News from Frostrow Capital

The Biotech Growth Trust

20 Apr 2007

The Board of The Biotech Growth Trust PLC (the "Company") announces the following changes to the Company's investment management and administration arrangements.

Termination Agreement with Close Investments Limited

The Company has entered into a termination agreement with Close Investments Limited ("Close") and OrbiMed Capital LLC ("OrbiMed") pursuant to which the current management, administration and company secretarial agreement will terminate and the current investment advisory agreement shall be amended so that it will continue in force as though Close were no longer a party (the "Termination Agreement").

The Company has entered into an amended investment management agreement (the "New Investment Management Agreement") with OrbiMed under which OrbiMed will continue to provide discretionary investment management services to the Company under the same terms.

New Management, Administration and Company Secretarial Agreement The Company has entered into a new management, administration and company secretarial agreement (the "New Management, Administration and Company Secretarial Agreement") with Frostrow Capital LLP ("Frostrow"). Frostrow is a new firm established and staffed by former Close executives to provide specialist management, administration, company secretarial and marketing services to investment companies. Frostrow is authorised and regulated in the UK by the Financial Services Authority.

Under the New Management, Administration and Company Secretarial Agreement, Frostrow will receive with effect from 1 July 2007:

• a periodic fee equal to 0.30% per annum of the Company's market capitalisation plus a fixed amount equal to £50,000 per annum.
• a performance fee amounting to 1.5% of any cumulative out-performance of the net asset value over the benchmark index (OrbiMed to receive the balance up to 16.5% of the cumulative out-performance of the Company's investment portfolio over the Company's benchmark, the NASDAQ Biotechnology Index (sterling adjusted), since 30 June 2005).

The notice period on the New Management, Administration and Company Secretarial Agreement will be 12 months.

Comparison with current fee arrangements

The Company's current periodic fee is equal to 1% per annum of the Company's net assets plus a fixed fee of £50,000 to Close. Assuming the market capitalisation equates to NAV, the above new fee arrangements will equate to an aggregate fee equivalent to 0.95% per annum of the Company's net assets (0.3% payable to Frostrow and 0.65% payable to OrbiMed) plus an additional fixed fee of £50,000 per annum.

The calculation basis and cost of the performance fee under the New Investment Management Agreement and the New Management, Administration and Company Secretarial Agreement, is unchanged from the current arrangements.

Timetable and Costs

It is intended that the Termination Agreement and the New Investment Management Agreement and the New Management, Administration and Company Secretarial Agreement will come into effect from 10 April 2007.

The Company and Close have agreed that Close will continue to receive the fees payable under the current management, administration and company secretarial agreement up to and including 30 June 2007. Fees payable under the New Management, Administration and Company Secretarial Agreement will apply from 1 July 2007. There will be no other material costs of termination.