London, UK, 4 April 2022
Edison issues review on The Biotech Growth Trust (BIOG)
The Biotech Growth Trust (BIOG) is managed by Geoff Hsu at healthcare specialist OrbiMed Capital, and benefits from OrbiMed's presence in 11 offices across the globe. While the trust has had a weak period of absolute and relative performance over the last 12 months, the manager believes that the focus on emerging biotech (smaller-cap) and emerging market biotech stocks is the correct strategy; following this approach proved very successful for BIOG's FY21 results. Investors are currently not focusing on the biotech sector's strong fundamentals, and the sell-off since early-February 2021 may have created a very attractive entry point for those willing to look beyond the current cyclical/value stock market leadership.
Perhaps reflecting weakness in the biotech sector, BIOG's valuation has been volatile since the middle of 2021. Its current 6.6% discount to cum-income NAV compares with a range of a 3.3% premium to an 11.5% discount over the last 12 months. Over the last one, three, five and 10 years the trust's average discounts are 2.5%, 4.3%, 5.0% and 4.6%, respectively.
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