Biotech Growth Trust PLC on Thursday said its net asset value decreased with a negative return in its latest half year, lamenting the ‘challenging backdrop’ for its particular portfolio.

The London-based investor in global biotechnology companies said its NAV at September 30 was 817.9 pence per share, down from 852.6p at March 31.

Biotech Growth Trust shares were down 1.3% at 734.30p in London on Friday afternoon.

The company said it delivered a negative 4.1% total return for the six months that ended on September 30, underperforming the Nasdaq Biotechnology Index which delivered negative 3.0%. This was in sharp contrast to the first half of financial 2022, when Biotech Growth’s total return was positive 9.6% while the benchmark posted a smaller positive 6.8% return.

Biotech Growth’s cash balance at September 30 was £3.1 million, up from zero at the same time one year prior. It swung to a £13.7 million pretax loss for the half year, following a £37.0 million profit.

‘The continuing difficult economic environment, rising cost of capital and associated investor caution all provided a challenging backdrop for a portfolio heavily weighted to small and mid sized biotechnology stocks,’ said Chair Roger Yates. ‘It is an environment which has persisted for some 18 months and lies at the heart of the recent poor performance of our company.’

Going forward, Yates said the current macroeconomic climate is still ‘extremely challenging’, but that ‘confidence can be found in the exciting range and pace of innovation in the biotech sector’.

‘The pace of innovation is accelerating and there is a robust pipeline of therapies based on a wide variety of scientific and technological developments,’ he continued. ‘The challenge of the forthcoming ’patent cliff’ faced by larger biopharmaceutical companies is an opportunity for the emerging biotech companies in which your company is invested and we expect to see a further increase in merger and acquisition activity.’

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