jgrjgr
20 Mar 2015
Re: Rocketing biotech thanks for that - nice to know there is still further to go on top of the stellar performance recently! But how far??
Kingel
19 Mar 2015
Rocketing biotech The good times just keep rolling for biotech: the Nasdaq biotechnology index is up 22.7% since the start of the year, and 217.8% over the last three.But those spectacular numbers hide some high risks. While companies that get it right have seen their share price rise to elevated levels – gene sequencing firm Illumina (ILMN.O) trades on 58 times forecast earnings – share price drops when drugs fail can be equally dramatic.That's why Carl Harald Janson, manager of the International Biotechnology (IBT + Add to favourites ) investment trust, takes a conservative approach to investing in the sector. He prefers to avoid holding companies before crucial phase III trials, when regulators decide if a medicine should be released to the public, for fear of falling foul of one of these 'binary events'.'Companies can lose a lot of value if it doesn't work. We try to avoid such bad events,' he said. 'When there is a big phase III trial, we'd rather sit on the sidelines and watch the event pass so we don't lose money.'That strategy means the trust can miss the immediate jump in shares if a company's drug passes the test, but Janson argues good money can still be made by buying in after the approval.Janson, who joined fund manager SV Life Sciences and took over the trust in September 2013, said he didn't always adopt this approach in 11 years of healthcare investing. 'When I started out, I did what everyone else did – I tried to be smart and read the science [before a phase III trial]. Half the time I was right and half the time I was wrongJanson (pictured), who made his name running the Carnegie Biotechnology fund in Stockholm until 2007, has enjoyed a good run at International Biotechnology. The trust had lagged the Nasdaq biotechnology index before his arrival but since his appointment has outperformed the market, doubling shareholders' money, with investments in unquoted companies helping to improve returns.Unquoted stocks make up around 8% of the portfolio, and towards the end of last year the trust stopped making any new investments in that area. Buyouts have been a driver of some of the trust's strong performance, and that of the biotech sector, but Janson says he does not set out to chase mergers and acquisitions (M&A). 'It's good to have, but it's not like we look to invest in an M&A portfolio,' he said. 'Good companies get acquired.'However, Jansan's investment style leads him to those sorts of situations. 'There are certain boxes I like to tick when investing in this sector,' he said, pointing to management experience at developing and selling previous biotech businesses, and strong intellectual property. The latter can lead to 'a monopoly situation when you get the drug to the market. It's much easier to make a deal later on [with that]'.Janson is optimistic biotech's stellar run can continue. 'We have now a sector that has good prospects on the output side and the demand side,' he said. 'We have had a fantastic run in the last couple of years and multiples have expanded. I think valuations are OK: it's not distinctly cheap, but it's not very expensive.'The trust is slanted towards smaller and medium-sized companies, rather than the big biotech groups, which don't offer the same growth potential. Jansan cites Illumina, the $28 billion (£19 billion) company which is a firm favourite of Scottish Mortgage (SMT + as an example of a blue-chip that is 'fully valued'.[link]
holland44
13 Feb 2015
Re: What caused... I've held BIOG and IBT at different times over the last year, and IBT has outperformed recently, chiefly because of a narrowing of its discount. The MP and Investment Chronicle columnist John Baron holds both trusts in his various portfolios. He talked with IBT's relatively new manager Carol Janson in early 2014, and he discusses its prospects at length under "Trusts of the moment" on his johnbaronportfolios website.I hold BIOG for its long term outperformance, but I also think IBT is worth holding, because of the prospects for Janson to improve performance and for further narrowing of its discount.
Johandesilva
05 Feb 2015
Re: Bubble ? US is still set to rise.
Stepenwolf
26 Jan 2015
Re: Bubble ? Starting to get a nosebleed - 105% increase in 9 months. Surely cannot continue as would defy gravity
Dumbanddumber
14 Jan 2015
Re: Bubble ? Pharma was featured in Shares mag as a sector that could still do well in 2015.Looking at the graphs, maybe some short term profit taking but after that I imagine we will continue upwards IMO.
Stepenwolf
13 Jan 2015
Bubble ? Hi Would be good to share other peoples views as to whether the while Biotech sector is a bubble waiting to bust. This IBT has gone up 99% since April 2014, whilst the other one I have BIOTECH Growth IT has jumped 71% in the same period. Is it time to take profits?
