International Biotechnology Trust PLC · LSE:IBT
International Biotechnology Trust — FY2024 Earnings Presentation
43 slides from International Biotechnology Trust's earnings presentation, November 2024
Slide 1: IBT Full Year Results Presentation
IBT Full Year Results Presentation International Biotechnology Trust plc (IBT) November 2024 Marketing material for professional clients only.
Slide 2: Agenda
Agenda 01 Introduction 02 Sector overview 03 Portfolio Analysis 04 Appendix 2
Slide 3: Joint Lead Managers since March 2021
Joint Lead Managers since March 2021 Scientific and financial expertise with over 26 years combined experience at IBT Ailsa Craig Marek Poszepczynski Lead Investment Manager, BSc Lead Investment Manager, MSc Managed IBT since 2006 and took over as co-lead manager in March Managed IBT since 2013 and
Slide 4: Schroders healthcare platform
Schroders healthcare platform A full spectrum of investment opportunities Venture Early stage Biotech Pharmaceutical Healthcare Schroders Healthcare Innovation Healthcare and Medical related equities International Biotechnology Trust plc Public biotech equities with 5-15% venture fund exposure Schro
Slide 5: International Biotechnology Trust – established May 1994
International Biotechnology Trust – established May 1994 Trust overview Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange r
Slide 6: Annual results summary 12M to August 2024
Annual results summary 12M to August 2024 IBT outperformed benchmark during FY23/24 Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested
Slide 7: IBT’s overall performance
IBT’s overall performance IBT has returned >10% per annum over the past ten years Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.
Slide 8: Fund risk considerations
Fund risk considerations • Capital erosion: Where fees are charged to capital instead of income, or a fixed distribution amount is paid regardless of the Company’s performance, there is the potential that performance or capital value may be eroded. • Concentration risk: The Company may be concentrat
Slide 9: M&A – a major theme of the biotech industry
M&A – a major theme of the biotech industry Strong M&A deal flow for the fund in recent years 25 M&A deals among IBT’s portfolio companies since 2020¹ Acquiror Quoted M&A Target Premium paid 120% Amgen Gilead ChemoCentryx 100% Immunomedics Ipsen Pfizer Albireo Arena Pharma 80% Sanofi Pfizer Principi
Slide 10: Major biopharma patent expiries
Major biopharma patent expiries Threat increasing during second half of the decade Worldwide sales ($bn) % Retail sales at Patent Risk 120 8.00% 7.00% 100 6.70% 6.20% 6.00% 80 5.50% 5.00% 5.00% 5.00% 4.50% 4.20% 4.10% 60 4.00% 3.40% 3.50% 3.30% 99 3.00% 40 80 2.40% 2.30% 2.20% 2.00% 51 51 52 44 46 2
Slide 11: IBT pays a dividend of 4% of NAV (paid in two semi-annual instalments)
IBT pays a dividend of 4% of NAV (paid in two semi-annual instalments) Dividend paid out of capital reserves, supported by gains from M&A in portfolio – Prospective dividend yield as at 30 August 2024 is 4.5%¹ Dividend per share vs. total closing NAV at the preceding year end² Dividend per share (GB
Slide 12: Sector overview
Schroders Sector overview
Slide 13: Older…
Older… Over 65s growing fast and set to double Estimated and projected global population by broad age group, 1950–2100 Population (mn) Growth between 2024- 6 000 2100 Projection 5 000 25% 4 000 3 000 200% 2 000 -5% 1 000 -15% -15% 0 1950 1975 2000 2025 2050 2075 2100 0-4 5-14 15-24 24-64 65+ years o
Slide 14: Sicker…
Sicker… Over 50’s more likely to require pharmaceutical products Leading causes of death in over 65s Heart disease Cancer Incidence Incidence 6000 2500 0.03 Ischemic heart disease 2000 5000 0.02 4000 0.01 1500 3000 0.00 1000 Heart disease 2000 -0.01 500 1000 -0.02 Cancer 0 Age 0 -0.03 20 40 60 80 Ag
Slide 15: Richer…
15 2000 4000 6000 8000 10000 12000 14000 0 Source: OECD India* Indonesia Peru* *Non-OECD countries China (People's Republic… Richer… Mexico South Africa* Brazil* Colombia Costa Rica Türkiye OECD Healthcare statistics Argentina* Romania* Bulgaria* Pharmaceutical spend per capita in 20221 (US$) Croati
Slide 16: Innovation ensuring sector meets increasing demand
Innovation ensuring sector meets increasing demand After Covid slowdown in 2022, novel drug approvals recovered in 2023 Number of new clinical trials registered with Novel drug approvals by U.S. FDA² clinicaltrials.gov¹ 45,000 70 40,000 60 35,000 50 30,000 25,000 40 20,000 30 15,000 20 10,000 10 5,0
Slide 17: Innovation – expanding treatment options and modalities
Innovation – expanding treatment options and modalities The Trust invests in some of the most innovative companies in the biotech sector Cell based therapies Gene therapies RNA therapies Gene editing The transfer of intact, Offsetting the effect of a Modification or provision of A type of genetic en
Slide 18: Robust drug sales projections
Robust drug sales projections Market expects sales growth to be robust, especially in rare diseases Worldwide Total Prescription Drug Sales (2017–2028) WW Prescription Drug Sales ($bn) 1,800 1,600 94 Total CAGR (‘22–’28) = 5% 90 1,400 86 83 1,200 80 73 76 1,000 76 75 1,240 800 75 74 1,168 83 1,101 1
Slide 19: Biotech sector goes in and out of favour
Biotech sector goes in and out of favour M&A bringing optimism to biotech sector. IPO window cautiously reopening DESPAIR Company values depressed Stage 1 Despair RECOVERY M&A kickstarts and n Correc 5 valuations start to Sta very tio Re e CORRECTION recover Where do we Stag co ge 2 M&A dries up, in
Slide 20: Biotech equity financing – a key indicator of sector health
Biotech equity financing – a key indicator of sector health Q1 2024 is already the best quarter since Q2 2021 Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the
Slide 21: Biotech historically outperforms broader healthcare index
Biotech historically outperforms broader healthcare index Rapid interest rate increases have somewhat disrupted that relationship Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors m
Slide 22: Valuations
Valuations Biotech sector consolidating Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange rate changes may cause the value
Slide 23: Biotech trades inversely with the US interest rates
Biotech trades inversely with the US interest rates US long-term bond yields fell significantly in Q4 2023 XBI Smaller Cap Biotech vs US Treasuries 10-yr yield, August 2024 % 105 5.5 100 Dovish Fed rhetoric – 5 95 peak rates? 90 4.5 85 4 80 75 3.5 70 3 65 Silicon Valley Bank failure 60 2.5 Oct 22 De
Slide 24: Basket approach
Basket approach Building baskets of stocks to capture upside but spread risk Central Nervous Emerging M&A Obesity System Oncology targets Rationale • Less crowded space • Accelerating innovation • Pharma cash pile • Vast market potential • High unmet medical need • Huge market • Patent expiries & IR
Slide 25: Obesity
Obesity Potential blockbuster sub-sector Current treatments – strong potential… Quarter of the world’s adults expected to be obese by 2030 % of adults with obesity by 20301 India Peak sales (2029)2: Peak sales (2030)2: $19.3bn $27.3bn China …but several concerns US • Reimbursement / payment by insur
Slide 26: Obesity
Obesity What’s next? Next generation treatments currently in clinical trials Selected biotech companies with • Expansion for comorbidities (eg. cardiovascular, kidney, liver obesity projects diseases) • Improved mechanisms of delivery • Retaining muscle mass • Fewer negative side effects IBT’s appro
Slide 27: Portfolio analysis
Schroders Portfolio analysis
Slide 28: Investment process overview
Investment process overview The management team considers bottom-up factors as well as a top-down issues Single/wholly owned asset Top down Unmet medical need Market cap Monopoly position Financial strength Diversification Pricing power Management Therapeutic area Valuation Macro environment Liquidi
Slide 29: Investment process overview
Investment process overview The management team takes a bottom up approach with a top down overlay Idea generation Risk mitigation – micro Macro considerations – Investor & medical conferences – Binary events – Interest rate/business cycle – Schroders Healthcare Platform – Valuation sensitive – Cash
Slide 30: Portfolio composition
Portfolio composition The Trust is diversified over the following key metrics As at 31 August 2024: NAV of £283.0m; 76 quoted, as well as 2 unquoted funds and 5 directly-held unquoted companies % of investments by Size % of investments by Development Stage 2%4% Mega Cap >USD 30bn 7% 61% of NAV is in
Slide 31: Top ten holdings
Top ten holdings Diversification in size and therapeutic area As at 31 August 2024 Investment Therapeutics split Holding value £’000 % of NAV Intra-Cellular Therapies Central nervous system 14,020 4.7 Vera Therapeutics Auto-immune 13,718 4.6 Supernus Pharmaceuticals Central nervous system 13,703 4.6
Slide 32: Unquoted Portfolio – 8.9% of investments at 31 August 2024
Unquoted Portfolio – 8.9% of investments at 31 August 2024 Range of 5-15% of investments, managed by SV Health Investors SV Health Investors¹ SV Fund VI (SVF6)¹ • 30 year track record • Founded 2016 • $3.6bn historical commitments • 14 holdings 1% • 75 exits via IPOs and M&A 18% • Net IRR 16.0% • 4
Slide 33: Performance and discount/premium
Performance and discount/premium Active buyback policy Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange rate changes may c
Slide 34: Key investment themes for 2024
Key investment themes for 2024 Macro continues to drive top-down overlay, but bottom up also key Patent expiries boosting M&A Tactical use Greater exposure Election & IRA in revenue of gearing to SMID caps growth names Macro Baskets of considerations therapeutic areas driving top-down Redeploying e.
Slide 35: Appendix
Schroders Appendix
Slide 36: International Biotechnology Trust’s Board of Directors
International Biotechnology Trust’s Board of Directors Experienced and motivated Kate Cornish-Bowden Caroline Gulliver Patrick Magee Gillian Elcock Prof. Patrick Maxwell Chair Chair of Audit Senior Independent Independent Director Independent Director Background in Investment Committee Director Back
Slide 37: Inflation Reduction Act
Inflation Reduction Act US Election year – IRA should reduce focus on drug pricing Breakdown of expenditures by payers in 2022 1. Inflation Reduction Act passed 2022 by Democrats 11% 21% 2. Drugs made up 9% of US overall healthcare costs in 2022 29% 3. Medicare made up 21% of health spending in 2022
Slide 38: Details of fee arrangements (since move to Schroders)
Details of fee arrangements (since move to Schroders) Management fees overall likely to remain in line, OCF expected to reduce over time • Ongoing charge ratio expected to reduce marginally for FY24 and further over time (1) • IBT’s costs in connection with the transition to Schroders estimated to b
Slide 39: Investment Managers’ blog
Investment Managers’ blog Monthly publication on a current biotech or market theme Source: Schroders Available monthly at www.schroders.com/ibt 39
Slide 40: Key facts
Key facts Details Website www.schroders.com/IBT Net assets (Cum) GBP £283m (as at 30 Aug 2024) Listing London Stock Exchange Dividend Annual dividend of 4% of net asset value at August year end, and paid semi-annually Ex-div date Jan 2025 Daily volume 61k shares* Sedol 0455934 GB ISIN GB0004559349 T
Slide 41: Thank you
Schroders es International as Biotechnology °® Trust Thank you
Slide 42: Important information
Important information Marketing material. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange rate changes may cause the valu
Slide 43: Important information
Important information Schroders will be a data controller in respect of your personal data. For information on how Schroders might process your personal data, please view our Privacy Policy available at www.schroders.com/en/privacy-policy or on request should you not have access to this webpage. For
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