Biotech Growth Trust swaps out Celgene and Alexion for Amgen
OrbiMed, the manager of the UK’s Biotech Growth Trust BIOG, has boosted the trust’s investment in Amgen at the expense of previous long-term holdings in Celgene and Alexion over the last month, according to the November portfolio update. Amgen is now the trust’s joint second largest investment (at 10% of NAV), behind that of Biogen (at 13.5%). Amgen’s stock fell by around 6% in November which presumably OrbiMed saw as a buying opportunity, while Celgene – previously its top holding – has been trimmed from 13.5% to 10%. Alexion, which accounted for 7.8% of the NAV at the end of October, no longer features in the November top 10. Both Celgene and Alexion’s stock prices were broadly flat in November, although Celgene’s had fallen by 40% in October as a result of an unexpected late-stage clinical trial setback and fierce price competition in a key franchise. The move could suggest OrbiMed is concerned the consensus for both these companies’ near term outlooks are still too positive, while believing the prospects for Amgen are under-recognised.
Amgen expects so-called biosimilars – effectively generic versions of biological drugs such as antibodies – to become an important mid-term growth driver. The company has an approved biosimilar version of Roche’s blockbuster cancer drug Avastin called Mvasi, which is expected to be launched – pending originator patent expiries – in 2019. The company has also been highlighting its Bispecific T-cell engager or “BiTE” antibody platform recently, in particular the anti-BCMA BiTEs, AMG 420 and AMG 701, which are both in Phase 1 for multiple myeloma.
Orbimed’s Richard Klemm and Geoff Hsu (pictured) said that Bluebird Bio, Illumina and Juno Therapeutics were the top positive contributors to the Trust’s performance during the month, while Puma Biotechnology under-performed due to disappointing sales of cancer drug Nerlynx in its first quarter on the market. Biotech Growth’s stock price fell by c6% in November, relative to a slight increase in the (US-dollar denominated) Nasdaq Biotechnology Index (NBI), although longer term performance has been consistently good. Indeed, Biotech Growth’s discount remains tight at c2%.
BIOG : Biotech Growth swaps out Celgene and Alexion for Amgen