The Biotech Growth Trust (BIOG) has announced its interim results for the six months ended 30 September 2022. Its chairman, Roger Yates, says that after a very difficult year to 31 March 2022, during which the trust’s NAV fell substantially and underperformed its benchmark (the NASDAQ Biotechnology Index), the first six months of the current year have seen BIOG regain some lost ground.
The NAV per share total return was 9.6%, outperforming the rise of 6.8% in the benchmark.
Yates says that a number of factors contributed to this improvement in performance, including increased levels of merger and acquisition (M&A) activity and an improved regulatory and political backdrop in the USA. BIOG’s NAV also benefited from the depreciation in sterling over the period by 15.2% against the US dollar, while the presence of gearing over the period contributed 0.6% to the NAV performance.
BIOG maintained some exposure to “crossover” investments (investments in a company’s last private funding round prior to an initial public offering (“IPO”)) and to Chinese biotech. Investments in China represented 10.3% of the portfolio as at the period end and, despite satisfactory underlying performance, the value of these investments fell as a result of investors’ concerns about China. The manager continues to believe in the high levels of innovation found in the biotechnology sector in China, but the difficult local macroeconomic and regulatory environments are proving to be a deterrent to further investment.
BIOG : Biotech Growth claws back some of its underperformance