In October 2016, IBT’s NAV/share fell 5.5% (GBP) while the NASDAQ Biotechnology Index was down 6.0% (GBP). The FTSE All-Share Index was up 0.6% (GBP) and the S&P 500 Index rose 4.1% (GBP). IBT’s share price fell 2.4% (GBP). The USD strengthened by 5.6% vs the GBP.

 

The main positive contributors to NAV in October were Alexion, Tesaro and Alkermes. Alexion shares rose after reporting a strong third quarter and promising data regarding their next generation Soliris. Tesaro announced impressive data for their drug niraparib in ovarian cancer patients. The company plans to complete the NDA submission to FDA in 4Q16 where the drug has fast-track designation. Alkermes released positive data from their phase 3 anti-depression drug ALKS-5461 after previous trials had failed to show efficacy. The position was exited on this news.

 

The main negative contributors to NAV in October were from Illumina and Regeneron. Illumina had a profit warning sending shares down 25% on the day. Regeneron shares slid on incrementally negative news flow from their pipeline, with one asset put on clinical hold by FDA and another asset was hit with manufacturing concerns.

 

Since the end of October, the sector has had a strong rally on the news of the Republican party winning the elections in the US, instead of the expected Hillary Clinton win and gridlock on Capitol Hill. This bodes well for biotechnology stocks since investors perceive that drug pricing has moved further down the political agenda.

 

There was a material change to the fund’s unquoted exposure in October as the first drawdown (£7.6M) into SV Fund VI was made, increasing the weight of unquoted to 14% of NAV.

 

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