Biotech Growth Trust PLC · LSE:BIOG

Biotech Growth Trust — The Biotech Growth Trust — Shareholder Meeting (July 2016)

26 slides from Biotech Growth Trust's shareholder meeting presentation, Jul 12, 2016

  1. Slide 1: The Biotech Growth Trust Annual General Meeting

    The Biotech Growth Trust Annual General Meeting OrbiMed Advisors 12 July 2016 This document does not constitute an offer to sell, or the solicitation of an offer to purchase, any security or fund, including interests in the Biotech Growth Trust PLC. © 2016 OrbiMed Advisors LLC. All Rights Reserved.

  2. Slide 2: Volatile 12 Months in Biotechnology

    Volatile 12 Months in Biotechnology 400% £% | $% 350% 300% 250% BIOG (NAV) +218.0% | +171.4% 200% BIOG (Price) +213.1% | +167.3% NBI Index 150% +190.9% | +148.3% 100% 50% 0% BIOG Price NBI BIOG NAV Source: Frostrow, Bloomberg - data updated through 30 June 2016. © 2016 OrbiMed Advisors LLC. All Righ

  3. Slide 3: 2015-16 Drawdown in Historical Context

    2015-16 Drawdown in Historical Context NBI Index XBI Index Market Cap Weighted Biotechnology Index Equal Weighted Biotechnology Index Source: Bloomberg, updated through 30 June 2016, drawdowns calculated from intraday highs to lows. © 2016 OrbiMed Advisors LLC. All Rights Reserved. CONFIDENTIAL 3

  4. Slide 4: The Biotech Drawdown: Drug Pricing Headlines and Macro Risks

    The Biotech Drawdown: Drug Pricing Headlines and Macro Risks NASDAQ Biotech Index (NBI) 4250 Valeant pricing/ Turing Pharma Raises Price on reimbursement Drug >5000% debacle; general market weakness 3750 US Presidential 3250 Primaries Hillary Tweet on Drug Pricing 2750 Brexit Volatility 2250 Source

  5. Slide 5: U.S. Drug Pricing: Rhetoric Worse than Reality

    U.S. Drug Pricing: Rhetoric Worse than Reality Drug Spend as a % of Total Healthcare Expenditure (CPI Adjusted) Bolus of Patent Expirations Source: Evercore ISI | Note: Includes CMS Estimates through 2024 Looking at the Facts: “…health care inflation is at its lowest rate in fifty years…” - Presiden

  6. Slide 6: Drug Pricing Rhetoric Likely to Decline with Progression Toward Election

    Drug Pricing Rhetoric Likely to Decline with Progression Toward Election; Proposal Unlikely to be Implemented Medicare Part D has been a HUGE success… …under Private Health Plans Source: cbo.gov (budget projections as of 2004) All previous Democratic regimes have Failed to enact a single payor syste

  7. Slide 7: Brexit and Macroeconomic Risks are Manageable

    Brexit and Macroeconomic Risks are Manageable • Approximately 90% of BIOG assets are invested in U.S. securities. • Recent GBP weakness has positively impacted NAV. • Among Major Biotech (1) companies, European sales account for ~20% of revenue and UK sales account for <5% of revenue. • Major Biotec

  8. Slide 8: Why biotech?

    Beyond the Macro Headlines – A Focus on Fundamentals Why biotech? • Scientific Breakthroughs • New Drug Approvals • M&A Acceleration © 2016 OrbiMed Advisors LLC. All Rights Reserved. CONFIDENTIAL 8

  9. Slide 9: Biotechnology Advances Drug Development Toolbox

    Biotechnology Advances Drug Development Toolbox Cellular Therapy Cell Surface Gene therapy / DNA Gene editing transcription RNAi / anti-sense mRNA Small Molecules translation Monoclonal Antibodies Intracellular Protein Cytokines / Recombinant proteins Bispecific Antibodies Mature Protein Secreted Pr

  10. Slide 10: Innovation & Breakthroughs in All Fronts of Medicine

    Innovation & Breakthroughs in All Fronts of Medicine ~2000s Present Oncology Oncology  “Sledgehammer” chemotherapy  Immuno-oncology is the new anchor  Early days of mAb and targeted  Genetics and biomarkers guide therapy  Life extended by weeks or months  Cures are becoming reality Rare Diseas

  11. Slide 11: Drugs Approved in 2015

    Drugs Approved in 2015 #1 highest number of New treatment 45 NME Approved approvals since 1996 + 28 new Breakthrough Therapy Designations More than a third Nearly half are are first in class medicines to treat medicine rare diseases 36% as first in class 47% for rare diseases Source: PhRMA, OrbiMed

  12. Slide 12: How Do Investors Make Money Out of Biotech Innovation?

    How Do Investors Make Money Out of Biotech Innovation? Picking an Emerging Biotech Winner: Takeout Premium M&A Source: Bernstein Research, POS is based on the 20-year industry average Pharmacyclics (PCYC) – An Example: $300.00 $250.00 PCYC acquired by ABBV For $21bn Price per share $200.00 $150.00 A

  13. Slide 13: An M&A Frenzy Approaching?

    An M&A Frenzy Approaching? •1 Accruing cash piles at big pharma & biotech are waiting to be deployed(1) $35B $31.4B $30B $26.2B $25B $23.3B $18.6B $20B $15B $10.1B $9.3B $9.0B $10B $8.4B $7.0B $6.6B $5.4B $4.5B $4.3B $3.4B $5B $1.4B $1.0B $1.0B $0B Amgen Gilead Pfizer Merck Sanofi Roche GSK AbbVie A

  14. Slide 14: Biotech P/E Below S&P P/E

    Biotech P/E Below S&P P/E Attractive Valuation: Historically a Bullish Signal Biotech & Pharma NTM P/Es 45.0x 40.0x 35.0x 30.0x Large-cap biotech trading 25.0x at “zero pipeline” value 20.0x 15.0x 10.0x 5.0x US 'Mega' Large Cap Biotech S&P500 Note: Charts for US ‘Mega’ Large Cap Biotech include: GIL

  15. Slide 15: The Biotechnology Valuation at Historic Low

    The Biotechnology Valuation at Historic Low Biotechnology’s P/E: Attractive Big Biotechnology on a Relative and Healthcare and Historic are historically Basis attractive Biotech S&P 500 Healthcare Utilities Cons Stapl Cons Disc Telecom Tech Industrials Financials Energy Materials 1993 17.2 14.7 14.0

  16. Slide 16: Fiscal Year Review

    Fiscal Year Review © 2016 OrbiMed Advisors LLC. All Rights Reserved. CONFIDENTIAL 16

  17. Slide 17: BIOG Performance in Fiscal Year 2016

    BIOG Performance in Fiscal Year 2016 31 March 2015 through 31 March 2016 20.0% £% | $% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% NBI Index -20.0% -21.8% | -24.2% BIOG (NAV) -25.0% -24.8% | -27.1% BIOG (Price) -30.0% -26.3% | -28.5% -35.0% BIOG PRICE NBI BIOG NAV Source: Frostrow, Bloomberg. © 2016 O

  18. Slide 18: Major Movers in FY2016 (Portfolio Contribution%)

    Major Movers in FY2016 (Portfolio Contribution%) 31 March 2015 through 31 March 2016 3.5% Ticker Name 2.9% 4528 JP Ono Pharmaceutical Co 3.0% GEVA US Synageva BioPharma 2.5% ANAC US Anacor Pharmaceuticals Gains RCPT US Receptos Inc 2.0% 1.7% IPH FP Innate Pharma SA 1.5% 1.2% DYAX US Dyax Corp 1.0% 0

  19. Slide 19: BIOG Performance in Calendar Year 2016

    BIOG Performance in Calendar Year 2016 0.0% £% | $% -5.0% -10.0% BIOG (NAV) -15.3% | -23.8% -15.0% NBI Index -15.5% | -23.9% BIOG (Price) -20.0% -17.9% | -26.1% -25.0% -30.0% BIOG PRICE NBI BIOG NAV © 2016 OrbiMed Advisors LLC. All Rights Reserved. CONFIDENTIAL 19

  20. Slide 20: BIOG Performance vs. Benchmark

    BIOG Performance vs. Benchmark Calendar Fiscal 3 Year 5 Year Periods Ending OrbiMed YTD Year Annualized Annualized 30 June 2016 Inception* 2016 2016 Return Return BIOG NAV (£) -15.3% -24.8% 20.3% 26.4% 563.2% NASDAQ Biotech Index (£) -15.5% -21.8% 19.4% 24.1% 446.1% Excess Returns (£) 0.2% -3.0% 1.0

  21. Slide 21: BIOG Holdings

    BIOG Holdings As of 30 June 2016 Market Price Pct. INTERNATIONAL Market Price Pct. UNITED STATES $ Millions Value Europe $ Millions Value Emerging Biotechnology Emerging Biotechnology Advaxis Inc 3.6 0.7 Alkermes PLC 7.4 1.4 Biomarin Pharmaceutical Inc 18.1 3.5 Forward Pharma A/S 1.2 0.2 Dynavax Tec

  22. Slide 22: 2016 - 2017 Outlook

    2016 - 2017 Outlook • Sector volatility should diminish as we approach US presidential election • Valuation of some large-cap biotechs approaching a level that is close to historical low and attractive for M&A and corporate buyback • M&A activity to catch up in 2H16, as Big Pharma and major biotechs

  23. Slide 23: Appendix

    Appendix © 2016 OrbiMed Advisors LLC. All Rights Reserved. CONFIDENTIAL 23

  24. Slide 24: Investment Team

    Investment Team Biotechnology: Sven Borho, CFA…Partner Geoffrey Hsu, CFA …Partner  M.Sc. (London School of Economics)  MBA (Harvard), BA (Harvard)  OrbiMed Portfolio Manager and Founding Partner  Prior experience: Lehman Brothers Haige Lu, PhD…Senior Associate Richard Klemm, PhD…Public Equity Pa

  25. Slide 25: Endnotes

    Endnotes General Notes 1. The information presented herein relates to The Biotech Growth Trust PLC (the “Fund”). OrbiMed Capital LLC ( “OrbiMed”) is an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) that specializes in the investment of clients’ assets, includ

  26. Slide 26: Endnotes (continued)

    Endnotes (continued) 7. Prospective investors are not to construe the contents of this presentation as legal, business or tax advice. Each investor should consult such advisers as it deems appropriate concerning a potential investment in Shares. 8. No securities commission or regulatory authority in

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