Edison issues review on The Biotech Growth Trust

RNS Number : 9192A

Biotech Growth Trust PLC (The)

24 January 2020

 

London, UK, 24 January 2020

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. They remain optimistic about the prospects for the sector in 2020 due to high levels of innovation and a relaxed regulatory environment, while a continuation in merger and acquisition (M&A) activity would also likely provide further support for biotech shares. The managers are very encouraged by the trust's much-improved investment performance in recent months, noting they are being rewarded by the market for their in-depth fundamental research and portfolio positioning in favour of emerging rather than large-cap biotech stocks. BIOG's NAV has now outperformed the NASDAQ Biotechnology index benchmark over the last one, three, five and 10 years.

BIOG is currently trading at a 9.1% discount to cum-income NAV, which compares to a 5.4% to 7.9% range of discounts over the last one, three, five and 10 years. There is scope for a higher valuation given the meaningful recent improvement in the trust's performance. The board actively repurchases shares, aiming for a maximum 6% discount in normal market conditions. 

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