International Biotechnology Trust has announced results for the year ended 31 August 2015. Over this period the NAV return was 48.2% which compares very favourably to the return on IBT’s benchmark, NASDAQ Biotechnology Index, which returned 33.6%. The share price did even better as the discount narrowed from 20.5% to 6.0% and shareholders got a return of 75.4%. Biotech was in vogue for most of the period as is evidenced by the sector’s outperformance of the FTSE All-Share Index which returned -2.3%.
Within the portfolio, the quoted portion returned 42.1% while the unquoted portion returned 60.4%.
Despite all this good news, International Biotechnology bought back a quarter of its shares during the year.
The Manager’s report lists the largest positive and negative contributors to performance. Chimerix topped the leader board, adding £6.2m to the value of the fund, followed by Celgene (£5.3m), Incyte Genomics (£5.2m), Pharmacyclics (£5.1m) and Regeneron (5.0m).
On the negative front, Biogen cost the fund £2.3m, Intercept Pharmceuticals £1.3m, Mylan £1.3m, TransEnterix £0.7m and VITAE Pharmaceuticals £0.6m.
Chimerix announced positive progress of its late stage anti-infective programme. Celgene has been executing well on its current franchise that is dominated by the sales of its lead asset Revlimid. Investors were also impressed by Celgene’s strategic move to acquire Receptos, which has the potential to diversify its product mix with an exciting mid stage multiple sclerosis asset. In addition to the Receptos acquisition, Celgene has one of the sectors’ broadest advancing pipelines. Pharmacyclics was acquired by AbbVie for $21bn in March and Incyte continued its successful launch of its lead drug Jakafi as well as announcing strong advances within their extensive drug pipeline. Regeneron benefited from higher than anticipated sales of Eylea and announced strong late stage data in its new approach to tackling high cholesterol. The FDA approved Regeneron’s Praluent in July and the sales launch is set to begin towards the end of the calendar year.
Biogen was impacted by reduced sales expectations of its multiple sclerosis drug Tecfidera. However, on the positive side, Biogen announced early stage data for a treatment for Alzheimer’s disease. It was early data, so expectations should be tempered. However, it showed signals that point to possibly halting the course of the disease. Should this data translate positively in later stage trials, this would be a significant advance for patients suffering from this devastating disease. The sales potential for this programme, if successful, is large and could easily surpass Gilead’s hepatitis C treatment, Sovaldi, which has sales of over $10bn per annum.
IBT : International Biotech reports impressive results