27th Apr 2020 15:01
(Alliance News) - International Biotechnology Trust PLC on Monday said it underperformed its benchmark in the first half of its year, hurt especially by share price falls in three investments.
The biotechnology-focused investment trust reported net asset value per share return of 3.6% for the six months ended February 29, while the NASDAQ Biotechnology Index's return for the same period was 6.0%.
International Biotechnology Trust cited "share price falls for Stemline, Sage and Amarin" as the main performance detractors for its quoted NAV.
In Stemline's case, the weak share performance resulted from lacklustre sales data for its drug Elzonris while Sage's share dropped on new its depression treatment has failed in a late-stage trial. Amarin, meanwhile, is involved in patent litigation against a possible generic competitor to its drug Vascepa which has hurt shares.
International Biotechnology Trust pays dividends equivalent to 4% of NAV on the last day of the previous financial year, August 31, via two semi-annual distributions. It paid the first of these, 12.4p per share, in January. A second dividend will be declared in July.
In the wake of Covid-19 uncertainty, the discount of the company's share price to its NAV has widened, reaching 15% on February 29 after being at a 1.9% premium in August 2019. To address, International Biotechnology Trust has repurchased 195,846 shares as of Thursday last week and reducing the discount to 4.6%.
Chair John Aston said: "The fund manager is well equipped to work remotely and therefore the current restrictions associated with Covid-19 have not radically changed the working practices for the company. However, the investment landscape has been affected. The investment manager anticipated the likely global impact of the virus relatively early in its trajectory and made appropriate adjustments to the portfolio.
"I expect that there will be more volatility to come as shareholder sentiment is affected by the progress of the pandemic, but the fundamentals of the biotech sector remain intact, and should deliver growth over the long-term."
Shares in International Biotechnology Trust were up 1.5% at 666.00 pence in London on Monday afternoon.
By Anna Farley; [email protected]
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