Biotech Growth Trust PLC · LSE:BIOG

Biotech Growth Trust — The Biotech Growth Trust — Shareholder Meeting (July 2023)

32 slides from Biotech Growth Trust's shareholder meeting presentation, Jul 27, 2023

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

    The Biotech Growth Trust Annual General Meeting 27 July 2023 This document does not constitute an offer to sell, or the solicitation of an offer to purchase, any security or fund. Any such offer may only be made by means of a confidential private placement memorandum, which is available to prospecti

  2. Slide 2: OrbiMed Corporate Update

    OrbiMed Corporate Update Total AUM: $17.6 billion Royalty Asia Private $2.7bn Equity $3.6bn $415 million $2.7 billion Other Public Equity $1.9b Private Equity 139 Other Public (ex. Asia) Equity $6.8bn $1.3bn Global Employees 25+ 30+ New Hires Colleagues with in 2022/23 M.D. / Ph.D. Source: OrbiMed;

  3. Slide 3: Portfolio Managers: Geoffrey Hsu & Josh Golomb

    Portfolio Managers: Geoffrey Hsu & Josh Golomb Geoffrey Hsu, CFA Josh Golomb General Partner Partner Geoffrey C. Hsu, CFA, is a General Partner at OrbiMed and has Josh Golomb is a Partner at OrbiMed focused on biotechnology. He been portfolio manager of The Biotech Growth Trust since May joined the

  4. Slide 4: BIOG Performance for Fiscal 2023 and Beyond

    BIOG Performance for Fiscal 2023 and Beyond 31 March 2022 to 15 July 2023 20.0% As of 31 March 2023 £% NBI +5.4% 15.0% BIOG NAV -11.2% BIOG Price -12.8% 10.0% 5.0% NBI 0.0% -1.4% -5.0% BIOG NAV -10.0% -10.5% BIOG Price -10.9% -15.0% -20.0% BIOG NAV (£) NBI (£) BIOG PRICE (£) -25.0% Note: See Endnote

  5. Slide 5: Market Cap Performance Divergence in Biotechnology

    Market Cap Performance Divergence in Biotechnology Small and Mid Cap Stocks Underperformed Large Caps in Fiscal 2023 20% Market Cap Breakdown BIOG NBI Delta (classifications as of 31 March 2022) Large Cap (>$10bn) 29% 63% -33% Mid Cap ($2-10bn) 14% 22% -8% 10% NBI Small Cap (<$2bn) 57% 16% 41% Large

  6. Slide 6: Market Cap Performance Divergence in Biotechnology

    Market Cap Performance Divergence in Biotechnology Small and Mid Cap Biotech Overdue For a Recovery Market Cap Breakdown BIOG NBI Delta 30% (classifications as of 30 June 2023) Large Cap (>$10bn) 38% 68% -30% 20% Mid Cap ($2-10bn) 19% 21% -2% Small Cap (<$2bn) 41% 11% 29% 10% *Snapshot exposure as o

  7. Slide 7: Size Divergence in the Broad Market

    Size Divergence in the Broad Market (31 March 2021 – 30 June 2023) Russell 2000 (Small/Mid Cap) vs Russell 1000 (Large Cap) 25% 20% 15% Russell 1000 10% (Large Caps) +8.9% 5% 0% -23.8% Underperformance -5% -10% Russell 2000 (SMID Caps) -15% -14.9% -20% -25% -30% Note: Chart updated from 31 March 202

  8. Slide 8: Unprofitable Tech Has Declined Meaningfully

    Unprofitable Tech Has Declined Meaningfully Goldman Sachs Unprofitable Tech Basket 20% 10% 0% -10% -20% -30% -40% GS Unprofitable Technology Basket -50% -58.1% -60% -70% -80% The GS Non-profitable tech basket (GSXUNPTC) consists of non-profitable US listed companies in innovative industries. Technol

  9. Slide 9: XBI vs. S&P Spread since XBI Inception

    XBI vs. S&P 500 (SPX) Spread since XBI Inception Drawdowns in spread followed by historically strong recoveries 800 -43.8% Drawdown +68.0% Recovery -30.0% Drawdown +83.3% Recovery Drug Pricing (Increased Political Taper Tantrum Pressure) 400 Logarithmic Scale 200 Drug Pricing (HCV) -73.3% -31.2% Dra

  10. Slide 10: Biotech Valuations at 20-Year Lows

    Biotech Valuations at 20-Year Lows Ratio of Market Cap to Net Cash on Balance Sheet (Median) 7 6 5 4 3 US/China Trade War & COVID-19 Dot Com Bust Hillary Drug Pricing 2 Great Financial Tweet Crisis Current Drawdown 1 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 201

  11. Slide 11: Biotech Valuations at 20-Year Lows

    Biotech Valuations at 20-Year Lows Percent of Biotech Companies Trading Below Number of Biotech Companies Trading Below Net Cash on Balance Sheet: Net Cash on Balance Sheet: 30% 180 160 25% 140 20% 120 100 15% 80 10% 60 40 5% 20 0% 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2000 2

  12. Slide 12: 10 Year U.S. Government Yield Stabilizing

    10 Year U.S. Government Yield Stabilizing (USGG10YR Index) Data as of 30 June 2023 10.0% 10 Year U.S. Government Yield • 10-year rate already assumes continued rate hikes into late 2023, followed 8.0% by rate cuts • Fed’s hawkish views already incorporated into expectations • Year-over-year inflatio

  13. Slide 13: What Could a Recession Mean for Biotech Stocks?

    What Could a Recession Mean for Biotech Stocks? Median Excess Return vs. S&P 500 During the Last 4 Recessions 25% 20% 15% 10% 5% 0% -5% -10% LC Biotech XBI (Biotech) MedTech Managed Care S&P 500 HC US Pharma Hospitals Life Science Tools Source: Goldman Sachs. Assessing Recession Impact Across Subsec

  14. Slide 14: BIOG Performance since Inception

    BIOG Performance since Inception 18 May 2005 through 15 July 2023 £1,800 BIOG NAV (£) NBI (£) FTSE (£) £% £1,600 £1,400 £1,200 £1,000 BIOG +758.3% NBI £800 +740.4% £600 £400 FTSE +213.3% £200 £0 Note: See Endnotes for additional information, including with regard to the calculation of these results

  15. Slide 15: Investment Themes

    Investment Themes © 2023 OrbiMed Advisors LLC. All Rights Reserved. CONFIDENTIAL 15

  16. Slide 16: Innovation – Pipeline as Full as it's Ever Been

    Innovation – Pipeline as Full as it’s Ever Been “Golden era” of innovation increasing number of drugs in development Number of pipeline products Phase I to regulatory submission by therapeutic drug class, 2011-2022: +70% Since 2016 Source: IQVIA Pipeline Intelligence, Dec 2022; IQVIA Institute, Jan

  17. Slide 17: Novel Technologies Driving R&D Pipeline Growth

    Novel Technologies Driving R&D Pipeline Growth Next-Generation Biotherapeutics Phase I to Regulatory Submission Pipeline by Mechanism, 2011–2022: Source: IQVIA Pipeline Intelligence, Dec 2022; IQVIA Institute, Jan 2023. Copyright IQVIA. All rights reserved.  Emerging technologies still in the early

  18. Slide 18: Notable New Drug Approvals Address Large Markets

    Notable New Drug Approvals Address Large Markets Gene Therapy for Protein Modulation Antibody for Alzheimer’s Antibody Drug Conjugate Antibody Fragment Spinal Muscular Atrophy for Cystic Fibrosis Disease for Breast Cancer for Myasthenia Gravis $2.0bn peak sales $10 bn peak sales $10.9bn peak sales $

  19. Slide 19: Majority of Industry Drug Pipeline Originated by Emerging Biotech

    Majority of Industry Drug Pipeline and Approved Novel Drugs Originated by Emerging Biotech Companies Share of Industry R&D Pipeline by Source of Origination for Novel Active Company Type: Substances (NASs) Launched: • Emerging biopharma companies (EBPs)* are now responsible for nearly two-thirds of

  20. Slide 20: Innovation Well Reflected in BIOG

    Innovation Well Reflected in BIOG Portfolio has exposure to a wide swath of novel technologies, as shown below: 11.3% NAV 17.9% NAV 13.5% NAV 17.6% NAV 27.0% NAV Source: OrbiMed, % of BIOG NAV as of 30 June 2023. Some positions are double counted because they use more than one technology. © 2023 Orb

  21. Slide 21: Significant Innovation Milestones in Biotech in Past Year

    Significant Innovation Milestones in Biotech in Past Year Selected first-in-class approvals and important clinical trial results First gene therapies First FDA approval of an First topical gene approved for oral microbiome therapy for therapy approved for hemophilia A and B C. difficile infection ra

  22. Slide 22: FDA New Molecular Entity Approvals

    FDA New Molecular Entity Approvals Dip in approvals in 2022 likely due to COVID; run rate YTD remains high 60 50+? 50 40 30 59 53 50 48 45 46 20 41 39 36 37 30 27 26 27 26 24 24 21 22 21 22 10 20 17 18 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2

  23. Slide 23: M&A Activity Picking Up

    M&A Activity Picking Up Biotech M&A Activity (2018 – 2023) $58B 12 $29B 11 $13B $51B $18B $31B 9 9 $16B 8 8 7 $18B $31B $6B $5B 6 6 $5B $12B $3B $9B 5 $104B 5 $10B $2B 4 4 4 4 4 $19B 3 $95B 3 $2B 2 $0.1B 2 2 1 **Represent announced transactions where the target was a publicly traded company. Source:

  24. Slide 24: M&A Activity Picking Up

    M&A Activity Picking Up 2022 Acquisitions 2023 Acquisitions Date Target Acquirer % Premium Date Target Acquirer % Premium 6/29/23 ~380% 11/29/22 48% 6/20/23 ~40% 11/29/22 $320m (private) 6/12/23 83%* 11/21/22 107% 5/22/23 80% 10/23/22 50% 5/10/23 89% 10/18/22 43% 04/30/23 23% 10/18/22 121% 04/25/23

  25. Slide 25: Big Pharma Patent Cliff in Second Half of Decade

    Big Pharma Patent Cliff in Second Half of Decade Pharma has urgent need to acquire biotech to fill revenue gap Nearly $250 billion in branded sales are at risk (2025-2030) $60 Branded Sales at Risk US Loss of ’22 Global due to Loss of Exclusivity ($bn) Co. Drug Exclusivity Sales (Projected) ($bn) $5

  26. Slide 26: Drug Pricing Legislation Passed, Clearing Overhang

    Drug Pricing Legislation Passed, Clearing Overhang Legislation will have minimal impact on biotech Drug pricing legislation was passed in August 2022 as part of Democrats’ Inflation Reduction Act • Part of broader bill to pay for climate and energy initiatives Impact of bill is manageable for the bi

  27. Slide 27: BIOG Holdings

    BIOG Holdings As of 30 June 2023 Market Price Pct. Market Price Pct. Market Price Pct. UNITED STATES $ Millions Value UNITED STATES $ Millions Value INTERNATIONAL $ Millions Value Emerging Biotechnology Emerging Biotechnology (cont.) Europe 2seventy bio Inc 11.3 2.7 Vaxcyte Inc 8.4 2.0 Emerging Biot

  28. Slide 28: 2023 Strategy and Outlook

    2023 Strategy and Outlook • Strategy to emphasize emerging biotech over large cap biotech will continue in order to fully capture sector rebound o Will capitalize on compelling investment opportunities in companies that need to finance at low share prices o Gearing level will generally stay between

  29. Slide 29: Appendix

    Appendix © 2023 OrbiMed Advisors LLC. All Rights Reserved. CONFIDENTIAL 29

  30. Slide 30: China Recovery Yet to Occur After Re-opening

    China Recovery Yet to Occur After “Re-opening” Hong Kong Healthcare Index (HSHCI) 9000 8000 7000 6000 Peak to trough: 5000 -67% 4000 3000 2000 China healthcare stocks hit all-time lows last fall but should eventually rebound with post-COVID recovery and economic stimulus Source: Bloomberg Note: Char

  31. Slide 31: 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 (the “SEC”) that specializes in the investment of clients’ assets, inc

  32. Slide 32: Endnotes (continued)

    Endnotes (continued) Indices Information about indices is provided to allow for comparison of the performance of the Shares to the Fund’s benchmark and certain other recognized indices. Investors cannot invest directly in an index, which also does not take into account trading commissions and costs.

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