IBT : International Biotech fee cut
International Biotechnology Trust has announced its results for the year that ended on 31 August 2014. They show the net asset value rising by 26.4% which lags the return on the NASDAQ Biotechnology Index which returned 33.2% in Sterling terms. Shareholders were impacted by a widening of IBT’s discount from 14.1% to 20.5% which meant that the share price rose by 16.9% giving shareholders a return about half that of the benchmark.
The Chairman’s statement points to the 2.6% return generated on IBT’s unquoted investments as being a primary reason for the underperformance and says that the discount is most probably the result of investors taking profits from the sector after a strong run over the past few years.
They have been buying back shares in an effort to stem the widening discount – 825,000 were bought back in the accounting year and 4.27m since the end of August.
The Board has agreed with the manager that the management fee will be cut from 1.15% to 0.9%.
The manager’s report says the stocks that added most to the value of the portfolio were Gilead, Intermune, Biogen Idec, Illumina and Celgene which rose between 20% and 80%, adding £27.7m to the value of the fund. On the downside Aegerion Pharmaceuticals, Celldex Therapeutics, Ariad Pharmaceuticals, AlloCure and NPS Pharmaceuticals were the stocks that lost the most – £7.2m in total with AlloCure being written off completely.