Kingel
01 Jun 2018
HL review [link]
Johandesilva
05 Sep 2017
Re: Long term Core Holding "Volatility is part and parcel of BIO shares"---Agree through politics, however when the stock market crashes these funds hold very well in comparison.
Kingel
15 Aug 2017
BIOG mentioned [link]
dazurtrader
10 Aug 2017
Long term Core Holding I have been building a holding since 2014 and is now 7% of my total. There has been a 250% SP increase in the last 5 years, despite the pull back in 2015-16. Volatility is part and parcel of BIO shares, but their long term value is clear.In 10 years time no current holder will feel disappointed in the performance.Also look at WWH (World Wide Health) which has done even better.
Ripley94
09 Aug 2017
Re: NEW ARTICLE: Time to invest in Biote... Bought these today @ 795p . ( bit of aggro placing yesterday big spread i was told and queuing ! )Didn't like a 797 limit so went for 795 this morning lifted after 6 hours .
Ripley94
06 Aug 2017
Re: NEW ARTICLE: Time to invest in Biotech? **
Stepenwolf
22 Jun 2017
Re: Big increase in SP It's the NASDAQ Biotech index that has shot up in the last 4 days on sentiment in the us market due to Trump giving indications that he would not go after the Pharma companies pricing of drugs. It was up 4% yesterday and 1.3% today.
Kingel
22 Jun 2017
Re: Big increase in SP Other Bio’s are up as well perhaps the tide is turning back in their favour? (here’s hoping)
Brown Bull
22 Jun 2017
Big increase in SP Anyone know why this has increased such a lot in the last week?Has one of the Trust's holdings come good in a big way, perhaps?
Kingel
07 Jun 2017
HL challenging year for the healthcare sector NAV total return of 27.5% compared with 29.2% for the NASDAQ Biotechnology Index Share price total return of 27.9%Sterling’s weakness against the US dollar boosted returns for UK-based investorsBroader economic factors, including the US Presidential election, led to heightened volatility within the sectorOngoing innovation and an improved regulatory environment in the US could prove positive for biotech firms over the long termCompanies in the biotechnology sector faced numerous challenges over the 12 months to the end of March 2017. While shares in the sector delivered an impressive return by the end of the year, the Biotech Growth Trust underperformed its benchmark over the same period.The trust is managed by an experienced, well-resourced team, who have delivered strong returns for investors over the long term. Please remember past performance is not a guide to future returns. While the trust invests in a broad range of companies across the biotech sector, its focus on a single area makes it a riskier proposition than those that invest across multiple sectors and periods of volatility should be expected. The manager also has the flexibility to use gearing (borrowing to invest) and derivatives, which add risk. For these reasons we view this as a higher-risk option, which should only be considered for an already diversified portfolio.Performance reviewThe biotechnology sector experienced considerable volatility in the run up to the US Presidential election in November 2016. Concerns over the sustainability of drug pricing in the US, fuelled by Hillary Clinton’s rhetoric on potential drug price regulation, led to periods of market weakness. However, the unexpected election of Donald Trump as President subsequently caused a positive reaction and dramatic rise in share prices. Sterling’s weakness against the US dollar, to which the trust is largely exposed, also led to improved returns for UK investors.Investments in Celgene, Biogen, Vertex Pharmaceuticals, and Amgen were the leading positive contributors to the trust’s performance during the year. Shares in Incyte also rose as the company’s announcement of a collaboration with Merck, another pharmaceutical firm, was well-received by the market.On the other hand, investments in Impax Laboratories, Achillion Pharmaceuticals, Shire, Ono Pharmaceutical, and Gilead Sciences detracted from returns. Shares in Impax Laboratories were weak after the company released a disappointing set of financial results, while shares in Shire underperformed due to concerns over increased competition in the haemophilia market and a slower-than-expected launch of a product for dry eye.OutlookThe biotechnology sector could continue to face periods of volatility in the short term, amid ongoing uncertainties over drug pricing. Political concerns in the US also means healthcare reform could prove more difficult to implement than expected.The manager believes the biotechnology sector is well-positioned for strong long-term performance, driven principally by an uptick in merger and acquisition activity, attractive valuations and sustained innovation. Donald Trump’s proposal to cut corporate tax rates and streamline the drug approval process, which means effective drugs can reach patients faster, could also prove a tailwind for companies within this higher-risk sector.[link] Growth Trust (1)&utm_content=Test link&theSource=EI0RN&Override=1&sp_mid=54218654&sp_rid=Y29saW5famVybWFpbkBibHVleW9uZGVyLmNvLnVrS0
Kingel
19 May 2017
Stifel Biotech picks Many investors have steered clear of biotechnology investment trusts fearful of a US government intervention on high drug prices. However, Stifel analyst Anthony Stern believes these concerns are overblown.With this in mind, he has highlighted two biotech trusts offering attractive buying opportunities, given their shares trade around 8% below their net asset values.Stern points out that US politicians take issue with 'price gouging' for older, off-patent drugs rather than the new innovative drugs that biotech stocks work on. ‘As evidenced by President Trump’s failed initial attempt to restructure Obamacare, the US healthcare system is complicated and difficult to reform. Any changes are unlikely to be as significant as the market fears, will be slow in coming and are likely to have less of an impact on innovative biotech treatments,’ Stern noted.The analyst believes the longer-term outlook for biotech companies remains positive, supported by ageing demographics and a growing middle class in emerging markets.However, the perceived cloud hanging over the sector has depressed biotech share prices with the six biggest 'mega caps' trading on 13 times forecast earnings (P/E) for this year, below the multiple of 17 that more mainstream US pharmaceuticals stand at.That said, the P/E rating of biotechs rises to 18 when Gilead Sciences (GILD.O) is included.‘It is rare for a sector with higher forecast growth rates to trade at a discount to the wider US market,’ Stern pointed out.Biotech picksStifel’s top pick in the sector is International Biotechnology Trust (IBT) on account of the manager Carl Harald Janson’s strong track record and focus on small and mid cap stocks. This offers investors greater portfolio diversification, says Stern. For example, IBT has 51% of the portfolio in its top 10, while Biotech Growth Trust (BIOG) has 70%.IBT currently trades at an 8% discount to net asset value (NAV) which is slightly narrower than its one-year average of 10.7% and half the level at the height of the uncertainty from the US presidential election last September.The trust has shrugged off a rough three months – in which its share price fell 4% – to return 41.3% in the past year, ahead of the 26.5% 12-month gain in the Nasdaq Biotechnology index. Over five years shareholders have enjoyed an impressive total return of 221.5%, beating the benchmark's gain of 196%, although growth in the underlying portfolio was slightly lower than this at 1992%.‘Since the trust has introduced a dividend (4% of NAV, paid out of capital), the discount has narrowed sharply from 15% to around 9%, and this yield may provide discount support in the current low yield environment,’ Stern said in a recent note to investors.Stifel also has positive outlook for Biotech Growth. Although it has lagged the Nasdaq Biotechnology index and IBT over one, three and five years, the analyst expects its focus on large and 'mega cap' stocks will pay off. This is because Stern believes valuations also look attractive in this space.BIOG currently trades on an 8% discount to NAV, slightly wider than its 12-month average of 6% and well below the 1% premium the shares stood at in December. Over one year its share price is up 18% and 181.4% over five years.‘Unlike the other two biotech funds we cover, we believe there is little discount risk on the trust as the board seeks to protect a 6% discount level and the fund currently trades below this level at a 9% discount,’ Stern noted.Stifel’s optimism does not extend to Swiss-listed BB Biotech (BION), however. Although its NAV performance has been strong over five years, with a 268% return, the analyst has concerns about discount risk. BB Biotech currently trades at a 5% discount.‘We remain cautious about the discount risk as should sentiment to markets change we could see this widen out. We retain our “neutral” rating,’ Stern added.[link]
Kingel
04 Nov 2016
biotech offer 'deal of a lifetime' Ignore noise of US presidential election and buy cheap growth says manager of Biotech Growth and Worldwide Healthcare trustsHealthcare and biotech stocks offer investors the ‘deal of a lifetime’ as the sectors continue to hit by brickbats in the run up to the US presidential election. That's the claim of Sven Borho, head of the OrbiMed equity team that runs the Biotech Growth (BION + Add to favourites ) and Worldwide Healthcare (WWH + Add to favourites ) investment trusts, which specialise in the sector and have had a tough time in the past year as the sector has become a political football in the race to the White House.Pledges by Democrat candidate Hillary Clinton to tackle alleged 'price gouging' by drugs companies and her Republican rival Donald Trump's wish to repeal the current administration's flagship reform Obamacare have turned investors away from the sector.Measured in dollars the Nasdaq Biotech index has fallen by 27% in the past year, although the slide in the pound against the US currency has shielded UK investors from the worst of this with the index down 9.5% in sterling terms.Those concerns continue today with Bernie Saunders, Clinton's former rival for the Democrat nomination, unleashing another attack on the industry and alleging insulin price fixing by US and European companies.Crackdowns and buy pointsBorho said the negative news that started with pharma villain Martin Shrekli hiking drug prices 5000% over year ago had created buying opportunities. The largest US healthcare stocks remained cheap, priced at an average of 13.9 times their earnings (P/E), or profits, he said, while large cap biotech stocks traded at 11.1 times their earnings. contrast, the overall US stock market as measured by the S&P 500 index stood at a multiple of 16 times earnings.‘Every time there is political intervention in healthcare, they are the best buying opportunities in history,’ he said. ‘Relative to history, these are the lowest P/E ratios we have ever seen in the large cap biotech sector.'He added: 'They are the fastest growing companies being treated like they are going into bankruptcy...if you buy companies at 4-5x earnings when they are growing at 15%, that is the deal of an investor’s lifetime.’Although polls are tight, Borho believed Clinton would win the presidency but, like Obama, would have to deal with a Republican Congress. He described that as ‘the Goldilocks scenario’ as it would mean Clinton would not be able to pursue her price fixing agenda. ‘There will be no outright drug price control as that means legislation changes,’ he said. Long-term growthWorldwide Healthcare's share price indicates that investor sentiment may have stabilised. The shares stand around 6% below net asset value (NAV), which is the average discount over one year. In sterling terms the £950 million portfolio has grown by 7.6% in the past year, leaving shareholders with a total return of 7.2%. Both are below the MSCI World Healthcare index which has risen just over 12%, according to figures from Numis Securities. The trust's longer-term performance is much better with five-year NAV growth of 191% driving a shareholder return of 208%, beating the index which has advanced 148%.It's a similar story with Biotech Growth, although its shares are more volatile, reflecting a greater focus on companies engaged in the cutting edge of commercial developments around healthcare research. At yesterday's close the shares stood at a 5.8% discount below NAV. Over one year the £376 million portfolio has fallen 10.8%, although shareholders have done slightly better with a total loss of 9.5%. That's in line with the decline in the Nasdaq Biotech.Over five years, however, the trust has beaten the index with stunning NAV growth of 256% and delivering a total return of 276% to shareholders. The Nasdaq Biotechnology is up 231% over the same period.M&A on holdBorho admitted it had been ‘a tough year’ for Biotech Growth
Kingel
07 Aug 2016
BIOG company valuations attractive Biotech Growth Trust: company valuations attractive Biotech Growth Trust (BIOG) may have been hit by profit-taking among but the underlying companies are still offering strong profits and earnings growth.F&C Managed Portfolio Growth (FMPG) fund manager Peter Hewitt said in his annual report that Biotech Growth Trust was his ‘principal laggard’, falling 23% over the 12 months to the end of May.Biotech Growth has returned 68.6% over the past three years against the Nasdaq Biotechnology benchmark of 70.1%.‘After a stellar run of performance, the biotech sector has come in for profit-taking as investor sentiment has become more risk averse over the course of the year,’ said Hewitt.‘Encouragingly, the underlying operating companies have produced strong profits and earnings growth. Most of these businesses, which are listed in the US, are sizeable companies, often with billions of dollars of revenues and strong balance sheets.‘Valuations, particularly in relation to projected growth which is driven by new products, are attractive[link]
Kingel
01 Aug 2016
That was 'some kind of bubble The past year has been tough for biotech investors but the silver lining from the slump in share prices should be a resurgence in mergers and acquisitions, according to Sven Borho of Orbimed Advisors.In the 12 months to the end of June the Nasdaq Biotechnology index dropped 39% and the XBI composite biotechnology benchmark crashed 51% as investors ran scared from the political heat the sector attracted on the topic of high drugs prices. ‘Yes there was some kind of bubble in biotech!’ Borho told shareholders of Biotech Growth (BIOG + Add to favourites ), the £400 million investment trust he co-manages, at their annual meeting this month.Borho was puzzled by the slump, however, pointing out the decline was worse than the 27% correction in 2011 and the 18% slide in 2008 when the notoriously volatile biotech sector proved relatively resilient during the financial crisis.‘Was last year worse than 2008?’ he asked.Investors don’t need to answer that question, he implied, as they could rely on takeover bids to provide a floor to valuations.‘When investors turn away from the biotech sector there is one sector that does not – large pharma,’ he said referring to the tendency of big drugs companies to swoop on biotech firms when they need to boost their product pipelines.While 2015/16 saw Biotech Growth fall 26% with many of its holdings in the red, Borho said it was telling that nine of its top ten gainers were the result of bids, such as Pfizer’s $5.2 billion purchase of Anacor Pharmaceuticals.Even more significant this month had seen Medivation (MDVN.O) agree to open its books to Sanofi after initially rejecting a $9.3 billion approach from the French pharma giant.‘It’s a kind of price sale that’s going on. The correction has been so severe CEOs are quite shell-shocked. I think they will be prepared to sell. Medivation was never for sale and now it is,’ he added.Borho said the four largest biotech stocks – Gilead, Amgen, Celgene and Biogen – were cheap and traded at a ‘meaningful discount’ to the US stock market. Their 12-month forward price to earnings (P/E) ratio of 11.2 compared to 17 times for the S&P 500, he said.The European Union referendum may already have proved to be a turning point. Biotech stocks and the funds that invest in them have bounced back from the initial panicky sell-off caused by the 'Brexit' vote. In sterling terms the Nasdaq Biotechnology index has jumped 11.7% in the past month, helped by the weakness of the pound against the dollar.Biotech Growth, which is 90% invested in the US, has seen the net asset value of its portfolio jump nearly 19% with the shares up 18%. That still leaves shareholders down 21% over one year although three-year gains look better at nearly 67% and over five-years the total return stands at an impressive 255%, beating the 233% from the index. The shares closed at 6.9% their net asset value on Monday, a slightly wider discount than the average of the past year.Borho reasserted the view from San Francisco-based Orbimed that US politicians will not do anything about drugs pricing, whoever wins the presidential election. That’s partly because of the chronic political log-jams in Washington but also because the scandal of price ‘gouging’ simply doesn’t exist when looked in the context of overall US health expenditure. ‘Drug spending has not meaningfully exceeded 10% of total healthcare costs for over 50 years,’ he said, pointing out that the rate of innovation in cancer therapies and the treatment of rare diseases continued unabated[link]
II Editor
21 Jul 2016
NEW ARTICLE: Time to invest in Biotech? "Drug prices pose an ethical dilemma. On the one hand, treatments should be affordable to those who need them, but on the other, companies will have to finance many failed drug development attempts in order to uncover the successful few, so each ..."[link]
