International Biotechnol... Share Discussion Threads

[philo124] 28/10/2013 17:18

Missed that; thanks a lot.

[davebowler] 28/10/2013 16:48

Investment Manager's Review


Summary

The year ended 31 August 2013 saw the Company's NAV per share increase by 34.7%. The Company's quoted portfolio gained 37.7% over the year, helped by strong equity markets and significantly increased investor interest in the biotechnology sector on the back of strong product development and M&A news flow. The quoted portfolio benefited from two acquisitions during the period - YM Biosciences and Onyx Pharmaceuticals. The unquoted portfolio returned 17.5% over the year, driven by valuation changes to four investments already exited for which the Company retains rights to receive future contingent performance-based payments and an increase in the valuation of Entellus which moved to a revenue multiple based valuation in the period.



Portfolio Overview and Performance

At 31 August 2013, the Company held investments in 75 companies: 46 quoted (representing 81.8% of NAV) and 29 unquoted companies (representing 15.8% of NAV). The remaining 2.4% comprised cash, money market instruments and other net assets. 1.2% of NAV is legally committed to further investments in unquoted companies, while 2.3% is reserved for further investment in unquoted companies.



As mentioned in the Chairman's Statement the performance of the quoted portfolio, did not keep pace with the underlying NBI, which increased 46.5%. During the year, the quoted portfolio tracked the NBI until April and May 2013. In these months the portfolio was significantly underweight in three stocks - Regeneron, Vertex and Biogen - which contributed strongly to the performance of the NBI but also the Company's underperformance, which began underperforming in April on a relative basis and ended April and May 7.1% and 8.9% below the Index respectively. The portfolio then tracked the NBI to the year end underperforming by 8.8%.



By subsector, 82% of NAV was invested in the biotechnology sector, 5% in the medical device sector, 3% in the specialty pharmaceuticals sector, 5% in the medical research services sector and 3% in the life sciences tools and diagnostics sector, emphasising the diversified nature of the Company's investments.



Representatives of the Investment Manager sat on the boards of 24 portfolio companies (22 unquoted and two quoted) at the end of the year. An active board seat on private companies remains an important aspect of the Investment Manager's investing activities in early-stage unquoted biotechnology companies.



Quoted Investments

During the year ended 31 August 2013, the combined effect of gains and losses on quoted investments, including currency movements, was to increase the Company's NAV by £42.4m or 76.9p per share. The return for the quoted portfolio over the year was an increase of 37.7%, after taking a currency gain of 1.9% into account.



Broader equity markets performed strongly during the year under review. Against this backdrop, the biotechnology sector performed particularly well, driven by strong earnings growth at attractive valuations, M&A activity and positive clinical and regulatory news flow updates on a number of major new biotechnology product opportunities.



During the year ended 31 August 2013 there were a number of IPOs for biotechnology companies raising $3.0bn. By comparison $1.1bn, $1.0bn and $1.6bn was raised in the calendar years 2012, 2011 and 2010, respectively.



The market for follow-on, or secondary, financings for public biotech companies continues to be robust, with $8.1bn raised calendar year to date by the end of August 2013, compared to $4.5bn, $6.0bn and $3.5bn for calendar years 2012, 2011 and 2010, respectively (source: BioCentury). High quality assets and management teams continue to be able to attract equity capital to fund research and development programmes.



Three companies were acquired during the period under review which positively contributed to NAV performance - YM Biosciences, Life Technologies and Onyx. In February 2013 Gilead Biosciences completed the acquisition of YM Biosciences for $510m, contributing £1.5m to the NAV this year. In April 2013, Thermo Fisher Scientific announced the $13.6bn acquisition of Life Technologies, contributing £1.5m to NAV. In August 2013, Amgen acquired Onyx Pharmaceuticals for $10.4bn, contributing £4.9m to NAV.



The quoted portfolio continues to be structured to include large, mid and small-cap biotechnology, emerging medical device and life science tools and diagnostics companies, which we believe provides the optimal risk-reward structure for long-term capital gains.



Unquoted Investments

During the year ended 31 August 2013, the combined effect of gains and losses on unquoted investments, including currency movements, was to increase the Company's NAV by £4.2m or 7.6p per share. The return for the unquoted portfolio over the year was an increase of 17.5%, including a currency gain of 2.6%.



The main contributor to performance came from the upwards revaluation of four investments (ESBATech, EUSA Pharma,

Ikano Therapeutics and Itero Holdings) which increased the NAV by £3.5m or 6.3p per share. These companies have already

been exited but IBT retains rights to receive future contingent performance based payments.



After these changes, the Company currently recognises £3.5m of fair value for future milestone payments. The receipt of these payments is contingent on pre-agreed, and legally-binding, operational or clinical development milestones being achieved. If paid in full, these milestone payments are estimated to amount to £16.8m on current exchange rates, representing £13.2m of additional unrecognised value beyond that currently incorporated into the NAV.



Two companies reduced unquoted performance; Lux Biosciences and Vantia. Lux Biosciences announced that a pivotal late-stage clinical study for its key drug candidate for the treatment of uveitis (eye inflammation) failed to show any treatment benefit. With no clear way forward for the asset or the company, the value of this investment was written down from £1.3m to zero during the period. In addition the failure of Vantia's phase II B drug trial for nocturia meant that the value of this investment was also written down to zero from £0.6m.



More positively, portfolio companies Entellus and Celerion have performed strongly. Entellus' valuation moved to a trading multiple basis as revenues of this sinus treatment medical device company have developed in the period adding £1.0m to NAV. Celerion - a clinical research organisation - continues to perform strongly and the value of the company's interest has been written up in line with public market comparables adding £0.6m to the NAV during the period.



Since the year end, two noteworthy events have impacted the portfolio. On 25 September 2013, Ophthotech listed on NASDAQ (Ticker: OPHT) at a share price of $22 which added £1.2m to NAV. On 4 September 2013, TransEnterix merged with the OTCBB Listed SafeStitch (Ticker: SFES) alongside a $30m fund raising. The stock remains very thinly traded so the valuation is based on the share price of the fund raising which has added £0.3m to NAV.



Three new unquoted investments were made during the 12 months under review. These were: NCP Holdings, operating as Nordic Consulting Partners, a healthcare IT consulting business; Autifony, a spin-out from GlaxoSmithKline focused on developing drugs to treat hearing loss; and Oncoethix, a development-stage company focused on new cancer drug treatments. Follow-on investments were also made into 14 existing holdings. Investments into all unquoted holdings totalled £3.0m during the year.



At the year end, there were formal commitments to further invest in unquoted companies (based on certain operational or clinical milestone achievements) totalling £2.0m. There are also estimated reserves of an additional £4.1m for existing unquoted portfolio companies.



The life sciences venture capital industry remains challenging; while there are still very many innovative companies in which to make investments in North America and Europe, the environment for raising venture funds to invest and for realising exits, and so making returns for investors, has been weak. Despite this backdrop the Company's unquoted portfolio contains some promising companies with exit possibilities that will reward the patience of investors.



Outlook



The biotechnology sector has had another exceptional year, with impressive absolute and relative returns both against its peers within the healthcare sector, and versus other sectors within the S&P500.



In recent years, the sector has been valued at a discount because of the following factors: A lack of 'risk appetite' during the financial crisis that followed 2008; Unfounded concerns regarding healthcare reform and the belief that top line sales growth momentum would end after sales of the major profitable companies had matured; and, Investors had lost faith in the sector.



Since then these concerns have diminished helped by strong growth in these biotechnology companies which has seen their rating improve. In addition, new positive fundamental reasons to own the sector have emerged. R&D productivity has improved and numerous drugs, with multi-billion dollar sales potential, have been launched. Each derived from years of focused scientific research with funds raised through the equity markets.



The larger profitable companies have successfully reinvented themselves. Some acquired late stage assets which showed huge sales potential. This role was traditionally assumed to be for the pharmaceutical giants. However, strong management teams with an understanding of the best use of capital have taken advantage of the opportunities presented by late stage assets to get saleable products to the market.



Gilead purchased Pharmasset, with a promising phase two drug which has the potential for peak sales of $10bn annually. Celgene bought Pharmion and most recently Amgen acquired Onyx Pharmaceuticals. All three acquisitions have transformed the prospects of these larger cap names. Biogen, however, proved that innovation still exists within a larger institution and developed Tecfidera which has sold $192m in its first quarter after the launch. Analysts predict Tecfidera sales could reach $5.7bn at its peak.



Secondly, new 'large cap' names were born. Regeneron's highly successful launch of Eylea and Alexion's stellar growth for wholly owned drug, Soliris, catapulted both names to profitability and multi-billion dollar market caps.



Today the large cap companies offer mid-twenties earnings growth over the next two to three years at reasonable share prices, attracting new investors and increasing valuations. Interest in innovation has returned once again and drug launches, pipelines and consolidation are not being ignored.



Investors might fear that a growth sector such as biotechnology, which is fundamentally being paid for by society and its governments, will face a financial dead-end. However, the bulk of spending in the healthcare system stems from primary care and hospital-spend. Innovative drug therapies for high unmet medical needs and more efficient delivery of health solutions which is the hunting ground for biotech businesses should ensure that demand for innovative products continues in the long-term.



For example, Gilead's new drug for the hepatitis C virus, sofosbuvir could provide the opportunity of a cure for those who have recently contracted the disease or material alleviation of the impact for those in the early stages of disease development. This will likely change disease management from what is a cumbersome treatment paradigm involving visits to hospital, poor side effects and only partial efficacy, to a relatively short period of oral therapy and possible cure. High pricing for these therapies might on the face of it cause concerns but the potential for long-term savings for society, governments and most importantly, patients themselves, preventing liver transplants, hospital stay and other knock on effects later in life, will result in huge cost savings overall.



The biotechnology sector fits neatly into this model of innovation and efficiency. These companies have already made a substantial impact on the diseases of mankind. HIV is now a chronic disease, when it used to be fatal. Hepatitis C has an effective cure on the horizon, and new treatments for cancer with improved efficacy will be launched in the near term.



Further into the future, innovation may provide solutions to diseases not yet understood, such as Alzheimers. A disease whose cost to society through nursing homes and round-the-clock care is very large. A biotechnology solution may be possible.



The Company invests across the spectrum of biotechnology, capturing innovation at every level. From the unquoted venture backed companies, which invest in the most innovative new drugs to the larger established, yet high growth profitable companies. We believe that giving our investors exposure to all the aspects of the biotechnology sector will provide excellent long-term performance and returns for their investment.



SV Life Sciences Managers LLP

Investment Manager

28 October 2013

[philo124] 03/10/2013 09:02

MOS trades.

[davebowler] 01/10/2013 14:53

Philo124 -presumably on holiday courtesy of the IBT rise?

[philo124] 27/9/2013 12:32

Greetiıngs from Bodrum.Great progress.

[davebowler] 27/9/2013 11:50

Date NAV Pence
Thursday 26 Sep Ex Income 334.66

[davebowler] 25/9/2013 12:52

Portfolio Update



The Board of International Biotechnology Trust plc (the "Company") notes two unquoted portfolio events.

Today the unquoted portfolio company, Ophthotech Corporation, has listed on the NASDAQ Global Select market - ticker OPHT. The Company owns 209,902 Common Stock, which are locked up and may not be traded for 180 days. Applying the Initial Public Offering price of $22 to the Company's ownership and incorporating a 2% liquidity discount to reflect the lock up terms, results in an increase in Net Asset Value of £1.2m or 2.1 pence per share above the valuation released on 24 September 2013.

In addition, the unquoted portfolio company TransEnterix reverse merged with the Over The Counter Bulletin Board (OTCBB:SFES) traded SafeStitch Medical on 4 September 2013 alongside a $30m fund raising. These shares are thinly traded and so no change in valuation was made when the reverse merger took place. Our Manager has been following the trading in the shares since the merger and the 4,445,411 SafeStitch Medical shares owned by the Company are now valued at $0.40 a share, based upon the price per share of the $30m fund raising. This values the holding at £1.1m, an increase of £0.3m or 0.6 pence per share above the valuation released on 24 September 2013. Due to the thinly traded nature of the OTC market, this holding will remain in the unquoted portfolio.

[philo124] 12/9/2013 08:38

Topped up 33%.

[davebowler] 11/9/2013 15:57

Date NAV Pence
Tuesday 10 Sep Ex Income 328.59
------------ -------

[philo124] 09/9/2013 11:49

Yep, this and other Bio/Tech IT's have been a good place to be.

[davebowler] 09/9/2013 11:45

Date NAV Pence
Friday 06 Sep Ex Income 323.38

[davebowler] 09/9/2013 11:27

hxxps://www.fidelity.co.uk/professional/perspectives/details.page?id=/templatedata/perspectives/article/data/undervaluing-innovation-in-pharma

[philo124] 02/9/2013 11:57

Yep; great long term hold and balance to divi stocks.

[davidbh] 02/9/2013 11:53

V. impressive cv

[davebowler] 02/9/2013 09:48

International Biotechnology Trust plc



Staff Change at Investment Manager





The Board of International Biotechnology Trust plc (the "Company") notes that the Company's Investment Manager, SV Life Sciences Managers LLP, has appointed Carl Harald Janson as Investment Manager, who will start with effect from today Monday, 2 September 2013. Carl Harald will be supported by Ailsa Craig to run the quoted side of the portfolio, and managing partner Kate Bingham will continue to manage the unquoted side of the portfolio.

Among Carl Harald's many achievements, the outstanding performance of the Carnegie Biotechnology Fund stands out as a key highlight. During his six years and four months as its Principal Fund Manager, Carl Harald was recognised by Bloomberg as the top performing biotech fund manager worldwide. During this time period, the Carnegie Biotechnology Fund had a total return of 54% (USD) while the NASDAQ Biotechnology Index returned minus 26% (USD), a relative outperformance of approximately 80% (USD).

Carl Harald is excited to be focusing on the International Biotechnology Trust portfolio, and looks forward to the challenge of again delivering excellent long term performance in an area he is passionate about.

Carl Harald qualified as a medical doctor in 1981, completed his PhD in 1990 at the Karolinska Institutet, and qualified as Certified European Financial Analyst from the Stockholm School of Economics in 1999. In 1992 he joined Astra Arcus where he held various positions including Director for Preclinical Research and Development. In 1997 Carl Harald began to combine his medical and pharmaceutical industry insights with finance by working as a Senior Financial Analyst for Hagstromer & Qviberg and then Danske Securities.

In 2000 he gained a role as Senior Portfolio Manager and Principal Fund Manager of the Carnegie Biotechnology Fund at Carnegie Investment Bank in Stockholm. Carl Harald responsibilities at Carnegie Investment Bank also included Fund Manager of the Carnegie Medical Fund, and the Carnegie BiotechBridge Fund.

In 2008 Carl Harald was appointed Investment Manager at Karolinska Development in Stockholm, and has served as a member of the board of various Swedish biotechnology companies including Akinion Pharmaceuticals, Axelar, Aprea, Oncopeptides, and Clanotech. Since 2012 he held various chief executive roles for the Karolinska Development portfolio companies.

[philo124] 06/8/2013 18:40

Pretty good progress.

[davebowler] 06/8/2013 09:56

Date NAV Pence
Friday 02 Aug Ex Income 325.85

[davebowler] 30/7/2013 09:38

NAV Friday 26 Jul 317.10

[davebowler] 24/7/2013 12:06

Date NAV Pence
23 Jul Ex Inc. 313.06 p

[protean] 17/7/2013 08:56

Prognosis: Healthy earnings for pharma, biotech

www.cnbc.com/id/100890557

[protean] 14/7/2013 10:49

The sector is on a roll:

dealbook.nytimes.com/2013/07/11/biotech-companies-surge-as-investors-flock-to-them/

[philo124] 08/7/2013 16:00

Just topped a little for SIPP a/c.