4th Nov 2016 08:27
LONDON (Alliance News) - International Biotechnology Trust PLC said Friday a negative return for its most recent financial year was a reflection of a challenging biotechnology market, but noted it had performed better than its sector benchmark.
International Biotechnology reported a net asset value return of negative 1.7% for its financial year ended August 31, as its net asset value per share dropped to 575.1 pence from 585.1p.
The trust's net assets were down 8.0% to GBP216.7 million from GBP235.5 million over the twelve months. This compares to a return from the NASDAQ Biotechnology Index of negative 3.8% over the same period.
The trust's share price return suffered more, as its share price dropped 9.8% to 497.5p from 551.5p over the financial year.
Shares in International Biotechnology Trust were down 3.2% at 400.00p early Friday.
The trust said the results came from "a period of consolidation in the biotechnology sector", with its quoted portfolio hit hardest, with its value down 2.6%, while its much smaller unquoted portfolio rose in value by 9.5%.
"Valuations in the sector are looking attractive compared to the broader market and historical levels. Healthcare, including biotechnology, is often in the spotlight, however, as a US election approaches, given concerns about rising healthcare costs including drug pricing. This undoubtedly can make investors nervous but I am reassured by the investment manager that many of these concerns are not justified," said Alan Clifton, chairman of the trust.
"Drug pricing makes up only a small fraction of overall US healthcare expenditure and recently the Democratic candidate, Hillary Clinton, stated she would not be targeting innovation but hopes to clamp down on egregious price hikes of old generic drugs. The company's strategy of choosing to invest in innovative companies rather than those producing generic drugs should allow us to continue to achieve good returns for our shareholders," added Clifton.
By Adam Clark; [email protected]
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