Biotest AG — Interim / Quarterly Report 2010

Aug 12, 2010

Positive perspective despite difficult environment

Q2 10 Key figures*

				Change
Biotest Group		H1 2010	H1 2009	%
Revenue	€ million	227.1	218.4	4.0
thereof: Germany	€ million	52.5	54.6	–3.8
Rest of World	€ million	174.6	163.8	6.6
thereof: Plasma Proteins	€ million	200.6	194.3	3.2
Microbiologial Monitoring	€ million	26.5	24.1	10.0
EBITDA	€ million	37.7	44.1	–14.5
EBIT	€ million	23.7	31.2	–24.0
EBIT in % of revenue	%	10.4	14.3
Earnings before tax	€ million	20.4	25.3	–19.4
Earnings after tax	€ million	14.3	17.5	–18.3
Earnings per share	€	1.11	1.38	–19.6
Cash flow**	€ million	–1.9	3.8	–
Depreciation and amortisation	€ million	14.0	12.9	8.5
		30 June 2010	31 Dec. 2009
Equity	€ million	308.5	269.9	14.3
Equity ratio	%	47.0	42.6
Employees (full-time equivalents)		1,827.5	1,811.6	0.9
* Continuing Operations ** From operating activities

Biotest AG

Q2 10

Content

Interim management report as of 30 June 2010	3
At a glance	3
Corporate strategy and implementation	3
Segments	3
Market environment	3
Business position	4
Earnings position	5
Financial position and statement of assets	6
Research and development	7
Personnel	7
Risk and opportunities report	7
Outlook	7
Events after 30 June 2010	8
Financial statements as of 30 June 2010	9
Statement of income	9
Statement of comprehensive income	10
Statement of financial position	11
Detail information	12
Other information, Assurance by the legal
representatives, Financial calendar	15

Interim management report as of 30 June 2010

AT A GLANCE

In the first six months of 2010, Biotest increased sales in Continuing Operations by 4.0% compared with the first six months of 2009. Earnings before interest and taxes (EBIT) were 24.0% lower than in the reference period in 2009. This development was due in particular to the difficult situation on the plasma proteins market.

The pressure on prices for plasma proteins caused by the supply surplus continued in the second quarter of 2010. The quantity of accumulated raw material for plasma protein preparations (blood plasma) decreased slightly in the first half of the year. Due to the long production cycles and the high level of stocks, we estimate that the stabilisation which is becoming apparent will have no impact on the price situation of the end products during the current year.

Further burdens on Biotest's sales and income are resulting from savings measures for the public healthcare sector which are being discussed or are already at the implementation stage in various European countries.

This development prompted the Board of Management to revise its profit target for the full year. The target of sales growth in the low single-digit percentage range remains unchanged and Biotest is now assuming that the EBIT in Continuing Operations will amount to €45 million (+/–10%).

In addition, Biotest took steps to safeguard its sales and profits at an early stage.

The research and development projects in all segments are proceeding according to schedule. In our development of the monoclonal antibody BT-061, we have completed the preparations for a phase IIb clinical trial in the indication rheumatoid arthritis in the second quarter.

CORPORATE STRATEGY AND IMPLEMENTATION

The restructuring measures necessary in connection with the sale of the Company's transfusion and transplantation diagnostic business had been largely completed by the end of the first half-year 2010.

SEGMENTS

Biotest reports its business and profit development in accordance with the modified segment reporting as adopted in the quarterly report as of 31 March 2010. Unless otherwise stated, all information about the Biotest Group relates to Continuing Operations. This also applies to the comparative figures from 2009.

MARKET ENVIRONMENT

Macroeconomic situation

The recovery in the global economy continued in the first half of 2010. The financial situation in the public sector, on the other hand, was aggravated further; the high debt levels of states and local authorities, as well as their budget deficits, are increasingly becoming the focus of attention worldwide. Several states have adopted or announced huge public spending cuts. In many cases, these encompass the publicly financed healthcare system and therefore have a direct impact on the pharmaceutical industry's market environment.

Plasma Proteins

The long-term trend of growth in demand for blood plasma products was largely stable in the first half of the year; the quantity sold in the first six months of 2010 increased slightly compared with the previous year.

Due to the increasingly strained financing situation in the public healthcare systems and the expectation of further price reductions, however, several customers decided to meet their demand at shorter notice and in smaller tranches.

The high level of supply for finished products continued to put pressure on prices in the second quarter of 2010. This applies in particular to the European market, especially in the polyvalent immunoglobulins segment, and to sales of coagulation products in Eastern Europe.

In the USA, the price level for plasma proteins is higher and generally more stable than in Europe. In the first half of 2010, the quantity sold on the market grew by some 6% compared with the same period in 2009.

The volume of blood plasma collected in the USA decreased slightly in the first half of 2010. This is indicated by the latest available market data (as of March 2010) and findings from our own market analyses. Due to the long production cycles and the high levels of raw material, intermediate product and finished product stocks, however, this has not yet had a stabilising effect on prices of end products.

Changes in the regulatory environment

On 18 June 2010, the German parliament passed the Act to Amend Provisions of Healthcare Insurance Law and Other Provisions (GKV-Änderungsgesetz), which came into effect on 1 August 2010. It forces manufacturers to grant mandatory discounts and a price moratorium in sales of products to the public healthcare system.

For prescription drugs that are not subject to a fixed price arrangement, manufacturers must grant a discount amounting to 16% of the list price. This mandatory discount, which was increased by ten percentage points compared with the previous provision, now applies additionally to prescriptions issued as part of outpatient treatment in hospitals. In addition, the list prices for drugs of this kind returned to their level of 1 August 2009 within the framework of a price moratorium. The mandatory discount and the price moratorium will apply until 31 December 2013.

The Act to Amend Provisions of Healthcare Insurance Law and Other Provisions includes a number of exemptions. In addition, existing discount agreements between the manufacturer and the customer can be offset against the applicable mandatory discount.

Of the Biotest products, all plasma proteins with the exception of the coagulation factors Haemoctin® and Haemonine® are subject to the Act to Amend Provisions of Healthcare Insurance Law and Other Provisions. These provisions will result in an annual burden of some €5-6 million on sales and profits. It is currently being checked whether Biotest can utilise one of the exemptions provided for in the Act.

Microbiological Monitoring

The volume of demand and the price levels for purity and hygiene monitoring products in the pharmaceutical industry remained largely unchanged in the second quarter.

BUSINESS POSITION

In the first six months of 2010, Biotest increased its sales in Continuing Operations by 4.0% compared with the first half of the previous year. Growth in the Microbiological Monitoring segment was especially pronounced, although we also managed to increase our volume of business with Plasma Proteins.

Sales by segment

€ million	H1 2010	H1 2009	Change in %
Plasma Proteins	200.6	194.3	3.2
Microbiological Monitoring	26.5	24.1	10.0
Biotest Group*	227.1	218.4	4.0

* Continuing Operations

Sales totalled €112.1 million in the second quarter of 2010, an increase of 2.7% compared with the corresponding period in 2009 (€109.1 million).

Of total sales, 23.1% was accounted for by Germany in the first half of the current year. This indicates that Biotest has further internationalised its business activities; in the previous year, the proportion of sales generated by Germany had been 25.0%.

Plasma Proteins

The course of business in the first half of 2010 was influenced primarily by the still difficult market situation. While the quantity sold was higher than in the comparable period in the previous year, this growth was offset by negative effects resulting from the downward trend in prices.

Both the quantity of the polyvalent immunoglobulin Intratect® sold and its price level were lower than in the previous year, particularly in Germany. Price levels for hyperimmunoglobulins and albumin declined less and the quantity of hyperimmunoglobulins sold was higher than in the first half of 2009.

In international sales, we were no longer able to sell our factor VIII preparation Haemoctin® in Russia in the quantity and at the price that had been attained in the first half of 2009. In the USA, we have experienced lower sales of the hepatitis B immunoglobulin Nabi-HB®. The main reason for this development is that the number of liver transplantations carried out due to hepatitis B infections decreased. Nabi-HB® is used as part of reinfection prophylaxis during and after such operations.

Microbiological Monitoring

The sales generated with products from the Microbiological Monitoring segment increased by 10.0%. We increased sales both with the products of our affiliated company heipha Dr. Müller GmbH and with those of the product segment Biotest HYCON. Sales in the USA developed particularly pleasingly, a factor which contributed significantly to the positive development of the segment's sales.

In May, the Pyrodetect system was introduced as planned. This test is used to test pharmaceutical products for contamination by fever-inducing pyrogenic substances. This means that Pyrodetect offers an alternative to the test on rabbits which has been used so far. This innovation is received with a great deal of interest in specialist circles and some initial sales have already been generated.

EARNINGS POSITION

In the first six months of 2010, Biotest generated earnings before interest and taxes (EBIT) amounting to €23.7 million in Continuing Operations, a decline of 24.0% compared with the previous year (€31.2 million). The profit margin for the first six months of 2010 was 10.4%, compared with 14.3% in the first half of 2009. The annualised return on capital employed (RoCE) was 7.8% as of 30 June 2010 (30 June 2009: 11.0%).

The decline in earnings results predominantly from lower profitability in business operations with immunoglobulins, from price concessions to be granted for Interact® and for supplies of coagulation factors to Russia, and from increased research and development expenses.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) decreased in comparison to the first half of 2009 (€44.1 million) by 14.5% to €37.7 million.

Earnings before taxes (EBT) at €20.4 million (2009: €25.3 million) declined by 19.4%. This decrease was less compared to the EBIT. This was essentially due to the improved financial result, which in turn was a consequence of lower interest payments. After deduction of income tax, the period profit for the first six months of 2010 was €14.3 million (2009: €17.5 million).

After deducting minority interests, earnings per share amounted to €1.11 in the first half of the year, compared with €1.38 in the corresponding period in 2009.

Including the contribution from the business division to be discontinued – which consists essentially of the profit from the disposal of the transfusion and transplantation diagnostic activities – Biotest's profit after tax for the first half of 2010 amounted to €29.7 million (2009: €16.0 million, +85.6%).

Notes on the main expenses positions

The disproportionate increase in the cost of sales and the accompanying unfavourable development of the cost of sales ratio can be attributed largely to price developments and a changed product mix.

Key cost positions of the Biotest Group*) **)

€ million	H1 2010	% of sales	H1 2009	% of sales
Production costs	–129.0	56.8	–110.0	50.4
Distribution expenses	–33.6	14.8	–36.4	16.7
Administrative expenses	–16.8	7.4	–16.5	7.6
Research and development expenses	–26.0	11.4	–21.9	10.0
Other operating income and expenses	2.0	0.9	–2.4	1.1
Financial result	–3.3	1.5	–5.9	2.7

*) Continuing Operations

**) Expenses are marked with a negative prefix

The substantial reduction in distribution expenses was to a large extent the result of lower commission payments.

In the first six months of 2010, research and development expenses were significantly higher than in the same period last year. This increase reflects the progress being made by our projects. For example, the ongoing development projects with plasma proteins (IgM concentrate, Cytotect® during pregnancy, and others) were intensified as planned. In addition, the costs incurred by Biotest Pharmaceutical Corporation (BPC) for the production of consistency lots required for the approval of the immunoglobulin BivigamTM are included in R&D expenses. In the Biotherapeutic segment, further clinical trials were prepared or initiated.

Other operating income in the first six months of 2010 amounted to €3.9 million and resulted largely from the release of provisions and from other income not related directly to the period. This compares with other operating expenses of €1.9 million in the first half of the year which are attributable mainly to deferrals.

Earnings position by segment

EBIT in the Plasma Proteins segment amounted to €35.6 million in the first six months of the current year; this represents a decline of 16.8% compared with the first half of 2009 (€42.8 million). EBIT in the Microbiological Monitoring segment, on the other hand, was up by 32.0% from €2.5 million to €3.3 million.

FINANCIAL POSITION AND STATEMENT OF ASSETS

Financing strategy

There have been no changes in the Biotest Group's financing strategy compared with the Annual Report 2009 and the interim management report as of 31 March 2010. The cornerstones of this strategy are to maintain an equity ratio of at least 40%, to safeguard debt financing by means of long-term loan agreements and to ensure sufficient liquidity at all times. For the preliminary and interim financing of its sales, Biotest has recourse to short-term loans.

Capital expenditure and depreciation and amortisation

Biotest's capital expenditure amounted to €11.0 million (2009: €19.6 million) in the first six months of 2010. €10.6 million of this sum was accounted for by capital expenditure on property, plant and equipment; the major projects were investments in the expansion of plasma protein production at our BPC plant in Boca Raton and in reconstruction work at Dreieich.

Compared to capital expenditure, depreciation and amortisation amounted to €14.0 million (2009: €12.9 million).

Cash flow

Cash flow from operating activities in Continuing Operations in the first six months of 2010 was €–1.9 million (2009: €3.8 million). This decrease can be attributed to the development of earnings coinciding with a higher level of working capital.

The cash outflow for investing activities amounted to €11.0 million (2009: €18.6 million), while the cash inflow from financing activities, at €12.8 million, remained approximately at the previous year's level (2009: €12.6 million). As of 30 June 2010, Biotest held cash and cash equivalents totalling €6.8 million, compared with €6.7 million on 1 January 2010.

Including the contribution by the Discontinued Operation, Biotest Group's cash flow from operating activities totalled €13.5 million in the first half of the year, compared with €0.5 million in the corresponding period last year.

Asset position

The Biotest Group's total assets as of 30 June 2010 were €656.1 million, or slightly above the €633.5 million reported for the end of the financial year 2009.

With respect to current assets, the disposals carried out in January 2010 in the course of the sale of its transfusion and transplantation diagnostic activities were offset by an increase in trade receivables. This reflects the fact that we have used the sale proceeds to scale down our use of factoring, among other things.

The increase in equity compared with the end of 2009 is attributable to the high aggregate earnings, which contain effects arising from currency translation in the Group. The decrease in current financial liabilities results from the lower utilisation of the available credit lines, which was a consequence of the inflow of funds from the sale of the transfusion and transplantation diagnostic activities.

RESEARCH AND DEVELOPMENT

Plasma Proteins

In the second quarter of 2010, Biotest either started or finalised the preparation for further clinical trials for various plasma proteins products.

In May 2010, the documents for the approval of a clinical trial for Intratect® in a 10% solution were submitted to the authorities. The trial will be carried out to test the tolerability of higher infusion rates, among other things.

In the phase III clinical trial for subcutaneous application of our hepatitis B hyperimmunoglobulin for neonates which is currently being developed. Recruitment was successfully completed with 35 patients. For the product with the brand name Fovepta®, Biotest is first aiming for approval in Germany in the indication of prophylaxis in newborns. Marketing in international markets will follow.

In a further trial with the subcutaneously applied hepatitis B immunoglobulin Zutectra®, the intention is to examine the convenience and safety of self-medication at home. Here too, the recruitment process was completed; some 70 patients were included in the trial in centres in Italy.

Microbiological Monitoring

The development work for the expansion and improvement of the equipment line for environment monitoring was near to completion at the middle of the year. It is anticipated that the newly developed equipment will be launched on the market in the fourth quarter of 2010.

Biotherapeutics

The development of the three monoclonal antibodies is proceeding according to plan. Good results were obtained and new patents were granted. For more information on this please refer to the chapter headed "Events after 30 June 2010" on page 8.

We are presenting details of our findings from the development of monoclonal antibodies to medical scientists at conferences and other events. At the Annual European Congress of Rheumatology 2010 in June, hosted by the European League Against Rheumatism (EULAR), we presented pre-clinical data on BT-061 and initial clinical data in the indication plaque psoriasis.

PERSONNEL

As of 30 June 2010, the number of full-time equivalent employees in the Biotest Group's Continuing Operations was 1,827.5. This was a slight increase compared with 31 December 2009 (1,811.6).

Board of Management contracts prolonged

At its meeting on 11 June 2010, the Supervisory Board prolonged the contracts of the Board of Management's two members. The contract with Prof. Dr. Gregor Schulz will run until 31 December 2013, the contract with Dr. Michael Ramroth was prolounged until 31 December 2015.

RISK AND OPPORTUNITIES REPORT

Risks

The risk position in the Biotest Group has changed in one respect compared with the position described in the 2009 Annual Report (pages 68 to 76). The sales market risks have increased. If more countries intervene in the market with mandatory discounts, price moratoriums or similar measures, pressure on price levels on the global market and therefore on Biotest's sales and income could result.

The Greek government has suggested to representatives of the pharmaceutical industry to settle its accumulated obligations partly with cash payments and partly by issuing non-interest-bearing government bonds with different terms to maturity. If such an arrangement were actually to take effect, it would have a significant negative impact on the Biotest Group's financial result.

The adjusted sales and earnings targets for the financial year 2010 already take account of the regulatory changes in Germany.

Opportunities

The Biotest Group's opportunities position still conforms to the description given in the 2009 Annual Report (pages 81 and 82).

OUTLOOK

In view of the situation on the market and the changes in the regulatory environment, the Board of Management feels obliged to reduce the earnings target it had previously announced for the financial year 2010. Biotest is still committed to sales growth in the low single-digit percentage range compared with the previous year.

Biotest's EBIT target is now €45 million (+/–10%). This relates to Continuing Operations. In its Discontinued Operation, Biotest will report a positive EBIT due to the sale of its transfusion and transplantation diagnostic activities, which so far was €18.4 million.

The adjusted targets are based on the assumption that the price level for plasma proteins will stabilise at a low level in the course of the year.

Expected economic environment

The level of market demand for plasma proteins will increase globally in line with the long-term trend, we believe. The high availability of end products, however, will continue to put prices under pressure in the current year. This applies in particular to polyspecific immunoglobulins in Europe and to a lesser extent in the USA.

We estimate that prices for hyperimmunoglobulins, albumin and coagulation factors will remain largely stable and not decline any further in the current year.

In line with our market observations, we assume that the amount of blood plasma offered on the market will continue to decrease slightly by the end of the year. However, this will not have any positive effect on the prices of finished products in the short term on account of the long product cycles and the large inventory of intermediate and finished products.

The obligations resulting from the Act to Amend Provisions of Healthcare Insurance Law and Other Provisions are having a dampening effect on the sales and income that Biotest generates in Germany.

Expected business development

In the financial year 2010, Biotest will slightly increase its sales in the Plasma Proteins segment compared with the previous year's figure. We estimate that sales with products from the Microbiological Monitoring segment will increase significantly compared with the previous year.

Expected financial position

Biotest will finance capital expenditure planned for the remainder of the year from cash flow from operating activities before changes in working capital. The amount of current working capital credit lines available is sufficient to cover any changes in working capital.

Further stages in research and development

In October 2010, Biotest intends to start a post-approval trial for Zutectra® in which the application of the hepatitis B immunoglobulin in subcutaneous administration is to be examined in everyday use. The protocol for this trial was approved by the European Medical Association (EMA).

Patient recruitment has been completed for the second part of the phase II combination study of BT-061 with methotrexate (MTX) in the indication rheumatoid arthritis. The treatment (40 patients, 50 mg BT-061 + MTX) will be finalised in the third quarter of 2010.

The findings from the completed clinical trial no. 962 (see below) constitute the basis for the launch of a phase IIb clinical trial in the rheumatoid arthritis indication (trial no. 979). In the placebo-controlled trial, the drug will be administered subcutaneously in three different dosage groups. The objective of this trial is to establish the statistical basis for a pivotal trial by treating a large patient population (around 175 patients) in the optimum dosage range.

EVENTS AFTER 30 JunE 2010

In August 2010, Biotest published efficacy data from a phase IIa clinical trial with BT-061 in the indication rheumatoid arthritis (trial no. 962). The findings confirm the data that has been obtained so far. The analysis of the data gathered from a large patient population shows that BT-061, despite the short treatment period of six weeks, leads to a significant improvement in symptoms. In comparison with the biological therapies currently being used, the results are highly promising.

Also in August 2010, Biotest reported that another key patent for BT-061 was granted. This means that the monoclonal antibody is now comprehensively protected in the most significant pharmaceutical markets of Europe, the USA and Japan, for example from direct competition from generic drugs.

The last patient was included in the ongoing phase I clinical trial with the monoclonal antibody BT-062 in July 2010. The findings show that treatment with BT-062 can slow down the course of disease very effectively in critically ill myeloma patients. In few patients, moreover, the treatment achieved a partial clinical response. In July, on the basis of this data, a further trial was launched in the USA, in which BT-062 is being administered in a more intensive dosage scheme, as scheduled.

Statement of income

of the Biotest Group

€ million	Q2 2010	Q2 2009	H1 2010	H1 2009
Revenue	112.1	109.1	227.1	218.4
Production costs	–66.2	–54.5	–129.0	–110.0
Gross profit	45.9	54.6	98.1	108.4
Other operating income	2.6	1.9	3.9	2.9
Distribution expenses	–15.5	–17.3	–33.6	–36.4
Administrative expenses	–8.9	–7.9	–16.8	–16.5
Research and development expenses	–12.3	–11.7	–26.0	–21.9
Other operating expenses	–0.4	–3.4	–1.9	–5.3
Operating profit	11.4	16.2	23.7	31.2
Financial result	–1.2	–2.8	–3.3	–5.9
Profit before tax	10.2	13.4	20.4	25.3
Income tax	–3.4	–3.9	–6.1	–7.8
Profit after tax from Continuing Operations	6.8	9.5	14.3	17.5
Profit after tax from the Discontinued Operation	0.3	–1.2	15.4	–1.5
Profit after tax	7.1	8.3	29.7	16.0
thereof:
Retained earnings attributable to equity holders of the parent company	6.5	7.6	28.5	14.7
thereof from Continuing Operations	6.2	8.8	13.1	16.2
thereof from Discontinued Operation	0.3	–  1.2	15.4	–1.5
thereof:
Minority interest	0.6	0.7	1.2	1.3
thereof from Continuing Operations	0.6	0.7	1.2	1.3
thereof from Discontinued Operation	0.0	0.0	0.0	0.0
Earnings per share in € (Continuing Operations)	0.53	0.75	1.11	1.38
Earnings per share in € (Discontinued Operation)	0.02	–0.10	1.31	–0.13
Earnings per share in € (Biotest Group)	0.56	0.65	2.43	1.25

Statement of comprehensive income

of the Biotest Group

€ million	H1 2010	H1 2009
Profit of the period	29.7	16.0
Currency translation effects of international subsidiaries	13.2	–1.1
Total deferred taxes on income and expenses recognised in equity	0.0	0.0
Income and expenses recognised in equity	13.2	–1.1
Comprehensive income	42.9	14.9
Income and expenses recognised in equity	13.2	–1.1
thereof from Continuing Operations	13.2	–1.1
thereof from the Discontinued Operation	0.0	0.0
Profit for the period	29.7	16.0
thereof from Continuing Operations	14.3	17.5
thereof from the Discontinued Operation	15.4	–1.5
Comprehensive income	42.9	14.9
thereof from Continuing Operations	27.5	16.4
thereof from the Discontinued Operation	15.4	–1.5
thereof:
Retained earnings attributable to equity holders
of the parent company	41.7	13.6
thereof from Continuing Operations	26.3	15.1
thereof from the Discontinued Operation	15.4	–1.5
MInority interest	1.2	1.3
thereof from Continuing Operations	1.2	1.3
thereof from the Discontinued Operation	0.0	0.0
Comprehensive income	42.9	14.9
thereof from Continuing Operations	27.5	16.4
thereof from the Discontinued Operation	15.4	–1.5

Statement of financial position

of the Biotest Group

€ million	30 June 2010	31 December 2009
ASSETS
Intangible assets	72.1	66.7
Property, plant and equipment	226.8	214.2
Financial lease assets	16.9	17.8
Investments in affiliates	0.1	0.1
Investments in associates	0.8	0.8
Other financial investments	0.2	0.2
Other assets	1.7	2.2
Deferred tax assets	4.3	6.2
Non-current assets	322.9	308.2
Inventories	170.4	170.3
Trade receivables	130.8	96.0
Current income tax assets	4.2	3.7
Other assets	18.9	17.1
Cash and cash equivalents	6.8	6.7
Discontinued Operation	2.1	31.5
Current assets	333.2	325.3
TOTAL ASSETS	656.1	633.5
EQUITY AND LIABILITIES
Subscribed capital	30.0	30.0
Share premium	153.3	153.3
Reserves	90.4	55.8
Retained earnings attributable
to equity holders of the parent company	28.5	25.7
Shareholders' equity MInority interests	302.2 6.3	264.8 5.1
Total equity	308.5	269.9
Provisions for pensions and similar obligations	48.4	48.3
Other provisions	3.4	3.6
Financial liabilities	163.9	153.7
Other liabilities	0.4	0.4
Deferred tax liabilities	9.3	8.8
Non-current liabilities	225.4	214.8
Other provisions	14.3	19.6
Current income tax liabilities	6.1	7.8
Financial liabilities	29.9	50.8
Trade payables	41.6	40.6
Other liabilities	29.6	21.0
Discontinued Operation	0.7	9.0
Current liabilities	122.2	148.8
Total liabilities	347.6	363.6
TOTAL EQUITY AND LIABILITIES	656.1	633.5

Statement of changes in equity

€ million	2010	2009
Equity as of 1 January	269.9	253.4
Dividend payments to shareholders	–4.3	–3.8
Earnings after tax	29.7	16.0
Differences from currency translation	13.2	–1.1
Equity as of 30 June	308.5	264.5

Cash flow statement

	Continuing Operations			Discontinued Operation		Biotest Group
€ million	2010	2009	2010	2009	2010	2009
Cash flow
Cash flow from operating activities	–1.9	3.8	15.4	–3.3	13.5	0.5
Cash flow from investing activities	–11.0	–18.6	22.3	–0.9	11.3	–19.5
Cash flow from financing activities	12.8	12.6	–37.7	4.2	–24.9	16.8
Cash changes in cash and cash equivalents	–0.1	–2.2	0.0	0.0	–0.1	–2.2
Exchange rate-related changes	0.2	–0.4	0.0	0.0	0.2	–0.4
Cash and cash equivalents as of 1 January	6.7	8.1	0.0	0.0	6.7	8.1
Cash and cash equivalents as of 30 June	6.8	5.5	0.0	0.0	6.8	5.5

Schedule of assets – net presentation

€ million	Book value as of 1 January 2010	Capital expenditure	Net disposals	Depreciation	Currency translation differences	Book value as of 30 June 2010
Intangible assets	66.7	0.4	–0.1	–3.4	8.5	72.1
Tangible assets	232.0	10.6	–1.1	–10.6	12.8	243.7
Total	298.7	11.0	–1.2	–14.0	21.3	315.8

Segment reporting

by business segment

€ million	H1 2010	H1 2009	Change in %
Revenue
Plasma Proteins	200.6	194.3	3.2
Microbiological Monitoring	26.5	24.1	10.0
Continuing Operations	227.1	218.4	4.0
Discontinued Operation	1.2	20.8	–94.2
Biotest Group	228.3	239.2	–4.6
EBIT
Plasma Proteins	35.6	42.8	–16.8
Microbiological Monitoring	3.3	2.5	32.0
Corporate/Reconciliation	–4.8	–5.3	9.4
Biotherapeutics	–10.4	–8.8	–18.2
Continuing Operations	23.7	31.2	–24.0
Discontinued Operation	18.4	–1.5	–
Biotest Group	42.1	29.7	41.8

Segment reporting

by region

€ million	H1 2010	H1 2009	Change in %
Revenue
Germany	52.5	54.6	–3.8
Europe (excluding Germany)	87.0	88.0	–1.1
North and South America	24.4	24.3	0.4
Asia	56.9	46.4	22.6
Rest of World	6.3	5.1	23.5
Continuing Operations	227.1	218.4	4.0

Employees

by business segment

	30 June 2010	31 December 2009	Change in %
Employees (full-time equivalents)
Plasma Proteins	1,450.9	1,438.8	0.8
Microbiological Monitoring	297.9	291.3	2.3
Corporate/Reconciliation	21.0	23.4	–10.3
Biotherapeutics	57.7	58.1	–0.7
Continuing Operations	1,827.5	1,811.6	0.9
Discontinued Operations	23.7	278.7	–91.5
Biotest Group	1,851.2	2,090.3	–11.4

Employees

by operating division (Continuing Operations only)

	30 June 2010	31 December 2009	Change in %
Employees (full-time equivalents)
Distribution	313.7	300.3	4.5
Administration	244.4	220.7	10.7
Production	1,096.2	1,118.6	–2.0
Research and development	173.2	172.0	0.7
Continuing Operations	1,827.5	1,811.6	0.9

Quarter-to-quarter comparison

by business segment

€ million	Q2 2010	Q1 2010	Q4 2009	Q3 2009	Q2 2009
Revenue
Plasma Proteins	98.7	101.9	95.8	100.0	96.9
Microbiological Monitoring	13.4	13.1	12.2	12.2	12.2
Continuing Operations	112.1	115.0	108.0	112.2	109.1
Discontinued Operation	0.5	0.7	11.1	10.5	10.7
Biotest Group	112.6	115.7	119.1	122.7	119.8
EBIT
Plasma Proteins	17.6	18.0	25.5	20.9	23.0
Microbiological Monitoring	1.6	1.7	0.6	1.4	1.2
Corporate/Reconciliation	–2.5	–2.3	–3.9	–1.8	–2.9
Biotherapeutics	–5.3	–5.1	–7.9	–4.4	–5.1
Continuing Operations	11.4	12.3	14.3	16.1	16.2
Discontinued Operation	0.3	18.1	–1.5	–0.1	–1.1
Biotest Group	11.7	30.4	12.8	16.0	15.1
EBT (Continuing Operations)	10.2	10.2	10.7	13.1	13.4

OTHER INFORMATION

Accounting principles

The interim report as of 30 June 2010 has been prepared in accordance with the International Financial Reporting Standards of the International Accounting Standards Board (IASB). There have been no changes with regard to the accounting and valuation methods used compared with those used in the consolidated financial statements for 2009. The interim management report and interim financial statements are neither audited nor are they subject to review by an auditor.

No major transactions were concluded with related parties in the period under review.

Assurance by the legal representatives

(Declaration in accordance with Section 37y No. 1 of the German Securities Trading Act (WpHG) in conjunctionwith Section 297 (2) clause 3 and Section 315 (1) clause 6 of the German Commercial Code (HGB))

To the best of our knowledge, and in accordance with the applicable accounting standards for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and that the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.

Dreieich, 12 August 2010 Biotest Aktiengesellschaft

The Management Board

Prof. Dr. Gregor Schulz Dr. Michael Ramroth Chairman of the Chief Financial Officer Management Board

Financial calendar

8 November 2010	Autumn conference for analysts
	and journalists
8 November 2010	III. Quarterly Report 2010
22 March 2011	Annual Press Conference
10 May 2011	I. Quarterly Report 2011
12 May 2011	Annual General Meeting
11 August 2011	II. Quarterly Report 2011
	10 November 2011 Autumn conference for analysts
	and journalists
	10 November 2011 III. Quarterly Report 2011

Biotest AG, Landsteinerstr. 5, D-63303 Dreieich, Germany, P.O. Box 10 20 40, D-63266 Dreieich, Germany Tel. +49 (0) 6103 801-4406, Telefax +49 (0) 6103 801-347 e-mail: investor_relations@biotest.de, www.biotest.com

This quarterly report contains forward-looking statements on overall economic development as well as on the business earnings, financial and asset situation of Biotest AG and its subsidiaries. These statements are based on current plans, estimates, forecasts and expectations of the company and thus are subject to risks and elements of uncertainty that could result in deviation of actual developments from expected developments. The forward-looking statements are only valid at the time of publication of this quarterly report. Biotest does not intend to update the forward-looking statements and assumes no obligation to do so.