London, UK, 22 February 2018
Edison issues review on The Biotech Growth Trust (BIOG)
The Biotech Growth Trust (BIOG) aims to generate long-term capital growth from a concentrated portfolio of global biotech companies. It is jointly managed by Richard Klemm and Geoff Hsu of OrbiMed Capital, who are positive on the outlook for the biotech industry due to a favourable regulatory backdrop, continued industry innovation, an anticipated uptick in M&A activity and reasonable company valuations. The trust is benchmarked against the NASDAQ Biotech index, which it has outperformed in NAV total return terms over 10 years, while trailing over shorter periods. Recent investment performance has been affected by negative newsflow from one of BIOG's top 10 holdings, Celgene, in October 2017.
BIOG's share price discount to cum-income NAV has been in a broadly narrowing trend since Q417. The current 3.6% discount is lower than the averages of the last one, three, five and 10 years of 5.5%, 5.8%, 4.9% and 5.3% respectively. The trust employs a discount control mechanism, with the board aiming to limit the discount to 6% in normal market conditions.
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