Edison issues review on The Biotech Growth Trust

RNS Number : 7460E

Biotech Growth Trust PLC (The)

20 July 2016

 

London, UK, 20 July 2016

Edison issues research review on The Biotech Growth Trust (BIOG)

The Biotech Growth Trust (BIOG) is a specialist investment trust that aims to generate capital growth from a portfolio of global biotech stocks. The fund is concentrated, currently holding 32 positions invested across the market capitalisation spectrum. Over the last 12 months, the industry has been volatile following controversy over US drug pricing and heightened risk aversion. However, the managers believe that industry fundamentals remain intact and companies that develop novel treatments will be able to price their products accordingly. Industry valuations look attractive compared with other sectors and there is evidence of an upturn in merger and acquisition activity. BIOG's recent investment performance has been affected by disappointing data from some holdings, but medium- and longer-term performance remains positive.

BIOG's current share price discount to NAV of 4.8% is broadly in line with the historical averages of the last one, three, five and 10 years (range of 4.3% to 6.2%). There is scope for the discount to narrow if BIOG's near-term performance versus the benchmark improves and/or investor sentiment towards the biotech sector becomes more favourable.

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