                                            (86)
Management fees charged to capital account                       (31)
Net cash outflow from operating activities                      (207)





Investment portfolio as at 30 June 2006
                                         Cost Valuation
                                        £'000     £'000
Ten largest investments
Hallmarq Veterinary Imaging Limited       635       635
Scancell Limited                          725       600
NeutraHealth plc                          360       471
Wound Solutions Limited                   350       350
Evolutec Group plc                        347       315
Immunobiology Limited                     300       300
DxS Limited                               263       263
BioAnaLab Limited                         250       250
Armstrong Healthcare Limited              250       250
Insense Limited                           148       181
                                        3,628     3,615

Other AIM investments                   1,836       926
Other unquoted investments                472       259

                                        5,936     4,800



NOTES
1.       The Fund is required to comply with a number of new UK
Financial Reporting Standards (FRSs) in presenting its financial
statements for the year ending 31 December 2006.  These standards
have been introduced as part of the process of converging UK
standards with International Financial Reporting Standards (IFRS).
The financial information provided in the unaudited interim results
for the six months ended 30 June 2006 has been prepared on a
consistent basis with the accounting policies as disclosed in the
Fund's annual report and accounts for the period ended 31 December
2005 except for such changes as are required by the new FRSs.  These
changes arise from "FRS26 - Financial Instruments: Measurement".
The nature and effect of these changes for the period ended 30 June
2006 are explained below.
Under FRS26, quoted investments are valued at bid price rather than
mid price.  The effect of this is to decrease the valuations at which
such investments are stated in the balance sheet and to decrease the
unrealised gains on investments shown in the capital column of the
statement of total return.  This change resulted in reductions of
£4,000 in the valuation of fixed asset investments at 30 June 2005
and a corresponding decrease in the unrealised capital reserve at
those dates.
The unaudited interim results for the six months ended 30 June 2006
and the period ended 30 June 2005 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.
2.       The calculation of the revenue and capital loss per share is
based on the loss on ordinary activities after tax for the period and
on 7,566,573 (30 June 2005 - 7,596,393) ordinary shares, being the
weighted average number of shares in issue during the period from 1
January 2006 to 30 June 2006.
3.       The number of shares in issue at 30 June 2006 amounted to
7,530,191 (30 June 2005 - 7,596,393).
4.       The number of shares bought back in the period to 30 June
2006 amounted to 66,202 and were purchased at an average price of 60p
per share.
5.       Copies of the interim report are being sent to all
shareholders.  Further copies are available free of charge from
Octopus Investments Ltd at 8 Angel Court, London EC2R 7HP.

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