After a long period in the doldrums, the biotechnology sector is staging a comeback. A more benign interest rate environment compared with 2021 to 2023, when biotech trusts across the board suffered, and greater political certainty in the US – including clearer visibility on US drug pricing policy – are leading to a surge in M&A activity in the sector.
While this is good news for the industry as a whole, some trusts are better positioned than others to take advantage of the rebound. With its focus on small-cap companies and exposure to China, The Biotech Growth Trust (BIOG) is one such example.
Over the past year, the trust’s total shareholder return was 105 per cent – double the sector’s 50 per cent average and well ahead of the 47 per cent achieved by its benchmark, the Nasdaq Biotechnology Index. Over a three-year period the trust has been the best performer in the AIC’s healthcare and biotechnology sector.