London, UK, 9 September 2021
Edison issues review on The Biotech Growth Trust (BIOG)
The Biotech Growth Trust (BIOG) is managed by Geoff Hsu of OrbiMed Capital, which is a specialist healthcare investor with 11 offices across the globe including in Hong Kong and Shanghai. The manager remains very positive on the outlook for the biotech sector primarily due to the current elevated level of industry innovation that he refers to as a 'golden era'; the number of late-stage pipeline products increased by 50% between 2015 and 2020. He also believes that biotech stocks will be supported by ongoing merger and acquisition (M&A) activity, levels of which have remained robust despite the pandemic as there is high demand from larger-cap healthcare companies seeking to boost their pipelines.
BIOG's shares are currently trading at a 7.5% discount to cum-income NAV, which compares to a range of a 3.5% premium to an 8.4% discount over the last 12 months and is wider than the 0.6% to 5.2% range of average discounts over the last one, three, five and 10 years. There is potential for a narrower discount if the trust's FY22 performance improves or if there is an increased focus on the biotech industry's positive fundamentals.
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