Edison issues review on The Biotech Growth Trust

RNS Number : 2326Q

Biotech Growth Trust PLC (The)

15 February 2019

 

London, UK, 15 February 2019

Edison issues review on The Biotech Growth Trust (BIOG)

The Biotech Growth Trust (BIOG) is managed by Geoff Hsu and Richard Klemm at OrbiMed Capital, one of the leading global healthcare asset managers. The year 2018 proved to be tough for the trust's performance as biotech companies delivering negative news were heavily penalised, while those delivering good news went unrewarded. However, the managers are optimistic about BIOG's prospects. They cite a rich industry innovation pipeline that includes a series of technologies with multi-billion-dollar revenue potential; a favourable regulatory environment; and a higher level of deal activity, including major pharma company Bristol-Myers Squibb's recent bid for Celgene (one of BIOG's largest holdings) at a significant premium to its pre-bid share price.

BIOG is trading at a 6.7% discount to cum-income NAV, close to the middle of the 0.8% to 11.3% range over the last 12 months. Over the last one, three, five and 10 years the trust has traded at average discounts of 6.6%, 6.2%, 5.9% and 5.3% respectively. BIOG does not pay a dividend - it aims to generate capital growth and the majority of portfolio companies are early stage and investing for future growth rather than distributing income.  

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