International Biotech records modest rise in NAV in Jan
SV Health-managed International Biotech Trust (IBT) reported a 1.4% rise in NAV and saw a 0.4% rise in its share price in January, according to its latest monthly update. The outcome was a little under the 2% rise in the sterling adjusted value of the NASDAQ Biotechnology Index, which was itself lower than the rise in the index’s true value as a result of the weakening of the US dollar. Growth in NAV was driven by a strong performance for investments in Nektar (+49%), which is now the trust’s third largest holding, as well as Juno (+87%) and Madrigal (+62%), while the main negative contributors were Tesaro (-16%), Puma (-34%) and Halozyme (-7%).
Nektar stock has risen almost continuously since November, when the company first disclosed data from a Phase I study study with its anticancer agent NKTR-214 in combination with Bristol-Myers Squibb’s Opdivo. The stock is now some 2.75 fold higher than its levels in October last year. For Juno, the rise reflected an agreement under which the company will be acquired by Celgene. Madrigal’s shares have risen some seven-fold since September last year, when excitement first took hold about then upcoming results of a Phase II trial of MGL-3196 for non-alcoholic steatohepatitis (NASH) or fatty liver disease. The company reported positive results in December and is expected to confirm these with histology data in the coming months.
Tesaro’s shares have been falling since last February as data emerging from competitors to its PARP inhibitor Zejula showed all agents had broadly similar activity, eroding the drug’s previous competitive advantage. Puma fell following the rejection by European regulators of its breast cancer drug Nerlynx, while Halozyme came under pressure from results from an early-stage study of its lead molecule PEGPH20 in pancreatic cancer. The investment case for Halozyme is driven – although many analysts argue despite little value attribution – by a phase III study currently underway of PEGPH20 in pancreatic cancer, albeit using a different chemotherapy combination to the one in the earlier study.
IBT currently has 67 public company and 25 private company holdings with a top 10 accounting for 40% of its NAV. This makes its portfolio less concentrated than its four nearest peers. The top 10 holdings account for around 66% of NAV for both Biotech Growth Trust (BIOG) and BB Biotech (BION.S) and 55% for both Tekla Life Sciences (HQL) and Tekla Healthcare Investors (HQL) in the US. All five trusts almost exclusively invest in US quoted securities. The table below shows IBT’s top 10 holdings, as of the end of January, with the percentage change in share price in January and in the period from 1 to 26 February in local currency (all US dollars except for Genmab, which is listed in Denmark).
| Holding | % of NAV | % change Jan | % change 1/2-26/2 |
| Biogen | 6.2% | 9.2% | -15.4% |
| Celgene | 4.6% | -3.1% | -5.5% |
| Nektar | 4.4% | 48.59% | 1.8% |
| Regeneron | 4.0% | -8.02% | -3.9% |
| Exelixis | 3.8% | -2.36% | -4.0% |
| Acadia | 3.7% | 0.50% | 5.4% |
| Vertex | 3.6% | 13.13% | -2.7% |
| Adamas | 3.6% | 7.83% | -33.1% |
| Genmab | 3.1% | 6.41% | 15.1% |
| Gilead | 3.1% | 16.54% | -3.4% |