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LONDON (Alliance News) - British & American Investment Trust PLC, Biotech Growth Trust PLC, and International Biotechnology Trust PLC were among the best-performing London-listed investment companies in May, according to research firm QuotedData, which said there was a "small rally" in the biotech and healthcare sector that month.
British & American, a self-managed investment trust with a policy of investing predominantly in investment trusts and other London-listed companies to generate a balance of income and capital growth for shareholders, said on April 29 that its net assets had, as of April 25, fallen to GBP24.0 million, a decrease of 20.5% since the start of 2016, due to a drop in the value of its US investments. In 2015, its net assets had risen by 11.4% to GBP30.2 million from GBP27.1 million.
On a total return basis, after adding back dividends paid during 2015, its net assets increased by 20.0% compared to a 1.3% decrease and a 1.0% increase in the FTSE 100 and All Share indices. The stock was untraded Thursday.
Anthony Townsend, the chairman of British & American, said in April that the trust will await the outcome of the UK's June 23 referendum on whether to remain a member of the EU or leave, before taking any major new investment decisions. He said there was a "high degree of uncertainty" around the referendum.
According to QuotedData, British & American's NAV and share price remain volatile, "linked to the fortunes" of GeronCorp, its largest US investment.
"Geron's recovery followed the completion of a landmark development and sales agreement with Johnson & Johnson previously reported on for its proprietary cancer drug platform, Imetelstat, at the end of 2014 and reflected the market's gradual appreciation of the prospects for the drug as clinical trials progressed and results began to be published," Jonathan Woolf, the managing director of British & American, said in April.
QuotedData's monthly round-up showed that British & American's share price rose by 19.4% and its net asset value - the difference between assets and liabilities - by 6.5% in May.
Biotech Growth Trust, which didn't feature in QuotedData's list of best-performing funds in share price terms but saw its net asset value rise by 6.2% in May, has its investments managed by US-based OrbiMed Capital LLC.
The trust, which aims to generate capital growth by investing in the worldwide biotechnology industry, had a tough time in the year ended March 31. Its net asset value per share fell by 24.8% to 627.9p from 834.7p, and its share price by 26.3% to 585.0p from 793.5p, as the sterling adjusted benchmark NASDAQ Biotechnology Index fell by 21.8% to 1,894.6 from 2,423.5.
"Following a strong four-year run, biotechnology stocks experienced a substantial sell-off during the year under review. The initial catalyst for this was concerns about the sustainability of high drug pricing in the US and the potential for new regulation. Additionally, poor earnings performance by several large capitalisation biotechnology firms and negative pipeline readouts from a few emerging biotechnology firms contributed to the negative sentiment within the sector," Sven Borho, a founding partner of OrbiMed, said on May 25.
Biotech Growth Trust's monthly fact sheet for April showed that its net asset value per share was up 1.1% that month, with its share price up 2.5% and benchmark up 1.2%. From the start of 2016 up to April 30, its net asset value was down 19.2%, its share price down 19.0%, and the benchmark by 20.2%. The stock was down 0.3% at 617.28p on Thursday.
International Biotechnology Trust, which is managed by SV Life Sciences Managers LLP, saw its net asset value rise by 7.5% in May, the best-performing fund that month, QuotedData said, but didn't feature in the top funds in share price terms.
In April, SV Life Sciences Managers said biotechnology stocks were feeling the weight of the upcoming US Presidential Election in November.
"Rising healthcare costs including the cost of prescription drugs have become a key area of debate for US politicians, patients and the media, and a source of worry for investors," SV said in its review of the six months to February 29, the first half of International Biotechnology Trust's financial year.
In that period, the trust's net asset value per share dropped by 17.7% to 481.7 pence and its shares lost 23% of their value, falling to 425.0p, as the NASDAQ Biotechnology Index lost 18%.
Alan Clifton, the chairman of the trust, said the political response to "unconscionable price hikes" for some drugs had much to do with the decrease.
When Turing Pharmaceuticals acquired Daraprim, a drug used to treat toxoplasmosis, in September 2015 and subsequently multiplied its price to USD750 per tablet from USD13.50, an increase of more than 5000%, outcry followed.
Most strikingly, Hillary Clinton, along with Bernie Sanders one of two remaining Democratic candidates for the presidency, tweeted "Price gouging like this in the specialty drug market is outrageous. Tomorrow I'll lay out a plan to take it on."
International Biotechnology Trust's fact sheet for April showed that its net asset value per share rose 1.8% in sterling terms, performing better than the 1.2% rise in the NASDAQ Biotechnology Index in sterling terms. The FTSE All-Share Index was up 1.1% and the S&P 500 Index fell 1.2% on the same basis. The trust's share price rose 4.6% that month. On Thursday, the stock was down 0.2% at 451.00p.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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