International Biotechnology Trust

Termination of coverage

7 December 2016

Edison Investment Research is terminating coverage on International Biotechnology Trust (IBT). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. MORE »

Positioned for large-cap biotech recovery

10 May 2016

International Biotechnology Trust (IBT) is a long-established specialist fund investing in listed (c 90%) and unlisted (c 10%) companies in the high-growth area of biotechnology. After several years of strong absolute returns, the past six months have seen a sell-off in the sector, arguably sparked more by political pressure and investor risk aversion than by company fundamentals. While a resumption of bull market conditions is uncertain in the near term, the demographic factors and scientific advances underlying innovation in the sector remain favourable. IBT aims to out-perform the benchmark NASDAQ Biotechnology index and has done so in NAV total return terms over one, three and six months, one and three years and since lead manager Carl Harald Janson took over in September 2013. MORE »

Dual portfolio drives recent outperformance

11 December 2015

International Biotechnology Trust (IBT) is an established investor in the high-growth area of biotechnology. It is differentiated from peers by including unquoted companies (<10% of assets) alongside quoted holdings. The biotech sector seems largely to have shrugged off recent criticism over excessive pricing in some areas and long-term performance has been impressive, with the benchmark NASDAQ Biotech Index up 304% over five years compared with a return of 45% for the FTSE All-Share. IBT has outperformed the benchmark over one and two years under new manager Carl Harald Janson and is top of its peer group for one-year NAV total returns; the discount to NAV, while in line with averages, remains wider than peers, suggesting a relative valuation opportunity. MORE »

Selecting for growth in a growth sector

3 March 2015

Now in its 21st year, International Biotechnology Trust (IBT) is a specialist investor in biotechnology companies globally. In the year to end February 2015, it returned c 50% in NAV and 49% in share price terms, ahead of the Nasdaq Biotechnology Index’s 39% return. IBT is differentiated from its peers by its holdings in unquoted stocks (c 8% at present), a part of the portfolio that has recently contributed to the trust’s strong performance, reflecting successful exits and a milestone payment. The long-term growth drivers for the biotech sector remain in place and the managers expect strong sector earnings growth to outpace market growth over the long term. MORE »

A new manager for the quoted portfolio

20 December 2013

International Biotechnology Trust (IBT) provides investors with exposure to the fast-growing biotechnology market through both quoted (86%) and unquoted investments (14%). Secular drivers, include ageing populations, increasing demand in emerging markets and acceleration in new product development, are encouraging. Sector valuations have expanded but, in the manager's view, are still reasonable with median large-cap biotech estimated PEG ratio standing at c 1.2x. MORE »

Unquoted performance continues to improve

7 June 2013

The biotechnology sector has performed strongly during the last five years and particularly during the last 18 months, when the sector has experienced a re-rating. Recent price gains have moved ahead of earnings growth. However, the manager remains comfortable with valuations arguing that, despite the recent uplift, they remain below longer-term averages and do not look stretched in a historical context. More importantly, the longer-term story of increasing demand from growing and ageing populations, particularly in the western world, and from growth in emerging markets, remain intact. Recent results show that IBT’s quoted portfolio underperformed the NASDAQ Biotechnology Index (NASBIOT) during the 12 months to 28 February 2013, while the valuation of the unquoted portfolio has outperformed. This partly reflects the inclusion of contingent earnout payments (milestone payments) in IBT’s NAV. This has added £3.6m (6.5p per share) to NAV as at 28 February 2013 and brings IBT in line with its venture peers. MORE »

Unquoted performance improving

25 October 2012

The biotechnology sector has performed strongly during the last 12 months reflecting increased investor confidence that profitable biotech companies offer stable and predictable earnings growth, and above average cash flow generation, as well as a wave of well publicised and highly valuable new drugs and technologies emerging. IBT’s quoted portfolio’s NAV (c 77% of the total) has outperformed the NASBIOT during the year to 31 August 2012 (47.8% vs 45.3%), while IBT’s unquoted portfolio’s NAV (c 16%) has increased by 21.7%. During the last three years the unquoted portfolio’s performance has lagged that of the quoted because realisations have been light and considerable unquoted investments were made using the 2007 c-share issue proceeds, which take time to mature. The managers believe realisation activity is picking up. Evidence comes from the sale of EUSA Pharma in H2, which returned £4.8m cash to IBT, adding £2.4m to NAV and providing a 2.0x return on invested capital. This bodes well for the development of the unquoted portfolio’s NAV. MORE »

Quoted portfolio continues to outperform

16 April 2012

International Biotechnology Trust’s (IBT) quoted portfolio has, for the past three years, outperformed the NASDAQ Biotechnology Index. Although the unquoted portfolio (c 16%) has been a drag on overall performance, it is reaching maturity and may provide uplifts on exit, as reflected in the 2011 sale of Cadent to Align Technologies at 3.1x the carrying book value. The manager reports that exit conditions have improved significantly during the past six months, and currently expects five to six actions per year for the next two years, with further events in 2014/15. MORE »

Improved fee structure

25 October 2011

With the recent results announcement, International Biotechnology Trust (IBT) confirmed a reduction in the annual management fee by 20bps to 1.15% of NAV with the aim of reducing the overall TER to below 2.0%. The quoted portfolio performance fee is also being adjusted, to 10% of any outperformance above the NASDAQ (sterling adjusted) Biotechnology Index plus 0.5%. The maximum total performance fee payable in a year falls from 5% of NAV to 3%. For now, the unquoted portfolio continues to act as a break on overall performance. However, IBT has recently successful exited Cadent with a sale to Align Technologies, at 3.1x book value. While recent market conditions have arguably delayed further exits the manager, SV Life Sciences, believes many of the unquoted names are reaching maturity and will provide strong exits, which will give a significant uplift to the unquoted performance. MORE »