Biotech Growth notches up small rise in Jan, but outlook for Feb is weaker
Orbimed-managed Biotech Growth Trust (BIOG) notched up a broadly in-line performance in the otherwise strong month of January, despite seeing a major setback for one of its top 10 holdings. However, its outlook for February is looking weaker, an analysis by Marten & Co suggests.
The trust recorded a 1.1% rise in NAV in January with a 1.3% rise in its share price, which compares with a 2% rise in the sterling value of the benchmark NASDAQ Biotechnology Index. Overall, Biotech Growth achieved a mid-range performance in the month among the group of 13 sector-specialists monitored by Marten & Co. Top performing holdings in January were Juno Therapeutics (up 87%) as a result of its acquisition by Celgene and Global Blood Therapeutics (+51.5%) , with three of the companies within the trust’s top 10 also achieving double-digit rises: Vertex (15.4%), Gilead (16.5%) and Bluebird (15.2%). However, Puma Biotechnology fell out of the top 10, after its shares sank by 34% on the rejection by EU regulators of its breast cancer drug neratinib. The contrasting fortunes of the leading investments were highlighted in an earlier Quoteddata.com article.
Looking forward, however, the trust looks like it may record a weak month in February, compounding the across-the-board decline that comes as a result of the stock market sell-off. The trust’s share price is down 4.8% as of 18 February, slightly less than the Nasdaq biotechnology index’s fall of 5.1%. However, the performance of the top 10 suggests the decline in NAV may be proportionally greater. As noted in an earlier Quoteddata.com article, Biotech Growth has an significant overweight position in Biogen, which has fallen heavily as a result of concerns at a recent decision to expand the size of its two large phase III studies of aducanumab for Alzheimer’s disease. Currently, Biogen stock is down 15% on the month, although of course it may yet recover.
Biotech Growth’s top 10 holdings as of 31 January, as reported in the fund’s monthly update, are shown in the table below together with individual stock price performance in January, as well as the change in the period from 31 January to 18 February.
| % NAV | Jan % change | 31/1-18/2 | |
| Biogen | 13.2% | 8.61% | -15.6% |
| Amgen | 9.6% | 6.71% | -1.1% |
| Vertex | 9.3% | 15.43% | -7.1% |
| Celgene | 7.1% | -3.85% | -5.1% |
| Regeneron | 6.4% | -8.02% | -3.9% |
| Gilead | 4.5% | 16.54% | -3.3% |
| Illumina | 4.2% | 5.40% | -0.5% |
| Alnylam | 4.2% | 1.87% | -0.4% |
| Bluebird | 3.5% | 15.24% | 3.9% |
| Alexion | 3.2% | -1.25% | 2.0% |
| BIOG | 1.20% | -4.8% |
Biotech Growth notches up small rise in Jan, but outlook for Feb is weaker