The Biotech Growth Trust - Historic low sector valuations

The Biotech Growth Trust (BIOG) now has two co-managers, Geoff Hsu and Josh Golomb, at global healthcare specialist OrbiMed Capital. The trust has experienced a difficult period of relative performance due to the managers’ approach of focusing on emerging (smaller-cap) biotech stocks rather than large-cap biotech businesses, because of their higher growth prospects. This strategy has been out of favour in an uncertain macroeconomic environment. Hsu and Golomb highlight attractive valuations in the biotech sector, which are not reflecting favourable industry fundamentals, including high levels of innovation across a range of therapeutic areas and an acceleration in mergers and acquisitions (M&A) ahead of an upcoming patent cliff.