BTG, the FTSE 250 intellectual property group, faces a two-year delay in launching its ground-breaking treatment for varicose veins after US trials were put on hold because of the risk of blood clots.

The company said that it would take 12 months to examine safety concerns raised by the US Food and Drug Administration (FDA) about Varisolve, BTG’s biggest drug hope, and a further year to repeat key tests. Regulatory approval for the treatment could be as far away as 2007.

The news sent shares in BTG falling 24p, or 12 per cent, to 171p yesterday. When reports of a potential delay to Varisolve’s launch first surfaced last month, the stock plunged 59 per cent.

Varisolve, which some analysts predicted could generate annual sales of up to $1 billion, is a non-surgical solution that injects foam into varicose veins. The world’s 150 million sufferers could thus have their veins treated during a lunch hour, but the treatment raises medical risks such as deep-vein thrombosis or air bubbles in the blood.

Ian Harvey, BTG’s chief executive, said that the company would meet European Union regulators and the FDA within five weeks.

Erling Refsum, an analyst at Nomura, estimated that the delay would cost BTG about £50 million. He said that BTG would need to clarify plans for Provensis, the subsidiary that develops Varisolve, next year.

BTG reported interim pre-tax losses at £13.4 million, down from £13.6 million a year ago. Revenues jumped 35 per cent to £19.1 million. Mr Harvey said that the core business was on track to break even by 2005-06.