RCS - Intnl. Biotechnology - Results analysis from Kepler Trust Intelligence

International Biotechnology TrustAnnouncement

06/11/2025 17:00

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RNS Number : 5599G  Intl. Biotechnology Trust PLC  06 November 2025

International Biotechnology Trust (IBT)

06/11/2025

Results analysis from Kepler Trust Intelligence

International Biotechnology Trust has delivered resilient performance during a
volatile market. The share price total return for the year ending 31/08/2025
was 3.5% and the NAV total return 0.7%; during this period the NASDAQ
Biotechnology Index fell 6%. Since the period-end, the market has rallied and
IBT is now up 28.7% and 27.6% since August 2024, ahead of the S&P 500 and
the reference index.

During the financial year, the quoted portfolio delivered impressive
performance, up 3.8% in total return terms, with M&A an important driver
of returns. Managers Ailsa Craig and Marek Poszepczynski look for precisely
the sort of features that often lead to companies being taken out by larger
players, and this approach paid dividends during a period in which the index
as a whole remained weak.

On 02/10/2025, the board announced the establishment of a new limited
partnership with Schroders Capital to facilitate further investment in
unquoted biotechnology funds. The initial commitment of £10 million
represents approximately 4% of the company's net asset value.

Chair of the board, Kate Cornish-Bowden, said: "The convergence of the
transformational progress in scientific innovation, the impact of artificial
intelligence (AI) on trials and approvals, and increasing demand for
treatments should make biotechnology a lucrative investment for shareholders
in the years to come."

Kepler View

International Biotechnology's (IBT) strong performance during this period
highlights the attractions of active investment in this industry and the
managers' specific strategy. While the sector has been under pressure thanks
to high interest rates and political uncertainty, picking companies with the
right assets has helped deliver strong returns thanks to dynamics in the
science and the larger businesses' portfolios of treatments.

Ailsa and Marek have positioned the portfolio with a significant overweight
position in businesses that are clinically de-risked, i.e. that have proven
treatments in the final moments of regulatory approval or already launched.
These companies should benefit as the larger pharmaceutical companies seek to
refresh their portfolios of drugs as important patents expire in the next few
years. This was the motivation behind a number of the five takeovers from the
portfolio in the reporting period.

While outperformance in tough markets reflects impressive fund management, we
think what investors really want to hear is that the industry is back in
favour, and in the past few months there are very encouraging signs.
Biotechnology is a rate-sensitive industry, and the two US rate cuts seen
since August along with a general view that more will be needed must have
contributed to the remarkable rally - IBT's NAV is up 25% since the end of
August, well ahead of the reference index' 18%. Performance has been aided by
Ailsa and Marek's well-timed decision to add to their gearing around the lows
of April's tariff-induced selloff and bring it up to its highs since the
financial crisis.

IBT is, in our view, the premier vehicle in the listed biotechnology sector.
Ailsa and Marek have proven the worth of their strategy in rising and falling
markets since taking over management in March 2021 and outperformed their
direct peers. The 4% of NAV capital dividend should make the trust appealing
to both income and growth investors, while the share price discount of 11% at
the time of writing brings added value.

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