BTG Regulatory News (BTG)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

London, 19 November 2010

RECOMMENDED ACQUISITION

By

BTG PLC ("BTG")

Of

BIOCOMPATIBLES INTERNATIONAL PLC ("BIOCOMPATIBLES")

Summary

The Boards of BTG and Biocompatibles are pleased to announce that they have reached agreement on the terms of a recommended proposal whereby BTG will acquire the entire issued and to be issued share capital of Biocompatibles.

Both Boards believe that the transaction will create a fast-growing, financially stronger, international specialist healthcare business.

The BTG Board views the acquisition of Biocompatibles as an excellent opportunity to combine Biocompatibles' fast growing specialist products with BTG's existing commercial infrastructure. The enhanced resources of the Enlarged Group will allow accelerated investment in Biocompatibles' products and development pipeline. The Biocompatibles Board views the acquisition by BTG as an excellent opportunity to exploit further the potential of the strong platform which has been built to date. Biocompatibles Shareholders will benefit from a successful company with a broad portfolio of products (both directly marketed and partnered) and the significant upside potential in the combined development pipeline.

Defined terms used in this announcement have the meanings set out in Appendix IV to this announcement.

Summary terms of the Acquisition

·; Biocompatibles Shareholders will receive 1.6733 New BTG Shares and 10 pence in cash for each Biocompatibles share held, the cash element being the "Partial Cash Consideration".

·; Based on the Closing Price of a BTG Share of 251 pence on 18 November, 2010 (being the last Business Day prior to the date of this announcement), this values each Biocompatibles Share at 430 pence (and the Biocompatibles Fully Diluted Share Capital at approximately £177.2 million).

·; Based on such 430 pence per Biocompatibles Share value, the Acquisition terms represent a premium of approximately:

o 27.8 per cent. to the Closing Price of 336.5 pence per Biocompatibles Share on 18 November, 2010

(being the last Business Day prior to the date of this announcement);

o 39.6 per cent. to the Closing Price of 308.0 pence per Biocompatibles Share on 17 September 2010

(being the last Business Day prior to the day of the announcement by Biocompatibles regarding a

preliminary approach having been made to Biocompatibles); and

o 60.6 per cent. to the price of 267.8 pence per Biocompatibles Share (being the average Closing Price 

for the three-month period ending on 17 September 2010.

·; As an alternative to the 10 pence cash element of the consideration, Biocompatibles Shareholders may elect to receive an entitlement to a contingent right to payment of the Sterling equivalent of €0.56(1) per Biocompatibles Share in cash by participating in value that may potentially be achieved from part of Biocompatibles' programme to develop the GLP-1 Compound, which it has partnered with AstraZeneca (referred to in this announcement as the "Partial CVN Alternative"). 

·; BTG (and, in the case of the Biocompatibles Directors, Biocompatibles) has received irrevocable undertakings to vote in favour of the Acquisition from certain Biocompatibles Shareholders and each of the Biocompatibles Directors amounting, in aggregate, to 20,932,379 Biocompatibles Shares, representing approximately 53.19 per cent. of Biocompatibles' existing issued share capital as of 18 November 2010, being the last Business Day prior to this announcement. BTG has also received a non-binding letter of intent to vote in favour of the Acquisition from a Biocompatibles Shareholder in respect of 4,129,391 Biocompatibles Shares, representing approximately 10.49 per cent. of Biocompatibles' existing issued share capital as of 18 November 2010, being the last Business Day prior to this announcement.

·; BTG (and, in the case of the Biocompatibles Directors, Biocompatibles) has received irrevocable undertakings to vote in favour of the BTG Resolution from certain BTG Shareholders and those BTG Directors who hold shares in BTG, amounting to, in aggregate, 106,132,802 BTG Shares, representing approximately 41.14 per cent. of the existing issued share capital of BTG as at 18 November 2010, being the last Business Day prior to this announcement.

·; Rationale for the Acquisition

·; The Acquisition is consistent with BTG's stated strategy of acquiring niche, high-value, late stage products targeting the specialist hospital market.

·; Biocompatibles provides BTG with a platform in interventional medicine with interventional oncology bead products that are high margin, have demonstrated strong revenue growth, complement BTG's acute care franchise and have significant additional growth potential in certain Asian markets. Biocompatibles is a market leader in the use of beads for the treatment of cancer.

·; The Enlarged Group will have the improved financial strength and other enhanced resources to allow it to increase investment in the marketing of Biocompatibles' products and accelerate the development of Biocompatibles' specialist oncology products. In particular, the BTG Directors intend to undertake registration trials in respect of Biocompatibles' embolising beads and drug-eluting beads to increase the products' approved indications and the territories in which they can be marketed.

·; The focus of Biocompatibles' marketed products on hospital specialists will provide the Enlarged Group with the opportunity to leverage an enhanced US commercial infrastructure.

·; The combined infrastructure will also provide opportunities for incremental sales of certain of BTG's products and support future product launches.

·; The Enlarged Group will have access to additional potential value drivers in Biocompatibles' BrachySciences and CellMed businesses and attractive upside potential in the form of the GLP-1 Compound programme partnered with AstraZeneca.

The Enlarged Group will enjoy:

·; substantial pro forma revenues of £125.1 million(2) with material further growth potential from sales of its own products and from royalties from sales of licensed products;

·; significant potential future milestone revenues and royalties from programmes in sepsis, diabetes, cancer and multiple sclerosis (from existing partnerships with AstraZeneca, Tolerx/GSK, Genzyme and Johnson & Johnson);

·; a broader pipeline of programmes being developed in-house for both direct sales and potential partnering; and

·; enlarged pro forma cash balances of £97.3 million(3).

The Acquisition is expected to result in:(4)

·; earnings enhancement for BTG in the twelve month period to 31 March 2012, the first full year following completion of the Acquisition(5);

·; a mid-teens percentage return on investment for BTG in the third full financial year following completion of the Acquisition(6); and

·; cost savings of approximately £3 million per annum by reducing duplicated head office and administrative costs.

Additional Information

It is proposed that the Acquisition will be implemented by way of a scheme of arrangement under Part 26 of the Companies Act 2006 although BTG reserves the right, with the consent of the Panel, to seek to implement the Acquisition by way of a Takeover Offer.

Based on the Biocompatibles Fully Diluted Share Capital, the maximum number of New BTG Shares to be issued in connection with the Acquisition will be 68,937,550. Assuming no further BTG Shares are issued in the period between the date of this announcement and the Effective Date, the issued share capital of BTG will, immediately following the Effective Date, comprise up to 326,921,695 BTG Shares, approximately 21.1 per cent. of which will be held by former Biocompatibles Shareholders and approximately 78.9 per cent. of which will be held by existing BTG Shareholders.(7) 

The Acquisition will be conditional on, amongst other things, the approval of BTG Shareholders and the approval of Biocompatibles Shareholders.

The Biocompatibles Directors, who have been so advised by Piper Jaffray, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Piper Jaffray has taken into account the commercial assessments of the Biocompatibles Directors. The Biocompatibles Directors unanimously intend to recommend that Biocompatibles Shareholders vote in favour of the Scheme at the Court Meeting and in favour of the Biocompatibles Resolutions to be proposed at the Biocompatibles GM.

Partial CVN Alternative

The Biocompatibles Directors make no recommendation as to whether Biocompatibles Shareholders should elect for the Partial CVN Alternative. The Contingent Value Notes will enable Biocompatibles Shareholders who elect for the Partial CVN Alternative to participate in value that could potentially be achieved from part of Biocompatibles' programme to develop the GLP-1 Compound (partnered with AstraZeneca), as described in more detail in paragraph 10 below. This could ultimately lead to a cash payment of the Sterling equivalent of €0.56 per Biocompatibles Share for Biocompatibles Shareholders who elect for the Partial CVN Alternative. However, in reaching a decision to elect for the Partial CVN Alternative, Biocompatibles Shareholders should take into account, among other things, the following:

·; the risk that the Contingency may not occur;

·; the timing of the payment, if any, in connection with the Contingent Value Notes is uncertain. It will be dependent on the timing of the Contingency. This means that any cash payable to Biocompatibles Shareholders electing for the Partial CVN Alternative may not ultimately be receivable until 2013, if it is received at all. In contrast, payment of the Partial Cash Consideration would be made to Biocompatibles Shareholders who do not elect to receive the Partial CVN Alternative, within 14 days of the Effective Date;

·; if AstraZeneca does not exercise the AZ Option on the agreed terms and seeks to re-negotiate the terms relating to the AZ Option, the Enlarged Group may be unwilling or unable to reach a new agreement with AstraZeneca, or may reach an agreement with a third party regarding the GLP-1 Compound. In those circumstances, the Contingency would not be satisfied and no payment would be made by BTG in respect of the Contingent Value Notes;

·; any obligation of BTG to honour the Partial CVN Alternative following the occurrence of any Contingency, will constitute an unsecured obligation of BTG. In the event that BTG defaults in honouring its payment obligations pursuant to the Partial CVN Alternative due to the insolvency of BTG or otherwise, Biocompatibles Shareholders who have validly elected for the Partial CVN Alternative will rank only as unsecured creditors of BTG; and

·; tax may be payable by UK tax-paying Biocompatibles Shareholders who elect for the Partial CVN Alternative before the Contingency occurs or before any payment in respect of the Contingency is received. If, following payment of tax, the Contingency does not occur, such Biocompatibles Shareholders should be able to reclaim tax paid although there may be substantial delays between the payment of the tax and receipt of any repayment from HM Revenue & Customs. Further details on the taxation implications of the Acquisition for Biocompatibles Shareholders will be set out in the Scheme Document.

Biocompatibles Shareholders are strongly recommended to take their own independent advice having regard to their own particular circumstances and financial objectives before deciding whether to elect for the Partial CVN Alternative, particularly if they are in any doubt as to the potential tax consequences of electing for the Partial CVN Alternative.

BTG GM Recommendation

The BTG Directors unanimously intend to recommend that the BTG Shareholders vote in favour of the BTG Resolutions at the BTG GM.

The Scheme Document setting out further details of the Acquisition and the procedures to be followed in connection with the implementation of the Scheme will be posted to Biocompatibles Shareholders as soon as reasonably practicable. The Acquisition is expected to be completed by early February 2011.

Dr John Brown, Chairman of BTG, commented:

"We believe that this transaction accelerates the strategic transformation of BTG and creates a financially stronger specialist healthcare business with improved growth prospects. With a broader pipeline for mid term growth, this deal expands the platform from which to develop a sustainably profitable specialist healthcare company." 

Gerry Brown, Chairman of Biocompatibles, commented:

"BTG is a successful international specialist pharmaceuticals company with attractive prospects for growth, profitability and value creation. These prospects will be enhanced by its enlargement with the acquisition of Biocompatibles. The terms of the Acquisition fairly reflect the current and potential value of Biocompatibles' products and pipeline and give our shareholders the opportunity to participate in future value creation."

This summary should be read in conjunction with and is subject to, the full text of this announcement and the Appendices. The Acquisition will be subject to the Conditions set out in Appendix I to this announcement and to the further terms to be set out in the Scheme Document. Appendix II sets out the bases and sources of information from which the financial calculations used in this announcement have been derived. Appendix III contains particulars of the irrevocable undertakings received by BTG (and, in certain cases, Biocompatibles). Appendix IV contains the definitions of terms used in this announcement (including this summary).

An analyst/investor briefing will be held today at 09.30 a.m. at the offices of Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB. There will be a live audio webcast accessible at the BTG website: www.btgplc.com. For further details please contact Mo Noonan on +44 (0)20 7269 7116.

Enquiries

Rothschild, which is authorised and regulated in the UK by the FSA, is acting as sole financial adviser and joint sponsor to BTG in connection with the Acquisition and no one else and will not be responsible to anyone other than BTG for providing the protections afforded to clients of Rothschild nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement.

J.P. Morgan Cazenove, which is authorised and regulated in the UK by the FSA, is acting as joint sponsor and corporate broker to BTG in connection with the Acquisition and no one else and will not be responsible to any other person for providing the protections afforded to clients of J.P. Morgan Cazenove nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement.

Piper Jaffray, which is authorised and regulated in the UK by the FSA, is acting as financial adviser to Biocompatibles in connection with the Acquisition and no one else and will not be responsible to anyone other than Biocompatibles for providing the protections afforded to clients of Piper Jaffray nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement.

Nomura Code, which is authorised and regulated in the UK by the FSA, is acting as corporate broker to Biocompatibles in connection with the Acquisition and no one else and will not be responsible to anyone other than Biocompatibles for providing the protections afforded to clients of Nomura Code nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement.

This announcement is not intended to, and does not, constitute or form part of an offer or invitation to sell or subscribe for or acquire or exchange securities in BTG or Biocompatibles or a solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. The full terms and conditions of the Scheme will be set out in the Scheme Document. This announcement does not constitute a prospectus or a prospectus equivalent document. Biocompatibles Shareholders are advised to read carefully the formal documentation in relation to the Acquisition, once it is dispatched. In deciding whether or not to approve the Scheme, Biocompatibles Shareholders must rely solely on the terms and conditions of the Acquisition and the information contained or referenced, and the procedures described, in the Scheme Document.

The release, publication or distribution of this announcement in jurisdictions other than the UK and the implications of the Scheme for Biocompatibles Shareholders outside the UK may be affected by the laws of the relevant jurisdictions. Biocompatibles Shareholders outside the UK should inform themselves about and observe any applicable requirements. It is the responsibility of each Biocompatibles Shareholder to satisfy himself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required to be observed and the payment of any issue, transfer or other taxes in such jurisdictions. This announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK.

Neither the New BTG Shares nor the Contingent Value Notes have been, nor will they be, registered under the Securities Act or under the securities laws of any jurisdiction of the United States and will not be listed on any stock exchange in the United States. Neither the US Securities and Exchange Commission nor any US state securities commission has approved or disapproved of the New BTG Shares or the Contingent Value Notes, or determined if this announcement is accurate or complete. Any representation to the contrary is a criminal offence under US law. Further, the relevant clearances have not been, and will not be, obtained from the securities commission of any province of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance and neither the New BTG Shares nor the Contingent Value Notes have been, and nor will they be, registered under or offered in compliance with applicable securities laws of any state, province, territory or jurisdiction of Canada, Australia or Japan. Accordingly, neither the New BTG Shares nor the Contingent Value Notes may (unless an exemption under relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction, or to, or for the account or benefit of, a person located in the United States, Canada, Australia or Japan.

It is expected that the New BTG Shares will be issued in reliance upon the exemption from the registration requirements of the Securities Act provided by Section 3(a)(10) thereof. Under applicable US securities laws, Biocompatibles Shareholders who are or will be deemed to be 'affiliates' of Biocompatibles or BTG prior to, or of the Enlarged Group after, the Effective Date will be subject to certain transfer restrictions relating to the New BTG Shares received in connection with the Scheme.

Cautionary note on forward looking statements

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of BTG, Biocompatibles and the Enlarged Group and certain plans and objectives of the BTG Directors and the Biocompatibles Directors with respect thereto. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the BTG Directors and the Biocompatibles Directors in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although the BTG Directors and the Biocompatibles Directors believe that the expectations reflected in such forward-looking statements are reasonable, neither BTG nor Biocompatibles can give any assurance that such expectations will prove to have been correct and assume no obligation to update or correct the information contained in this announcement (except to the extent legally required) and BTG and Biocompatibles therefore caution you not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement.

Nothing in this announcement is intended to be a profit forecast.

Dealing Disclosure Requirements

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

In accordance with Rule 2.10 of the Code, BTG confirms that it has 257,984,145 shares of 10 pence each in issue and admitted to trading on the London Stock Exchange's main market for listed securities under the UK ISIN Code GB0001001592.

In accordance with Rule 19.11 of the Code, a copy of this announcement will be published, subject to certain restrictions relating to persons resident in restricted jurisdictions, on BTG's website at www.btgplc.com and Biocompatibles' website at www.biocompatibles.com by no later than 12:00 noon (London time) on 22 November 2010. For the avoidance of doubt, the contents of these websites are not incorporated into and do not form part of this announcement.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

London, 19 November 2010

RECOMMENDED ACQUISITION

By

BTG PLC ("BTG")

Of

BIOCOMPATIBLES INTERNATIONAL PLC ("BIOCOMPATIBLES")

1. Introduction

The Boards of BTG and Biocompatibles are pleased to announce that they have reached agreement on the terms of a proposal whereby BTG will acquire the entire issued and to be issued share capital of Biocompatibles. It is proposed that the Acquisition will be implemented by way of a scheme of arrangement under Part 26 of the Companies Act 2006.

The BTG Board views the acquisition of Biocompatibles as an excellent opportunity to combine Biocompatibles' fast growing, high value, late stage specialist products with BTG's own portfolio of specialist products and its existing development, regulatory and US commercial infrastructure. The enhanced resources of the Enlarged Group will allow accelerated investment in Biocompatibles' products and development pipeline. The Biocompatibles Board views the acquisition by BTG as an excellent opportunity to participate in a successful business and to exploit further the potential of the strong platform which has been built to date. Biocompatibles shareholders will benefit from a successful company with a broad portfolio of products (both directly marketed and partnered) and the significant upside potential in the combined development pipeline.

Biocompatibles provides BTG with a platform in interventional medicine with interventional oncology bead products that are high margin, have demonstrated strong revenue growth, complement BTG's acute care franchise and that have significant additional growth potential in certain Asian markets. Biocompatibles is a market leader in the use of beads for the treatment of cancer. The Enlarged Group will have the improved financial strength and other enhanced resources to allow it to increase investment in the marketing of Biocompatibles' products and accelerate the development of Biocompatibles' specialist oncology products. In particular, the BTG Directors intend to undertake registration trials in respect of Biocompatibles' embolising beads and drug-eluting beads to increase the products' approved indications and the territories in which they can be marketed.

The focus of Biocompatibles' marketed products on hospital specialists will provide the Enlarged Group with the opportunity to leverage an enhanced US commercial infrastructure. The combined infrastructure will also provide opportunities for incremental sales of BTG's products and support future product launches.

The Enlarged Group will enjoy substantial existing revenues with material further growth potential from sales of its own products and royalties from the sale of licensed products, as well as significant potential future milestone revenues and royalties should programmes (including in sepsis, diabetes, cancer and multiple sclerosis) which are already partnered achieve development and commercial milestones. The Enlarged Group will have a broader pipeline of programmes being developed in-house for both direct sales and potential partnering. The Enlarged Group will have access to additional potential value drivers in Biocompatibles' BrachySciences and CellMed businesses and attractive upside potential in the form of the GLP-1 programme partnered with AstraZeneca.

The Acquisition is expected to be earnings enhancing for BTG in the twelve month period to 31 March 2012, the first full year following completion of the Acquisition. Furthermore, the Acquisition is expected to provide BTG with a mid-teens percentage return on investment in the third full financial year following completion of the Acquisition(8). Reducing duplicated head office and administrative costs is expected to yield cost savings of approximately £3 million per annum.(9)

2 Terms of the Acquisition

The Scheme will involve the acquisition by BTG of the entire issued and to be issued share capital of Biocompatibles and is to be effected by way of a scheme of arrangement between Biocompatibles and the Scheme Shareholders under Part 26 of the Companies Act. Under the terms of the Scheme, which will be subject to the satisfaction or (where appropriate) waiver of the Conditions set out in Appendix I and to the further terms to be set out in the Scheme Document, Scheme Shareholders who are on the register of members at the Scheme Record Time will receive:

for each Biocompatibles Share 1.6733 New BTG Shares and 10 pence in cash

Based on the Closing Price of a BTG Share of 251 pence on 18 November, 2010 (being the last Business Day prior to the date of this announcement), this values each Biocompatibles Share at 430 pence (and the Biocompatibles Fully Diluted Share Capital at approximately £177.2 million).

Based on such 430 pence per Biocompatibles Share value, the Acquisition terms represent a premium of approximately:

·; 27.8 per cent. to the Closing Price of 336.5 pence per Biocompatibles Share on 18 November, 2010 (being the last Business Day prior to the date of this announcement);

·; 39.6 per cent. to the Closing Price of 308.0 pence per Biocompatibles Share on 17 September 2010 (being the last Business Day prior to the announcement by Biocompatibles regarding a preliminary approach having been made to Biocompatibles); and

·; 60.6 per cent. to the price of 267.8 pence per Biocompatibles Share (being the average Closing Price for the three-month period ending on 17 September 2010).

Based on the Biocompatibles Fully Diluted Share Capital, the maximum number of New BTG Shares to be issued in connection with the Acquisition will be 68,937,550. Assuming no further BTG Shares are issued in the period between the date of this announcement and the Effective Date, the issued share capital of BTG will, immediately following the Effective Date, comprise up to 326,921,695 BTG Shares, approximately 21.1 per cent. of which will be held by former Biocompatibles Shareholders and approximately 78.9 per cent. of which will be held by existing BTG Shareholders.(10) 

As an alternative to the 10 pence cash element of the consideration, Biocompatibles Shareholders may elect to receive an entitlement to a contingent right to payment of the Sterling equivalent of €0.56(11) per Biocompatibles Share in cash by participating in value that may potentially be achieved from part of Biocompatibles' programme to develop the GLP-1 Compound, which it has partnered with AstraZeneca (referred to in this announcement as the "Partial CVN Alternative"). The Partial CVN Alternative will be effected by the issue of the Contingent Value Notes. Further details are set out in paragraph 10 below.

Biocompatibles Shareholders should note that if the Contingency (as further described in paragraph 10 below) is not satisfied, the Contingent Value Notes will not have any value.

In due course BTG will prepare and send to its shareholders an explanatory circular summarising the background to and reasons for the Acquisition. The circular will include a notice convening the BTG GM. BTG will also publish a prospectus relating to the Enlarged Group and the New BTG Shares.

If the Scheme becomes effective, it will be binding on all Scheme Shareholders irrespective of whether or not they attended or voted in favour of the resolutions at the Court Meeting or the Biocompatibles GM. Further details of the Scheme will be set out in the Scheme Document which will be sent to Biocompatibles Shareholders in due course. 

The New BTG Shares will be issued credited as fully paid and on identical terms to the BTG Shares and will rank pari passu with the BTG Shares in issue at the time the New BTG Shares are issued pursuant to the Acquisition, including the right to receive and retain all dividends and other distributions declared, made or paid on BTG Shares after the Scheme becomes effective.

Fractions of New BTG Shares will not be allotted or issued pursuant to the Acquisition and fractional entitlements will be rounded down to the nearest whole number of New BTG Shares.

3 Recommendation by the Biocompatibles Directors of the Acquisition

The Biocompatibles Directors view the acquisition by BTG as an excellent opportunity to exploit further the potential from the strong platform which has been built to date.

The Enlarged Group will have the improved financial strength and other enhanced resources to allow it to increase investment in marketing of Biocompatibles' products and accelerate the development of Biocompatibles' specialist oncology products. In particular, the BTG Directors intend to undertake registration trials in respect of Biocompatibles' embolising beads and drug-eluting beads to increase both their approved indications and the number of territories in which they can be marketed.

The terms of the Acquisition represent a significant premium to the underlying share price prior to the approach announced on 20 September 2010 and enable Biocompatibles Shareholders to elect to participate in the value that could potentially be received if the AZ Option is exercised or the GLP-1 Compound and related intellectual property rights are otherwise licensed or transferred to AstraZeneca prior to 31 December 2012.

Furthermore, Biocompatibles shareholders will have the opportunity to participate in a successful company with a broad portfolio of products (both directly marketed and partnered) with significant upside potential in the combined development pipeline.

The Biocompatibles Directors, who have been so advised by Piper Jaffray, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Piper Jaffray has taken into account the commercial assessments of the Biocompatibles Directors.

Accordingly, the Biocompatibles Directors unanimously intend to recommend that Biocompatibles Shareholders vote in favour of the Scheme at the Court Meeting and in favour of the Biocompatibles Resolutions at the Biocompatibles GM as they have irrevocably undertaken to do in respect of their own beneficial holdings representing approximately 1.31 per cent. of the Biocompatibles Shares in issue on 18 November 2010, being the last Business Day prior to the date of this announcement.

The Biocompatibles Directors make no recommendation as to whether Biocompatibles Shareholders should elect for the Partial CVN Alternative.

Further details of the Partial CVN Alternative, including certain risks associated with the Partial CVN Alternative, are set out in paragraph 10 below.

Biocompatibles Shareholders are strongly recommended to take their own independent advice having regard to their own particular circumstances and financial objectives before deciding whether to elect for the Partial CVN Alternative, particularly if they are in any doubt as to the potential tax consequences of electing for the Partial CVN Alternative.

4 Background to, and reasons for, BTG's proposal for the acquisition of Biocompatibles

Prior to the acquisition of Protherics in December 2008, most of BTG's revenue was derived from licensing arrangements entered into at early stages of product development. The acquisition of Protherics enabled BTG to realign its business away from an early stage development and partnering model towards a combination of development, partnering and direct sales of its own products. BTG has successfully integrated Protherics, built its own direct specialist sales force and is now advancing its own late stage pipeline of assets (both on its own and through blue chip partners).

The BTG Board believes that the acquisition of Biocompatibles is an opportunity to continue this transition and to create significant value for both existing BTG Shareholders and Biocompatibles Shareholders.

BTG Shareholders will benefit from gaining access to the growing specialist hospital area of interventional medicine, with interventional oncology products that have capacity for significant further growth in the US, the EU and in certain Asian markets. Between 2007 and 2009, the global oncology bead implant market grew by over 50 per cent. per annum(12). The BTG Directors estimate potential global industry implant sales of US$ 400 million - US$ 800 million p.a.(13).

BTG will gain the option to commercialise some of Biocompatibles' products itself by leveraging its US commercial infrastructure in the future. BTG will also gain access to potential value drivers in Biocompatibles' BrachySciences and CellMed businesses and attractive upside potential in the form of the programme to develop the GLP-1 Compound partnered with AstraZeneca.

Combined product portfolio

Biocompatibles' products include Bead Block™ and LC Bead™, which are approved in the US for embolising (blocking) the blood vessels of hypervascular tumours and arteriovenous malformations, a procedure performed in hospitals by interventional radiologists; DC Bead®, which is approved for use in certain territories outside of the US in combination with a drug under an interventional radiology procedure known as trans-arterial chemoembolisation (TACE); AnchorSeed™, an implant used by radiation oncologists to treat early stage prostate cancer; and AnchorMarker™ a gold fiducial marker encapsulated in a bioabsorpable polymer, to aid in marker "fixity" in relation to radiation therapy. The Bead Block™, LC Bead™ and DC Bead® products will form the core of the interventional oncology business of the Enlarged Group, and may complement BTG's future commercialisation of Varisolve®, an interventional endovascular treatment for varicose veins that will be aimed at phlebologists, vascular surgeons and interventional radiologists.

Biocompatibles has experienced high growth in revenues from its high margin bead products in recent years, with revenues increasing by 100 per cent. to £12 million in the year ended 31 December 2009 compared to the year ended 31 December 2008 and by 38 per cent. to £9.3 million in the half year ended 30 June 2010 compared to the half year ended 30 June 2009(14).

Biocompatibles has its own sales and marketing infrastructure in the US, primarily through its BrachySciences business, which may leverage BTG's existing US commercial infrastructure. Biocompatibles also has distribution agreements with Terumo to sell Bead Block™ in the US, and with AngioDynamics to sell the LC Bead™ in the US, which expire on, respectively, 31 December 2010 and 31 December 2011. The Enlarged Group will have the option either to agree new distribution agreements with existing distributors, to enter into agreements with new distributors, or to sell those products itself from these dates through the Enlarged Group's shared infrastructure, potentially alongside other products. Biocompatibles has implemented transitional arrangements to sell Bead Block™ directly to the US market after the expiry of the Terumo distribution agreement.

Partnered opportunities

Biocompatibles' key partnered programmes include the GLP-1 Compound, an investigational drug being developed for the treatment of Type 2 diabetes in collaboration with AstraZeneca (who have an option to license the product and assume responsibility for subsequent development and commercialisation) and Novabel®, a dermal filler for aesthetic indications partnered with Merz and approved in the EU but in relation to which Merz has temporarily suspended shipments as a result of adverse side effects occurring in a few patients. As at 18 November 2010, Merz had not yet resumed shipments and there remains uncertainty over the timing of re-introduction of this product to the market.

Accelerating investment in the development pipeline to drive further growth

The Enlarged Group will have the improved financial strength and other enhanced resources to allow it to increase investment in the marketing of Biocompatibles' products and accelerate the development of Biocompatibles' specialist oncology products. In particular, the BTG Directors intend to undertake registration trials in respect of Biocompatibles' embolising beads and drug-eluting beads to increase the products' approved indications and the territories in which they can be marketed.

Cost effectiveness

Furthermore, the BTG Directors anticipate that they will be able to reduce duplicated head office and administrative costs arising from the combination of BTG and Biocompatibles by approximately £3 million per annum(15). During the process of integration which will follow the Acquisition, the BTG Directors will actively look for further operational synergies which may result from the combination of the BTG Group and the Biocompatibles Group in order to enhance shareholder value further for the Enlarged Group following the Acquisition.

The vision for the Enlarged Group

The vision of the BTG Directors is the creation of a sustainably profitable specialist healthcare company. This will have international reach via a direct sales platform in the US, supplemented by a distribution network in Europe, Asia and beyond. It is envisaged that the Enlarged Group will be focused on specialist products in the following areas:

● acute care and other specialist hospital products;

● interventional medicine, including interventional oncology products and providing a platform for Varisolve® commercialisation; and

● the CellMed platform - cell-based therapies that fit the pharma model.

5 Information on BTG

BTG is an international specialist pharmaceuticals company that derives its revenues from sales of its own products and from royalties from other companies that have licensed products from BTG. BTG has an internal pipeline of products still in development and also a broad pipeline of out-licensed products being developed by its commercial partners. BTG's core activities are:

● sale of its existing products direct in the US;

● development of products to demonstrate safety and efficacy to gain product approvals and to achieve the desired target product profile;

● commercialisation of its current development pipeline through out-licensing or self-marketing; and

● manufacture of polyclonal antibodies.

In December 2008, BTG completed the acquisition of Protherics, the London-listed biopharmaceutical company, enabling BTG to realign its business away from an early stage development and partnering model towards a combination of developing, partnering and direct sales of its own products.

BTG employs approximately 290 people principally in London, Wales, Philadelphia, Nashville, Utah and South Australia.

Six experienced personnel were recruited to strengthen BTG's commercial capabilities for marketing and distributing CroFab™ and DigiFab™ in the US. BTG has established medical affairs and compliance capabilities in the US and an acute care sales force of ten representatives. BTG has been the sole supplier of these products in the US since distribution rights returned to BTG on 1 October 2010.

BTG has continued to invest in its pipeline of development programmes. It intends to complete development and seek US marketing approvals for Voraxaze™ and Varisolve® and, if approved, to market directly both products in the US. BTG is completing its planned development activities for four other clinical programmes (BGC20-0134 (Pleneva™), OncoGel™, ATV and BGC20-1531), which it intends to out-license subsequently.

6 Information on Biocompatibles

Biocompatibles is a medical technology company in the field of drug device combination products. Biocompatibles' business is divided into an oncology products division and a licensing division. The oncology products division (68 per cent. of Biocompatibles Group sales during the year ended 31 December 2009) supplies medical devices from facilities in Farnham, UK and Oxford, CT, USA. These include bead products, which are used in more than 40 countries for the treatment of primary liver cancer (HCC), liver metastases from colorectal cancer, and other cancers; and brachytherapy products (radiation-delivering seeds) which are used in the treatment of prostate cancer. Biocompatibles' distribution partners include AngioDynamics, Terumo and Eisai.

Biocompatibles' licensing division (32 per cent. of the Biocompatibles Group sales during the year ended 31 December 2009) has two components, CellMed and PC Licensing. CellMed, based in Alzenau, Germany, is developing a drug-eluting bead product for the treatment of stroke, based on proprietary stem cell technology; the GLP-1 Compound for the treatment of Type 2 diabetes and other indications partnered with AstraZeneca; and Novabel®, an approved cosmetic dermatology bead partnered with Merz. Biocompatibles' PC licensing agreement with Abbot Laboratories is in respect of Medtronic's Endeavor® drug-eluting stent.

7 Current trading and prospects of the Enlarged Group

BTG continues to operate in line with the BTG Directors' expectations, and the BTG Directors are confident of the financial and trading prospects of BTG for the current financial year.

Biocompatibles continues to operate in line with the Biocompatibles Directors' expectations, and the Biocompatibles Directors are confident of the financial and trading prospects of Biocompatibles for the current financial year.

The Scheme Document and the BTG Prospectus will contain profit forecasts relating to Biocompatibles for the year ending 31 December 2010.

8 Directors, management and employees

The Enlarged Group's board of directors will include Dr John Brown as Chairman, Louise Makin as Chief Executive Officer and Rolf Soderstrom as Chief Financial Officer. Each of the Biocompatibles Directors is expected to resign from the Biocompatibles Board on the date on which the Scheme becomes effective. Details of the expertise of the BTG Directors and the Enlarged Group's current senior technical staff will be set out in the BTG Prospectus.

BTG intends to make proposals to Crispin Simon and Ian Ardill to retain their services to assist in an orderly transition in the period following the Scheme becoming effective. BTG also intends to make proposals to Peter Stratford and John Sylvester to join the senior management of the Enlarged Group. Whilst Biocompatibles benefits from some highly experienced employees, the BTG Directors do not believe the Biocompatibles Group's business is dependent on any individual or group of employees.

BTG has given assurances that, following the Scheme becoming effective, the existing employment rights, including accrued pension rights, of Biocompatibles' employees will be fully safeguarded.

Following the Scheme becoming effective, the Enlarged Group will carry out an integration review process which will include seeking ways to achieve the planned cost savings. It is expected that this integration review process will result in some headcount reduction within the Enlarged Group.

9 Structure of the Acquisition and Shareholder Meetings

It is intended that the Acquisition will be implemented by way of a scheme of arrangement between Biocompatibles and the Scheme Shareholders under Part 26 of the Companies Act (including a reduction of capital under section 641 of the Companies Act). The purpose of the Scheme is to enable BTG to become the owner of the entire issued share capital of Biocompatibles. The procedure involves an application by Biocompatibles to the Court to sanction the Scheme, the cancellation of the Scheme Shares held by Scheme Shareholders, the application of the reserve arising from such cancellation in paying up in full a number of new shares in Biocompatibles (which is equal to the number of the Scheme Shares cancelled) and issuing those new shares to BTG in consideration for which Scheme Shareholders will receive up to 68,937,550 New BTG Shares and either the Partial Cash Consideration or the Contingent Value Notes pursuant to the Partial CVN Alternative on the basis set out in paragraph 2 of this announcement.

The implementation of the Scheme is subject to the satisfaction or (where appropriate) waiver of all the Conditions set out in Appendix I and to the further terms to be set out in the Scheme Document. Implementation of the Scheme is subject, amongst other things, to the approval of a majority in number of the Scheme Shareholders present and voting in person or by proxy at the Court Meeting representing not less than 75 per cent. in value of the Scheme Shares voted by the Scheme Shareholders. Implementation of the Scheme will also require the passing of the Biocompatibles Resolutions, requiring the approval of a majority of Biocompatibles Shareholders representing at least 75 per cent. of the votes cast at the Biocompatibles GM. Application will shortly be made to the Court for leave to convene the Court Meeting.

In view of its size, pursuant to the requirements of the Listing Rules, the Acquisition is also conditional upon approval of BTG Shareholders at the BTG GM. BTG will prepare and send to its shareholders, in due course, an explanatory circular summarising the background to and reasons for the Acquisition. The circular will include a notice convening the BTG GM.

The Scheme Document setting out full details of the Acquisition and the Scheme, together with notices of the Court Meeting and the Biocompatibles GM, the BTG Prospectus and a Form of Election will be posted in due course to Biocompatibles Shareholders who are entitled to receive them.

10 Partial CVN Alternative

Biocompatibles entered into a development and option agreement with AstraZeneca in December 2008 to develop the GLP-1 Compound (the "AZ Agreement"). The AZ Agreement included provision for pre-clinical, Phase I and Phase IIa trials to be managed by Biocompatibles. The third trial in the programme in patients with Type 2 Diabetes, now underway, recruited 16 patients, all of whom have now been treated.

Biocompatibles is currently preparing the final trial in the programme, the proof of principle study, with the intention of optimising the design by implementing the findings from the first three studies. This trial, which will be in a larger group of people and will be designed as a randomised controlled trial, is expected to start at the end of 2010 and be concluded in the first half of 2011. 

The AZ Agreement provides AstraZeneca with an option to license exclusively the GLP-1 Compound (and certain other fusion peptides) and relevant patents and other intellectual property rights, on agreed terms, including as to milestone and royalty payments, for use in the field of Type 2 diabetes or any other indication, subject to certain retained rights of Biocompatibles (the "AZ Option"). The terms of the agreed form of licence contemplate a potential milestone payment of €25 million by AstraZeneca (the "Licence Milestone Payment") if it exercises the AZ Option (with the potential for further milestone and royalty payments under the agreed form licence).

The Contingent Value Notes are intended to enable Scheme Shareholders who elect to receive the Partial CVN Alternative to participate in the value of the Licence Milestone Payment, net of inventor royalties and tax, subject to certain conditions being met.

BTG has agreed that if, prior to 31 December 2012, either:

(i) AstraZeneca exercises the AZ Option on the agreed terms; or

(ii) the Enlarged Group, otherwise than on the agreed terms of the AZ Option, enters into any other licence, sale or other disposal or other arrangement with similar effect (each being a "Disposal") with AstraZeneca with respect to the rights to the GLP-1 Compound,

(the "Contingency"),

the Contingent Value Notes will be redeemable for the Sterling equivalent of €0.56 per Biocompatibles Share, payable in cash within 28 days of the Contingency occurring, subject to AstraZeneca being in material compliance with its payment obligations to the Enlarged Group related to the Contingency (even if such obligations relate to a lower amount than €25 million). Any amount payable will be converted into Sterling at the latest practicable time before any payment is made at the best commercial exchange rate reasonably achievable by BTG at that time. In the event that AstraZeneca fails to be in material compliance with its payment obligations when they fall due, redemption of the Contingent Value Notes will be delayed until such time as AstraZeneca has materially satisfied its payment obligations, provided that takes place prior to 30 June 2013. The redemption amount is based on the amount (net of tax and inventor royalties) of the Licence Milestone Payment potentially receivable by the Enlarged Group if the AZ Option is exercised, as described above. If the Contingency is satisfied, the redemption amount will be payable regardless of the amount of the consideration payable by AstraZeneca to the Enlarged Group (subject to AstraZeneca being in material compliance with its payment obligations to the Enlarged Group related to the Contingency).

If the Contingency occurs as set out in paragraph (ii) above, with AstraZeneca not having exercised the AZ Option to receive a licence on the agreed terms, but instead renegotiated commercial terms having been agreed between the Enlarged Group and AstraZeneca, the up-front consideration receivable by the Enlarged Group may be less than the €25 million Licence Milestone Payment. In these circumstances, the Sterling equivalent of €0.56 per Biocompatibles Share pursuant to the Contingent Value Notes would nevertheless remain payable to Scheme Shareholders who had validly elected for the Partial CVN Alternative. However, Biocompatibles Shareholders should note that any obligation of BTG to honour the Partial CVN Alternative following the occurrence of any Contingency will constitute an unsecured obligation of BTG. In the event that BTG defaults in honouring its payment obligations pursuant to the Partial CVN Alternative due to the insolvency of BTG or otherwise, Scheme Shareholders who have validly elected for the Partial CVN Alternative will rank only as unsecured creditors of BTG.

Biocompatibles Shareholders should note that if AstraZeneca does not exercise the AZ Option on the agreed terms and seeks to re-negotiate the terms relating to the licence of the GLP-1 Compound, the Enlarged Group may be unwilling or unable to reach a new agreement with AstraZeneca. In such circumstances, the Contingency will not occur and consequently no payment will become due to Biocompatibles Shareholders who elected for the Partial CVN Alternative.

No consideration will be payable pursuant to the Contingent Value Notes if a Disposal take place in respect of the rights to the GLP-1 Compound (at any time) to a party other than AstraZeneca; or if AstraZeneca does exercise the AZ Option prior to 31 December 2012, but AstraZeneca is not in material compliance with its payment obligations to the Enlarged Group related to the Contingency. BTG will undertake that in those circumstances it will procure that the relevant member(s) of the Enlarged Group will use their respective best endeavours to ensure that AstraZeneca complies with its payment obligations to the Enlarged Group related to the Contingency as promptly as possible. Payment of the consideration pursuant to the Contingent Value Notes would then occur within 14 days after the date on which AstraZeneca became in material compliance with its payment obligations to the Enlarged Group related to the Contingency (provided that such compliance was achieved on or prior to 30 June 2013).

In addition, if the initial milestone or other payment due under a Disposal to Astra Zeneca (or if there is no initial milestone or other payment, effectiveness of the Disposal), is subject to any approvals or clearances required by applicable law or regulation, no cash consideration will be payable pursuant to the Contingent Value Notes unless and until each such approval or clearance is obtained. In those circumstances BTG will procure that the relevant member(s) of the Enlarged Group will use their respective best endeavours to ensure that the relevant approvals and/or clearances are obtained as promptly as possible and payment of the consideration pursuant to the Contingent Value Notes would then occur within 14 days of the later of (i) all such relevant approvals and/or clearances having been unconditionally obtained and (ii) AstraZeneca being in material compliance with its payment obligations related to the Contingency on or prior to 30 June 2013).

In addition, no consideration will be payable pursuant to the Contingent Value Notes if the exercise of the AZ Option or the Disposal to AstraZeneca occurs after 31 December 2012. 

Furthermore, in reaching a decision to elect for the Partial CVN Alternative, Biocompatibles Shareholders should also take into account, among other things, the following:

·; the risk that the Contingency may not occur;

·; the timing of the payment, if any, in connection with the Contingent Value Notes is uncertain. It will be dependent on the timing of the Contingency occurring. This means that any cash payable to Biocompatibles Shareholders electing for the Partial CVN Alternative may not ultimately be receivable until 2013, if it is received at all. In contrast, payment of the Partial Cash Consideration would be made to Biocompatibles Shareholders who do not elect to receive the Partial CVN Alternative, within 14 days of the Effective Date;

·; if AstraZeneca does not exercise the AZ Option on the agreed terms and seeks to re-negotiate the terms relating to the AZ Option, the Enlarged Group may be unwilling or unable to reach a new agreement with AstraZeneca, or may reach an agreement with a third party regarding the GLP-1 Compound. In that event, the Contingency would not be satisfied and no payment would be made by BTG in respect of the Contingent Value Notes;

·; any obligation of BTG to honour the Partial CVN Alternative following the occurrence of any Contingency, will constitute an unsecured obligation of BTG. In the event that BTG defaults in honouring its payment obligations pursuant to the Partial CVN Alternative due to the insolvency of BTG or otherwise, Biocompatibles Shareholders who have validly elected for the Partial CVN Alternative will rank only as unsecured creditors of BTG; and

·; tax may be payable by UK tax-paying Biocompatibles Shareholders who elect for the Partial CVN Alternative before the Contingency occurs or before any payment in respect of the Contingency is received. If, following payment of tax, the Contingency does not occur, such Biocompatibles Shareholders should be able to reclaim tax paid although there may be substantial delays between the payment of the tax and receipt of any repayment from HM Revenue & Customs. Further details on the taxation implications of the Acquisition for Biocompatibles Shareholders will be set out in the Scheme Document.

Biocompatibles Shareholders are strongly recommended to take their own independent advice having regard to their own particular circumstances and financial objectives before deciding whether to elect for the Partial CVN Alternative, particularly if they are in any doubt as to the potential tax consequences of electing for the Partial CVN Alternative.

The Contingent Value Notes will be issued in registered form and will, subject to certain restrictions, be transferable. However, the Contingent Value Notes will not be listed on any stock exchange.

The Contingent Value Notes will not be offered or available to or for the account or benefit of a person located in the United States or any other jurisdiction where the sale, issue or transfer of the Contingent Value Notes would be in contravention of applicable law. Scheme Shareholders in such jurisdictions will, under the terms of the Scheme, not be permitted to elect for the Partial CVN Alternative.

Issue of the Contingent Value Notes is subject to the terms of the Scheme. Further details of the Contingent Value Notes will be set out in the Scheme Document.

11 Implementation Agreement

Biocompatibles and BTG have entered into the Implementation Agreement in connection with the Acquisition, pursuant to which each of the parties has undertaken, among other things, and, as promptly as practicable, to take or cause to be taken all such reasonable steps as are within their respective powers and necessary to implement the Acquisition.

Biocompatibles has undertaken that it will make the necessary applications to the Court and file such documents as may be necessary to seek the Court's permission to convene the Court Meeting.

Biocompatibles has agreed that prior to the Scheme becoming effective or the Implementation Agreement being terminated in accordance with its terms (whichever is earlier), it will conduct its business in accordance with an agreed set of principles.

As an inducement to BTG proceeding with the Acquisition, Biocompatibles has agreed to pay BTG an inducement fee of £1.75 million (which may be subject to a reduction in connection with VAT in certain circumstances) if:

(i) a Competing Proposal in relation to Biocompatibles (or any amendment, variation or revision of such proposal) is announced pursuant to Rule 2.5 of the Code prior to the Acquisition lapsing or being withdrawn and such Competing Proposal subsequently becomes or is declared wholly unconditional or is otherwise completed; or

(ii) the Biocompatibles Directors either (i) fail to recommend or (ii) withdraw or adversely modify or qualify their recommendation to Biocompatibles Shareholders to vote in favour of the Scheme and the Biocompatibles Resolutions respectively at the Court Meeting and the Biocompatibles GM or (as the case may be) accept the Takeover Offer, and subsequently the Acquisition lapses or is withdrawn; or

(iii) the Biocompatibles Directors recommend any Competing Proposal in relation to Biocompatibles and

subsequently the Acquisition lapses or is withdrawn.

As an inducement to Biocompatibles proceeding with the Acquisition, BTG has agreed to pay Biocompatibles an inducement fee of £1.75 million (which may be subject to a reduction in connection with VAT in certain circumstances) if the BTG Directors (i) fail to convene the BTG GM or (ii) fail to recommend BTG Shareholders to vote in favour of the BTG Resolution at the BTG GM or (iii) withdraw or adversely modify or qualify such recommendation, and (in any such case) subsequently the Acquisition lapses or is withdrawn.

However, neither Biocompatibles nor BTG are obliged to pay any amount which the Panel determines would not be permitted by Rule 21.2 of the Code.

12 Irrevocable Undertakings

BTG and Biocompatibles have received irrevocable undertakings to vote (or procure voting) in favour of the resolutions at the Court Meeting and the Biocompatibles GM (or, if in accordance with the terms of the Implementation Agreement, BTG has elected to implement the Acquisition by way of a Takeover Offer, to accept the Takeover Offer) from each of the Biocompatibles Directors in respect of their current entire legal and beneficial holdings of Biocompatibles Shares (save for shares held in trust under the Biocompatibles Share Incentive Plan) and those of their connected persons and amounting, in aggregate, to 516,768 Biocompatibles Shares, representing approximately 1.31 per cent. of Biocompatibles' existing issued share capital. These undertakings will continue to be binding in the event of a higher offer.

BTG has received irrevocable undertakings to vote (or procure voting) in favour of the resolutions at the Court Meeting and the Biocompatibles GM (or, if in accordance with the terms of the Implementation Agreement, BTG has elected to implement the Acquisition by way of a Takeover Offer, to accept the Takeover Offer) from Hunter Hall Investment Management Ltd and Invesco Asset Management Limited in respect of, in aggregate, 20,415,611 Biocompatibles Shares, representing approximately 51.87 per cent. of Biocompatibles' existing issued share capital.

BTG has received a non-binding letter of intent from Aberforth Partners LLP to vote in favour of the resolutions to be proposed at the Court Meeting and the Biocompatibles GM necessary to approve the Scheme (or, as the case may be, to accept the Takeover Offer) in respect of 4,129,391 Biocompatibles Shares, representing approximately 10.49 per cent. of Biocompatibles' existing issued share capital.

BTG and Biocompatibles have received irrevocable undertakings to vote in favour of the BTG Resolution from those BTG Directors who hold BTG Shares in respect of their entire holding of BTG Shares amounting to, in aggregate, 466,257 BTG Shares, representing approximately 0.18 per cent. of BTG's existing issued share capital.

BTG has received an irrevocable undertaking to vote (or procure voting) in favour of the BTG Resolution from Invesco Asset Management Limited in respect of, 67,787,995 BTG Shares, representing 26.28 per cent. of BTG's existing issued share capital. BTG has received an irrevocable undertaking to vote (or procure voting) in favour of the BTG Resolution from M&G Investment Management Limited in respect of its entire holding of BTG Shares, which, as at close of business on 18 November 2010, amounted to 37,878,550 BTG Shares representing 14.68 per cent. of BTG's existing issued share capital.

Particulars of the irrevocable undertakings referred to above are contained in Appendix III to this announcement.

References in this paragraph 12 to Biocompatibles or BTG's existing issued share capital (as applicable) are given as at 18 November 2010 (the last Business Day prior to this announcement).

13 Biocompatibles Share Schemes

The Scheme will extend to any Biocompatibles Shares that are unconditionally allotted or issued pursuant to the exercise of options or the vesting of awards or the purchase of Biocompatibles Shares under the Biocompatibles Share Schemes in each case on or prior to the Reduction Record Time. Appropriate proposals will be made to participants in the Biocompatibles Share Schemes at the same time as the Scheme Document is posted or as soon as reasonably practicable thereafter. Details of these proposals will be set out in the Scheme Document and in separate letters to be sent to participants in the Biocompatibles Share Schemes.

14 Settlement, listing and dealings in New BTG Shares

Prior to the Scheme becoming effective, Biocompatibles will make an application to the UK Listing Authority and to the London Stock Exchange for the cancellation of the Biocompatibles Shares from listing on the Official List and trading on the London Stock Exchange's main market for listed securities respectively. Accordingly, if the Scheme is sanctioned by the Court and the other conditions to the Scheme are waived or satisfied, it is expected that the Biocompatibles Shares will cease to be listed on the Official List and traded on the London Stock Exchange's main market for listed securities on or before 8.00 a.m. on the Effective Date.

On the Effective Date, share certificates in respect of Biocompatibles Shares will cease to be valid and should, if so requested by Biocompatibles, be sent to Biocompatibles for cancellation. In addition, on the Effective Date entitlements to Biocompatibles Shares held within the CREST system will be cancelled. It is proposed that following the Effective Date and after its shares have been delisted, Biocompatibles will be re-registered as a private company.

It is intended that applications will be made to the UK Listing Authority and to the London Stock Exchange for the New BTG Shares to be issued in connection with the Acquisition to be admitted to the Official List and to trading on the London Stock Exchange's main market for listed securities.

The New BTG Shares are to be issued in registered form and will be capable of being held in both certificated and uncertificated form. Settlement of the New BTG Shares and the Partial Cash Consideration or the Contingent Value Notes to which Biocompatibles Shareholders are entitled is expected to occur as soon as possible after the Effective Date and in any event within 14 days of the Effective Date. The existing BTG Shares are already admitted to CREST. It is expected that all of the New BTG Shares, when issued and fully paid, will be capable of being held and transferred by means of CREST. It is expected that the New BTG Shares will trade under ISIN GB0001001592.

Further details on listing, dealing and settlement will be included in the Scheme Document.

15 Financing the Acquisition

The Partial Cash Consideration will be funded from BTG's existing cash resources.

Rothschild is satisfied that sufficient financial resources are available to BTG to satisfy in full the Partial Cash Consideration irrespective of whether any Scheme Shareholder elects to receive the Partial CVN Alternative. 

16 Overseas Biocompatibles Shareholders

Biocompatibles Shareholders who are resident in, ordinarily resident in, or who are citizens of any jurisdiction outside the UK ("Overseas Biocompatibles Shareholders") should consult their independent professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to participate in the Acquisition. If a Biocompatibles Shareholder is in any doubt as to his eligibility to participate in the Acquisition, he should contact his independent professional adviser immediately.

The implications of the Scheme for Overseas Biocompatibles Shareholders may be affected by the laws of the relevant jurisdictions. Such Overseas Biocompatibles Shareholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of each Overseas Biocompatibles Shareholder to satisfy himself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required to be observed and the payment of any issue, transfer or other taxes in such jurisdictions.

The Contingent Value Notes will not be offered or available to or for the account or benefit of a person located in the US or any other jurisdiction where the sale, issue or transfer of the Contingent Value Notes would be in contravention of applicable law. Scheme Shareholders in such jurisdictions will, under the terms of the Scheme, not be permitted to elect for the Partial CVN Alternative.

17 Expected timetable of principal events

It is expected that the formal documentation setting out details of the Acquisition will be posted to Biocompatibles Shareholders and BTG Shareholders (as applicable) by mid December 2010 and, in any event within 28 days of the date of this announcement (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree). It is further expected that the Biocompatibles GM and the BTG GM will be held in early January 2011 and the Effective Date will be in early February 2011. These dates are indicative only and will depend, among other things, on the date upon which the Court sanctions the Scheme.

18 Disclosure of interests in Biocompatibles Shares

BTG confirms that it will, on the date of this announcement, make an Opening Position Disclosure pursuant to Rule 8.1(a) of the Code.

19 Analyst presentation

An analyst/investor briefing will be held today at 09.30 a.m. at the offices of Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB. There will be a live audio webcast accessible at the BTG website: www.btgplc.com. For further details please contact Mo Noonan on +44 (0)20 7269 7116.

20 Enquiries

21 Cautionary note on forward looking statements

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of BTG and Biocompatibles and certain plans and objectives of the BTG Directors and the Biocompatibles Directors with respect thereto. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the BTG Directors and the Biocompatibles Directors in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although the BTG Directors and the Biocompatibles Directors believe that the expectations reflected in such forward-looking statements are reasonable, neither BTG nor Biocompatibles can give any assurance that such expectations will prove to have been correct and assume no obligation to update or correct the information contained in this announcement (except to the extent legally required) and BTG and Biocompatibles therefore caution you not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement.

Nothing in this announcement is intended to be a profit forecast.

22 Dealing disclosure requirements

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

23 General

BTG reserves the right, with the consent of the Panel, to seek to implement the Acquisition by making a takeover offer for the entire issued and to be issued share capital of Biocompatibles. If BTG elects to implement the Acquisition by a Takeover Offer, the Takeover Offer will be implemented on the same terms (subject to appropriate amendments including (without limitation) an acceptance condition set at 90 per cent. (or such lesser percentage being more than 50 per cent. as BTG may decide) of the shares to which such offer relates and of the voting rights carried by those shares), so far as applicable, as those which would apply to the Scheme. Further, if sufficient acceptances of any such offer are received and/or sufficient Biocompatibles Shares are otherwise acquired, it is the intention of BTG to acquire compulsorily any outstanding BTG Shares to which such offer relates. The Biocompatibles Directors have confirmed that, in the event that BTG determines to implement the Acquisition by way of a Takeover Offer, the Biocompatibles Directors will recommend, on a unanimous and unqualified basis, that Biocompatibles Shareholders accept the Takeover Offer (except to the extent permitted by the Implementation Agreement).

This announcement is not intended to and does not constitute or form part of, an offer or invitation to sell or subscribe for or acquire or exchange securities in BTG or Biocompatibles or a solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. The full terms and conditions of the Scheme will be set out in the Scheme Document. This announcement does not constitute a prospectus or a prospectus equivalent document. Biocompatibles Shareholders are advised to read carefully the formal documentation in relation to the Acquisition, once it is dispatched. In deciding whether or not to approve the Scheme, Biocompatibles Shareholders must rely solely on the terms and conditions of the Acquisition and the information contained or referenced and the procedures described, in the Scheme Document.

The release, publication or distribution of this announcement in jurisdictions other than the UK and the implications of the Scheme for Biocompatibles Shareholders outside the UK may be affected by the laws of the relevant jurisdictions. Biocompatibles Shareholders outside the UK should inform themselves about and observe any applicable requirements. It is the responsibility of each Biocompatibles Shareholder to satisfy himself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required to be observed and the payment of any issue, transfer or other taxes in such jurisdictions. This announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK.

Neither the New BTG Shares nor the Contingent Value Notes have been, nor will they be, registered under the Securities Act or under the securities laws of any jurisdiction of the United States and will not be listed on any stock exchange in the United States. Neither the US Securities and Exchange Commission nor any US state securities commission has approved or disapproved of the New BTG Shares or the Contingent Value Notes, or determined if this announcement is accurate or complete. Any representation to the contrary is a criminal offence under US law. Further, the relevant clearances have not been, and will not be, obtained from the securities commission of any province of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance and neither the New BTG Shares nor the Contingent Value Notes have been, and nor will they be, registered under or offered in compliance with applicable securities laws of any state, province, territory or jurisdiction of Canada, Australia or Japan. Accordingly, neither the New BTG Shares nor the Contingent Value Notes may (unless an exemption under relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, a person located in the United States, Canada, Australia or Japan.

It is expected that the New BTG Shares will be issued in reliance upon the exemption from the registration requirements of the Securities Act provided by Section 3(a)(10) thereof. Under applicable US securities laws, Biocompatibles Shareholders who are or will be deemed to be 'affiliates' of Biocompatibles or BTG prior to, or of the Enlarged Group after, the Effective Date will be subject to certain transfer restrictions relating to the New BTG Shares received in connection with the Scheme.

Rothschild, which is authorised and regulated in the UK by the FSA, is acting as sole financial adviser and joint sponsor to BTG in connection with the Acquisition and no one else and will not be responsible to anyone other than BTG for providing the protections afforded to clients of Rothschild nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement.

J.P. Morgan Cazenove, which is authorised and regulated in the UK by the FSA, is acting as joint sponsor and corporate broker to BTG in connection with the Acquisition and no one else and will not be responsible to any other person for providing the protections afforded to clients of J.P. Morgan Cazenove nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement.

Piper Jaffray, which is authorised and regulated in the UK by the FSA, is acting as financial adviser to Biocompatibles in connection with the Acquisition and no one else and will not be responsible to anyone other than Biocompatibles for providing the protections afforded to clients of Piper Jaffray nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement.

Nomura Code, which is authorised and regulated in the UK by the FSA, is acting as corporate broker to Biocompatibles in connection with the Acquisition and no one else and will not be responsible to anyone other than Biocompatibles for providing the protections afforded to clients of Nomura Code nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement.

In accordance with Rule 2.10 of the Code, BTG confirms that it has 257,984,145 shares of 10 pence each in issue and admitted to trading on the London Stock Exchange's main market for listed securities under the UK ISIN Code GB0001001592.

In accordance with Rule 19.11 of the Code, a copy of this announcement will be published, subject to certain restrictions relating to persons resident in restricted jurisdictions, on the BTG website at www.btgplc.com and the Biocompatibles website at www.biocompatibles.com, by no later than 12:00 noon (London time) on 22 November 2010. For the avoidance of doubt, the contents of these websites are not incorporated into and do not form part of this announcement.

24 Appendices

Appendix I sets out the Conditions and further terms of the Acquisition.

Appendix II sets out the bases and sources of information from which the financial calculations used in this announcement have been derived.

Appendix III contains particulars of the irrevocable undertakings referred to in paragraph 12 of this announcement.

Appendix IV contains the definitions of terms used in this announcement (including the summary).

Notes:

1. Any amount payable will be converted into Sterling at the latest practicable time before any payment is made at the best commercial exchange rate reasonably achievable by BTG at that time. Based on a €/£ exchange rate of 0.8506 (being the published exchange rate at the close of business on 18 November 2010 (the last Business Day prior to the date of this announcement), €0.56 is currently equivalent to 47.6 pence.

2 These figures have been extracted without material adjustment from the audited annual report and accounts for Biocompatibles for the year ended 31 December 2009 and the audited annual report and accounts for BTG for the year ended 31 March 2010.

3 These figures represent the aggregate cash balances of BTG and Biocompatibles as extracted without material adjustment from the unaudited financial statements of BTG for the six months ended 30 September 2010 and the unaudited financial statements of Biocompatibles for the six months ended 30 June 2010.

4 The statement regarding earnings enhancement should not be interpreted to mean that earnings per BTG Share for the current or future financial periods will necessarily be greater than those for the relevant preceding financial period. The return on investment and cost savings figures relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. As a result, the figures referred to may not be achieved.

5 Excluding the Acquisition related amortisation and one-off costs (transaction expenses and restructuring).

6 Based on the net cost of the Acquisition and after deducting Biocompatibles' cash and cash equivalents.

7 The percentage ownership of the Enlarged Group held by former Biocompatibles Shareholders and existing BTG Shareholders is based on the enlarged issued share capital of BTG following the Acquisition, being the aggregate of 257,984,145 BTG Shares in issue on 18 November, 2010 (being the last Business Day prior to this announcement) and the maximum number of 68,937,550 New BTG Shares to be issued pursuant to the Acquisition. 

8 Based on the net cost of the Acquisition and after deducting Biocompatibles' cash and cash equivalents.

9 The statement regarding earnings enhancement should not be interpreted to mean that earnings per BTG Share for the current or future financial periods will necessarily be greater than those for the relevant preceding financial period. The return on investment and cost savings figures relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. As a result, the figures referred to may not be achieved.

10 The percentage ownership of the Enlarged Group held by former Biocompatibles Shareholders and existing BTG Shareholders is based on the enlarged issued share capital of BTG following the Acquisition, being the aggregate of 257,984,145 BTG Shares in issue on 18 November, 2010 (being the last Business Day prior to this announcement) and the maximum number of 68,937,550 New BTG Shares to be issued pursuant to the Acquisition. 

11 This amount will be converted to Sterling at the latest practicable time before any payment is made at the best commercial exchange rate reasonably achievable by BTG at that time. Based on a €/£ exchange rate of 0.8506 (being the exchange rate at the close of business on 18 November 2010, the last Business Day prior to the date of this announcement), €0.56 is currently equivalent to 47.6 pence.

12 Source: Biocompatibles data and publicly available data from Biosphere Medical, Inc. and Sirtex Medical Limited.

13 Source: BTG estimates.

14 These figures have been extracted without material adjustment from the accounts for Biocompatibles for the three years ended 31 December 2009 and the unaudited financial statements of Biocompatibles for the six months ended 30 June 2009 and the six months ended 30 June 2010.

15 The cost savings figures relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. As a result, the figures referred to may not be achieved.

APPENDIX I

Conditions and Further Terms of the Acquisition

The Acquisition will be conditional upon the Scheme becoming unconditional and becoming effective by not later than 24 March 2011, or such later date (if any) as Biocompatibles and BTG may, with the consent of the Panel (if required) agree and the Court may allow.

PART A

Conditions of the Acquisition

1. The Scheme will be conditional upon:

1.1 its approval by a majority in number of Scheme Shareholders (or any relevant class or classes thereof), present and voting either in person or by proxy, at the Court Meeting (or at any adjournment of such meeting) representing 75% or more in value of the Scheme Shares voted by those Scheme Shareholders;

1.2 the resolution(s) required to implement the Scheme and set out in the notice of the Biocompatibles GM being duly passed by the requisite majority at the Biocompatibles GM (or at any adjournment of such meeting); and

1.3 the sanction (with or without modification, any such modification being on terms reasonably acceptable to Biocompatibles and BTG) of the Scheme and the confirmation of the Reduction of Capital by the Court being obtained and office copies of the Court Orders being filed with, and in the case of the Reduction Court Order registered by, the Registrar of Companies.

2. In addition, subject as stated in Part B below, the Acquisition is conditional upon the following matters, and accordingly the necessary actions to make the Scheme effective will not be taken unless such Conditions have been satisfied (where capable of satisfaction), or waived, prior to the Scheme being sanctioned by the Court in accordance with paragraph 1 above:

2.1 the passing at the BTG GM (or at any adjournment thereof) of such resolution or resolutions as are necessary or, in the opinion of BTG, desirable to approve, effect and implement the Acquisition;

2.2 the Financial Services Authority agreeing to Admission occurring and (unless the Panel otherwise

agree) Admission becoming effective;

2.3 no central bank, government or governmental, quasi-governmental, supranational, statutory or regulatory body, or any court, institution, investigative body, association, trade agency or professional or environmental body or (without prejudice to the generality of the foregoing) any other person or body having statutory or regulatory competence in any jurisdiction (each, a "Relevant Authority") having decided to take, instituted, implemented or threatened any action, proceedings, suit, investigation or enquiry or enacted, made or proposed any statute, regulation or order or otherwise taken any other step or done any thing, and there not being outstanding any statute, legislation or order, that would:

(i) restrict, restrain, prohibit, delay, impose additional conditions or obligations with respect to, or otherwise interfere with the implementation of, the Acquisition, the acquisition of any Biocompatibles Shares by BTG or any matters arising therefrom, in each case in a manner which is material in the context of the Acquisition;

(ii) require, prevent, delay or affect the divestiture by BTG or any of its subsidiaries, subsidiary undertakings or associated undertakings (including any company, partnership, joint venture or firm of which 20 per cent. or more of the voting capital is held by the BTG Group (together the "wider BTG Group") or Biocompatibles or any of its subsidiaries, subsidiary undertakings or associated undertakings (including any company, partnership, joint venture or firm of which 20 per cent. or more of the voting capital is held by the Biocompatibles Group (together the "wider Biocompatibles Group") of all or any portion of their businesses, assets or property or of any Biocompatibles Shares or other securities in Biocompatibles or impose any limitation on the ability of any of them to conduct their respective businesses or own their respective assets or properties or any part thereof, in any such case to an extent which is material in the context of the wider BTG Group, or the wider Biocompatibles Group, as the case may be, taken as a whole;

(iii) impose any limitation on the ability of any member of the wider BTG Group to acquire or hold or exercise effectively, directly or indirectly, all rights of all or any of the Biocompatibles Shares (whether acquired pursuant to the Acquisition or otherwise) to an extent which is material in the context of the wider BTG Group;

(iv) other than in connection with the Acquisition, require any member of the wider BTG Group or the wider Biocompatibles Group to acquire or to offer to acquire any shares or other securities or rights thereover in any member of the wider Biocompatibles Group owned by any third party in any such case to an extent which is material in the context of the wider BTG Group, or the wider Biocompatibles Group, as the case may be, taken as a whole;

(v) make the Acquisition or its implementation or the proposed acquisition of Biocompatibles or any member of the wider Biocompatibles Group or of any Biocompatibles Shares or any other shares or securities in, or control of, Biocompatibles, illegal, void or unenforceable in or under the laws of any jurisdiction in any such case to an extent which is material in the context of the wider BTG Group, or the wider Biocompatibles Group, as the case may be, taken as a whole;

(vi) impose any limitation on the ability of any member of the wider BTG Group or the wider Biocompatibles Group to integrate or co-ordinate its business, or any part of it, with the business of any other member of the wider BTG Group or the wider Biocompatibles Group in any such case to an extent which is material in the context of the wider BTG Group, or the wider Biocompatibles Group, as the case may be, taken as a whole; or

(vii) otherwise adversely affect any or all of the businesses, assets, financial or trading position, prospects or profits of any member of the wider BTG Group or the wider Biocompatibles Group or the exercise of any rights attaching to the shares of any company in the Biocompatibles Group in any such case to an extent which is material in the context of the wider BTG Group, or the wider Biocompatibles Group, as the case may be, taken as a whole;

and all applicable waiting or other time periods during which such Relevant Authority could take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or otherwise intervene in respect of the Acquisition, having expired, lapsed or been terminated;

2.4 all authorisations, orders, grants, consents, clearances, licences, permissions and approvals, in any jurisdiction, reasonably necessary for or in respect of the Acquisition, the proposed acquisition of any shares or securities in, or control of, Biocompatibles or any member of the wider Biocompatibles Group by any member of the wider BTG Group or the carrying on of the business of any member of the wider Biocompatibles Group or the wider BTG Group, the issue of the New BTG Shares or any matters arising therefrom being obtained in terms reasonably satisfactory to BTG from all appropriate Relevant Authorities and such authorisations, orders, grants, consents, clearances, licences, permissions and approvals remaining in full force and effect and there being no notice of any intention to revoke, suspend, restrict, modify or not to renew the same and all necessary notifications, applications and filings having been made, all appropriate waiting and other time periods (including extensions thereto) under any applicable legislation and regulations in any jurisdiction having expired, lapsed or been terminated and all necessary statutory or regulatory obligations in any jurisdiction in respect of the Acquisition or the proposed acquisition of Biocompatibles or of any Biocompatibles Shares by BTG or any matters arising therefrom having been complied with and in each case where the direct consequence of a failure to obtain such authorisations, orders, grants, consents, clearances, licences, permissions or approvals, or make such filing or notification or to wait for the expiry, lapse or termination of any such waiting or other time period or to comply with such obligations would or is reasonably likely to have material adverse effect on the wider BTG Group taken as a whole or the wider Biocompatibles Group taken as a whole;

2.5 except as fairly disclosed in the annual report and accounts of Biocompatibles for the year ended 31 December 2009, the half year report of Biocompatibles for the six months ended 30 June 2010, as publicly announced by or on behalf of Biocompatibles (by delivery of an announcement to a Regulatory Information Service) before 19 November, 2010 or as fairly disclosed to BTG before 19 November, 2010, there being no provision of any agreement, instrument, permit, licence or other arrangement to which any member of the wider Biocompatibles Group is a party or by or to which it or any of its assets may be bound or subject which, as a consequence of the Acquisition or the proposed acquisition of Biocompatibles by BTG or because of a change in the control or management of Biocompatibles or any member of the Biocompatibles Group or any matters arising therefrom or otherwise, would or might reasonably be expected to have the result (which, in any such case is material and adverse in the context of the wider Biocompatibles Group taken as a whole) that:

(i) any monies borrowed by, or other indebtedness, actual or contingent, of, or grant available to, any member of the wider Biocompatibles Group becomes or is capable of being declared repayable immediately or earlier than the repayment date stated in such agreement, instrument or other arrangement or the ability of any member of the wider Biocompatibles Group to borrow monies or incur indebtedness is withdrawn, inhibited or adversely affected or becomes capable of being withdrawn or inhibited;

(ii) any mortgage, charge or other security interest is created over the whole or any part of the business, property or assets of any member of the wider Biocompatibles Group or any such security (whenever arising) becomes enforceable;

(iii) any such agreement, instrument, permit, licence or other arrangement, or any right, interest, liability or obligation of any member of the wider Biocompatibles Group therein, is terminated or adversely modified or affected or any adverse action is taken or onerous obligation or liability arises thereunder;

(iv) the financial or trading position of any member of the wider Biocompatibles Group is prejudiced or adversely affected;

(v) any material asset or, other than in the ordinary course of business, any asset of the wider Biocompatibles Group is or falls to be charged or disposed of;

(vi) the rights, liabilities, obligations or interests or business of any member of the wider Biocompatibles Group in or with any other person, firm or company (or any arrangement relating to such interest or business) are terminated, modified or adversely affected; or

(vii) any member of the wider Biocompatibles Group ceases to be able to carry on business under any name under which it currently does so,

and no event having occurred which, under any provision of any agreement, instrument, permit, licence or other arrangement to which any member of the wider Biocompatibles Group is a party or by or to which it or any of its assets may be bound or subject, could result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (vii) of this Condition 2.6 (in any such case to an extent which is material in the context of the wider Biocompatibles Group taken as a whole);

2.6 except as fairly disclosed in the annual report and accounts of Biocompatibles for the year ended 31 December 2009, the half year report of Biocompatibles for the six months ended 30 June 2010, as publicly announced by or on behalf of Biocompatibles (by delivery of an announcement to a Regulatory Information Service) before 19 November, 2010 or as fairly disclosed to BTG before 19 November, 2010, since 31 December 2009, no member of the Biocompatibles Group having:

(i) issued or agreed to issue or authorised or proposed the issue of additional shares of any class or issued or authorised or proposed the issue of or granted securities convertible into or rights, warrants or options to subscribe for or acquire such shares or convertible securities or redeemed, purchased or reduced or announced any intention to do so or made any other change to any part of its share capital, save as between Biocompatibles and wholly owned subsidiaries of Biocompatibles and save for the issue of Biocompatibles Shares pursuant to or in connection with rights granted under, or the grant of the rights under the Biocompatibles Share Schemes which have been disclosed to BTG before 19 November 2010 or pursuant to or in connection with obligations in connection with the acquisition of CellMed AG or its BrachySciences business;

(ii) sold or transferred or agreed to sell or transfer any treasury shares;

(iii) recommended, declared, paid or made or proposed to recommend, declare, pay or make any dividend, bonus or other distribution other than dividends lawfully paid to other members of the Biocompatibles Group;

(iv) authorised or proposed or announced its intention to propose any merger or demerger or acquisition or disposal or transfer of assets or shares or securities or any change in its share or loan capital;

(v) issued or authorised or proposed the issue of any debentures or incurred or increased any indebtedness or contingent liability, in each case of an aggregate amount that is material in the context of the wider Biocompatibles Group taken as a whole;

(vi) save for transactions between members of the Biocompatibles Group, disposed of or

transferred, mortgaged or encumbered any asset or any right, title or interest in any asset or entered into or varied any contract, commitment or arrangement (whether in respect of capital expenditure or otherwise) which is of a long term or unusual nature or which involves or could involve an obligation of a nature or magnitude which is material or authorised, proposed or announced any intention to do so, where in each such case it is material in the context of the wider Biocompatibles Group taken as a whole;

(vii) other than pursuant to the Acquisition, entered into or varied or proposed to enter into or vary any contract, commitment, arrangement or other transaction which is of a long term or unusual or onerous nature or is otherwise than in the ordinary course of business or announced any intention to do so, that is material in the context of the wider Biocompatibles Group taken as a whole;

(viii) implemented or authorised any reconstruction, amalgamation or other transaction (other than pursuant to the Acquisition) which is, in any case, material in the context of the wider Biocompatibles Group taken as a whole;

(ix) entered into, or varied the terms of, any contract or agreement with any of the directors or senior executives of Biocompatibles in any respect which is, in any such case, material in the context of the wider Biocompatibles Group taken as a whole;

(x) taken or proposed any corporate action or had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any of its assets and revenues or the appointment of any analogous person in any jurisdiction;

(xi) waived or compromised or settled any claim other than in the ordinary course of business, which is material in the context of the business of the wider Biocompatibles Group taken as a whole;

(xii) (other than pursuant to the Acquisition and as envisaged in accordance with the terms of the Scheme), made any amendment to its memorandum or articles of association or other constitutional documents;

(xiii) entered into any contract, transaction or arrangement which is or may be restrictive on the business of any member of the wider Biocompatibles Group or the wider BTG Group in any respect which is, in any such case, material in the context of the wider Biocompatibles Group taken as a whole;

(xiv) been unable or admitted that it is unable to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

(xv) modified in any respect the terms of the Biocompatibles Share Schemes or proposed, agreed to provide, or modified in any respect any other share option scheme or incentive scheme relating to the employment or termination of employment of any person employed by the wider Biocompatibles Group in each case to the extent material in the context of the wider Biocompatibles Group taken as a whole;

(xvi) entered into any licence or other disposal of intellectual property rights of any member of the wider Biocompatibles Group which are material in the context of the wider Biocompatibles Group and outside the normal course of business; or

(xvii) entered into any contract, commitment or agreement or passed any resolution or made any offer (which remains open) with respect to, or proposed or announced any intention to effect or propose any of the transactions or events referred to in this Condition 2.6;

2.7 except as fairly disclosed in the annual report and accounts of Biocompatibles for the year ended 31 December 2009, the half year report of Biocompatibles for the six months ended 30 June 2010, as publicly announced by or on behalf of Biocompatibles (by delivery of an announcement to a Regulatory Information Service) before 19 November, 2010 or as fairly disclosed to BTG before 19 November, 2010, since 31 December 2009:

(i) no litigation, arbitration, prosecution or other legal proceedings including, without limitation, with regard to intellectual property rights used by the wider Biocompatibles Group having been instituted, announced or threatened or become pending or remained outstanding by or against any member of the wider Biocompatibles Group or to which any member of the wider Biocompatibles Group is or may become a party (whether as plaintiff, defendant or otherwise) which in any such case would have a material adverse effect on the wider Biocompatibles Group taken as a whole;

(ii) no adverse change having occurred in the business, assets, financial or trading position, profits or prospects of any member of the wider Biocompatibles Group, which is material in the context of the wider Biocompatibles Group taken as a whole;

(iii) no investigation or enquiry by any Relevant Authority having been threatened, announced, implemented or instituted or remaining outstanding by, against or in respect of any member of the wider Biocompatibles Group, which in any such case would have a material adverse effect on the wider Biocompatibles Group taken as a whole;

(iv) no contingent or other liability in respect of any member of the wider Biocompatibles Group having arisen which would or might materially and adversely affect any member of the wider Biocompatibles Group and which in any such case is material in the context of the wider Biocompatibles Group taken as a whole; and

(v) no steps having been taken and no omissions having been made which would or might result in the withdrawal, cancellation, termination or adverse modification of any licence held by any member of the wider Biocompatibles Group which is necessary for the proper carrying on of its business and which, in any such case, is material in the context of the wider Biocompatibles Group taken as a whole;

2.8 except as fairly disclosed in the annual report and accounts of Biocompatibles for the year ended 31 December 2009, the half year report of Biocompatibles for the six months ended 30 June 2010, as publicly announced by or on behalf of Biocompatibles (by delivery of an announcement to a Regulatory Information Service) before 19 November, 2010 or as fairly disclosed to BTG before 19 November, 2010, BTG not having discovered:

(i) that any business, financial or other information concerning any member of the Biocompatibles Group disclosed, publicly or otherwise at any time to BTG, by or on behalf of any member of the Biocompatibles Group, either contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading and which, in any such case, is material in the context of the wider Biocompatibles Group taken as a whole; or

(ii) that any member of the wider Biocompatibles Group is subject to any liability, actual or contingent, and which, in any such case, is material in the context of the wider Biocompatibles Group taken as a whole.

2.9 except as fairly disclosed in the annual report and accounts of Biocompatibles for the year ended 31 December 2009, the half year report of Biocompatibles for the six months ended 30 June 2010, as publicly announced by or on behalf of Biocompatibles (by delivery of an announcement to a Regulatory Information Service) before 19 November, 2010 or as fairly disclosed to BTG before 19 November, 2010, BTG not having discovered that:

(i) any past or present member of the wider Biocompatibles Group has not complied in all material respects with all applicable legislation or regulations of any jurisdiction with regard to the storage, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or to harm human health or otherwise relating to environmental matters (which non-compliance might give rise to any liability (whether actual or contingent) or cost on the part of any member of the wider Biocompatibles Group) or that there has otherwise been any such disposal, discharge, spillage, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations and wherever the same may have taken place) which in any such case might give rise to any liability (whether actual or contingent) or cost on the part of any member of the wider Biocompatibles Group and which in each case is material in the context of the wider Biocompatibles Group taken as a whole;

(ii) there is or is likely to be any liability (whether actual or contingent) to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the wider Biocompatibles Group or any controlled waters under any environmental legislation, regulation, notice, circular or order of any Relevant Authority or third party or otherwise in any jurisdiction, in each case to an extent which is material in the context of the wider Biocompatibles Group taken as a whole;

(iii) circumstances exist (whether as a result of the Acquisition or otherwise) which might lead to any Relevant Authority instituting or any member of the wider Biocompatibles Group or the wider BTG Group might be required to institute, an environmental audit or take any other steps which in any such case might result in any actual or contingent liability to improve or install new plant or equipment or make good, repair, re-instate or clean up any land or other asset now or previously owned, occupied or made use of or controlled by any member of the wider Biocompatibles Group, which in each case, are material in the context of the wider Biocompatibles Group taken as a whole; or

(iv) circumstances exist whereby a person or class of persons might have any claim or claims in respect of any product or process of manufacture or materials used therein now or previously manufactured, sold or carried out by any past or present member of the wider Biocompatibles Group which in each case, are material in the context of the wider Biocompatibles Group taken as a whole.

PART B

Waiver of Conditions and Further Terms of the Acquisition

3. BTG reserves the right to waive all or any of Conditions 2.3 to 2.9 (inclusive). BTG shall be under no obligation to waive or treat as satisfied any of such Conditions by a date earlier than the date specified above for the satisfaction thereof notwithstanding that the other Conditions of the Acquisition may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any such Conditions may not be capable of fulfillment.

4. The Acquisition will lapse and the Scheme will not proceed if: (a) the Acquisition is referred to the Competition Commission; or (b) the European Commission in respect thereof either initiates proceedings under article 6(1)(c) of Council Regulation (EEC) 4064/89 or makes a referral to a competent authority of the United Kingdom under article 9(1) of that Regulation, in either case, before the date of the Court Meeting.

PART C

Certain further terms of the Acquisition

5. BTG reserves the right, with the consent of the Panel, to seek to implement the Acquisition by way of a takeover offer. In such event, such offer will be implemented on the same terms (subject to appropriate amendments including (without limitation) an acceptance condition set at 90 per cent. (or such lesser percentage (being more than 50 per cent.) as BTG may decide) of the shares to which such offer relates and of the voting rights carried by those shares) so far as applicable, as those which would apply to the Scheme.

6. The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction. Persons who are not resident in the United Kingdom should inform themselves about any applicable requirements. The Partial CVN Alternative will not be offered or available to or for the account or benefit of a person located in the United States or any other jurisdiction where the sale, issue or transfer of the Contingent Value Notes would be in contravention of applicable law. Scheme Shareholders in such jurisdictions will, under the terms of the Scheme, not be permitted to elect for the Partial CVN Alternative.

7. If the Scheme becomes effective, the new Biocompatibles Shares to be issued pursuant to the Scheme will be acquired by BTG fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the Effective Date. Under the terms of the Acquisition, each Biocompatibles Shareholder will forgo all rights to any future dividend or undeclared dividends or other returns of capital of Biocompatibles. 

8. Accordingly, insofar as a dividend and/or a distribution and/or a return of capital is proposed, declared, made, paid or becomes payable by Biocompatibles in respect of a Biocompatibles Share on or after 19 November, 2010 and prior to the Effective Date or, as the case may be, the date on which the Takeover Offer becomes or is declared unconditional in all respects, or prior to the Acquisition lapsing or being withdrawn, BTG reserves the right (at its sole discretion) to reduce the amount of consideration payable under the Acquisition commensurate with such dividend and/or distribution and/or return of capital by adjusting the share exchange ratio, except insofar as the relevant Biocompatibles Share is or will be acquired or transferred pursuant to the Acquisition on a basis which entitles BTG alone to receive the dividend and/or distribution and/or return of capital and to retain it. To the extent that a reduction in the consideration payable pursuant to the Acquisition in respect of a Biocompatibles Share is to apply in respect of a dividend and/or distribution and/or return of capital but that reduction in consideration has not been effected, the person to whom the consideration payable under the Acquisition is paid in respect of that Biocompatibles Share will be obliged to account to BTG for the amount of such dividend or distribution or return of capital.

9. Fractions of New BTG Shares will not be allotted or issued to Scheme Shareholders pursuant to the Scheme. Fractional entitlements to New BTG Shares will be rounded down to the nearest whole number.

10. This announcement and any rights or liabilities arising hereunder, together with the Acquisition and the Scheme, will be governed by English law and will be subject to the jurisdiction of the English Courts. The rules and regulations of the Financial Services Authority and the rules contained in the Code, so far as they are appropriate, will apply to the Acquisition.

APPENDIX II

Bases of Calculation and Sources of Information

1. The value placed by the Acquisition on the existing issued share capital, and other statements made by reference to the existing share capital, of Biocompatibles are based on 39,357,374 Biocompatibles Shares in issue and a fully diluted Biocompatibles Share capital of 41,198,560 Biocompatibles Shares.

2. Unless otherwise stated, the financial information and other information on Biocompatibles included in this announcement has been extracted or derived, without material adjustment, from the audited consolidated annual report and accounts for the Biocompatibles Group for the year ended 31 December 2009.

3. Unless otherwise stated, the financial information and other information on BTG included in this announcement has been extracted or derived, without material adjustment, from the audited consolidated annual report and accounts for the BTG Group for the year ended 31 March 2010.

4. Unless otherwise stated, all historic share prices quoted for Biocompatibles Shares have been sourced from the Daily Official List and represent closing middle market prices for Biocompatibles Shares on the relevant dates.

5. Unless otherwise stated, all historic share prices quoted for BTG Shares have been sourced from the Daily Official List and represent closing middle market prices for BTG Shares on the relevant dates.

6. As at the close of business on 18 November 2010, Biocompatibles had in issue 39,357,374 ordinary shares of 21 and 53/94 pence each.

7. As at the close of business on 18 November 2010, BTG had in issue 257,984,145 ordinary shares of 10 pence each.

Appendix III

Details of Irrevocable Undertakings

1. The following persons, all of whom are Biocompatibles Directors, have given irrevocable undertakings to BTG as described in paragraph 12 of this announcement to vote in favour of the resolutions to be proposed at the Court Meeting and the Biocompatibles GM necessary to approve the Scheme (or, as the case may be, to accept the Takeover Offer) in respect of the number of Biocompatibles Shares set out below (and any further Biocompatibles Shares acquired by them which are attributable to or derived from such shares):

Each of the undertakings given by the above named Biocompatibles Directors shall terminate and be of no further force and effect if:

(i) a Scheme Document or (if, in accordance with the terms of the Implementation Agreement, BTG has elected to implement the Acquisition by way of a Takeover Offer) an Offer Document is not issued prior to 18 December 2010 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree);

(ii) a Scheme Document is issued and the Scheme has not become effective by 24 March 2011 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree) and BTG has not issued an Offer Document; and

(iii) an Offer Document is issued prior to 21 January 2011 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree) and the Offer lapses or is withdrawn.

2. BTG has received an irrevocable undertaking from Hunter Hall Investment Management Ltd as described in paragraph 12 of this announcement to vote in favour of the resolutions to be proposed at the Court Meeting and the Biocompatibles GM necessary to approve the Scheme (or, as the case may be, to accept the Takeover Offer) in respect of 11,443,641 Biocompatibles Shares (and any further Biocompatibles Shares acquired by them which are attributable to or derived from such shares). This undertaking shall terminate and be of no further force and effect if:

(i) a Scheme Document or (if, in accordance with the terms of the Implementation Agreement, BTG has elected to implement the Acquisition by way of a Takeover Offer) an Offer Document is not issued prior to 18 December 2010 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree);

(ii) a Scheme Document is issued and the Scheme has not become effective by 24 March 2011 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree) and BTG has not issued an Offer Document;

(iii) an Offer Document is issued prior to 21 January 2011 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree) and the Offer lapses or is withdrawn;

(iv) Hunter Hall Investment Management Ltd determines, in its absolute discretion, that a material adverse event has occurred in relation to the affairs of BTG; or

(v) an offer is made by a third party for Biocompatibles which Hunter Hall Investment Management Ltd determines, in its absolute discretion, is of a higher value than that proposed by BTG pursuant to the Acquisition.

3. BTG has received an irrevocable undertaking from Invesco Asset Management Limited as described in paragraph 12 of this announcement to vote in favour of the resolutions to be proposed at the Court Meeting and the Biocompatibles GM necessary to approve the Scheme (or, as the case may be, to accept the Takeover Offer) in respect of 8,971,970 Biocompatibles Shares (and any further Biocompatibles Shares which are attributable to or derived from such shares). This undertaking shall terminate and be of no further force and effect if:

(i) a Scheme Document or (if, in accordance with the terms of the Implementation Agreement, BTG has elected to implement the Acquisition by way of a Takeover Offer) an Offer Document is not issued prior to 18 December 2010 (or such other date as BTG and Biocompatibles may, with the consent of the Panel, agree);

(ii) a Scheme Document is issued and the Scheme has not become effective by 24 March 2011 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree) and BTG has not issued an Offer Document;

(iii) an Offer Document is issued prior to 21 January 2011 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree) and the Offer lapses or is withdrawn; or

(iv) an underlying client of Invesco Asset Management Limited terminates their professional relationship and the shares are subsequently sold or transferred.

4. The following persons, all of whom are BTG Directors, have given irrevocable undertakings to BTG and Biocompatibles as described in paragraph 12 of this announcement to vote in favour of the BTG Resolution at the BTG GM in respect of the number of BTG Shares set out below (and any further BTG Shares acquired by them which are attributable to or derived from such shares):

Each of the undertakings given by the above named BTG Directors shall terminate and be of no further force and effect if:

(i) the BTG Circular is not published prior to 18 December 2010;

(ii) a Scheme Document or (if, in accordance with the terms of the Implementation Agreement, BTG has elected to implement the Acquisition by way of a Takeover Offer) an Offer Document is not issued prior to 18 December 2010 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree);

(iii) a Scheme Document is issued and the Scheme has not become effective by 24 March 2011 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree) and BTG has not issued an Offer Document; and

(iv) an Offer Document is issued prior to 21 January 2011 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree) and the Offer lapses or is withdrawn.

5. BTG has received an irrevocable undertaking from Invesco Asset Management Limited as described in paragraph 12 of this announcement to vote in favour of the BTG Resolution at the BTG GM in respect of 67,787,995 BTG Shares (and any further BTG Shares acquired by them which are attributable to or derived from such shares). This undertaking shall terminate and be of no further force and effect if:

(i) the BTG Circular is not published by 18 December 2010;

(ii) a Scheme Document or (if, in accordance with the terms of the Implementation Agreement, BTG has elected to implement the Acquisition by way of a Takeover Offer) an Offer Document is not issued prior to 18 December 2010 (or such other date as BTG and Biocompatibles may, with the consent of the Panel, agree);

(iii) a Scheme Document is issued and the Scheme has not become effective by 24 March 2011 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree) and BTG has not issued an Offer Document;

(iv) an Offer Document is issued prior to 21 January 2011 (or such later date as BTG and Biocompatibles may, with the consent of the Panel, agree) and the Offer lapses or is withdrawn; or

(v) an underlying client of Invesco Asset Management Limited terminates their professional relationship and the shares are subsequently sold or transferred; or

(vi) Invesco Asset Management Limited sells, transfers or disposes of their BTG Shares prior to the BTG GM.

6. BTG has received an irrevocable undertaking from M&G Investment Management Limited as described in paragraph 12 of this announcement to vote in favour of the BTG Resolution at the BTG GM in respect of 37,878,550 BTG Shares. This undertaking will continue to be binding until the completion of the BTG GM.

APPENDIX IV

Definitions

The following definitions apply throughout this announcement unless the context otherwise requires:

The following terms, as explained below, are important to understanding the business of BTG and Biocompatibles: