Biotech Growth Trust Plc (The) (LON:BIOGW) is a specialist vehicle, aiming to generate long-term capital growth via investment in global biotech stocks. Following a particularly volatile period for the biotech industry, where concerns about drug pricing and investor risk aversion have weighed heavily on stock prices, the managers are hopeful that greater clarity regarding US healthcare policy will lead to continued improved performance of biotech stocks. Industry fundamentals remain attractive, including continued innovation and valuations are very supportive, which offers the potential for higher industry merger and acquisition activity.
Investment strategy: Rigorous bottom-up research
BIOG’s managers, Richard Klemm and Geoff Hsu, are able to draw on the deep research experience at OrbiMed Capital to construct a concentrated portfolio of global biotech stocks. Potential investee companies are subject to rigorous fundamental research, including an in-depth analysis of research pipelines; stocks are selected ahead of anticipated positive data, as potential acquisition targets or if they are approaching profitability. BIOG invests across the market cap-spectrum, although around two-thirds of the portfolio is held in major biotech companies. At the time of acquisition, no single position may exceed 15% and gearing of up to 20% of NAV is permitted.
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