International Biotechnology Trust PLC · LSE:IBT
International Biotechnology Trust — Shareholder Meeting (December 2024)
49 slides from International Biotechnology Trust's shareholder meeting presentation, Dec 9, 2024
Slide 1: Welcome to International Biotechnology Trust plc's Annual General Meeting
Welcome to International Biotechnology Trust plc’s Annual General Meeting 9 December 2024 at 12.00 noon Gillian Elcock Caroline Gulliver Kate Cornish Bowden Patrick Magee Patrick Maxwell Chair of the Nomination Chair of the Audit Chair Senior Director Committee Committee Independent Director
Slide 2: SV Health Investors: EyeBio
SV Health Investors EyeBio – treating back of the eye disease
Slide 3: Disclaimer
Disclaimer This document is issued for information purposes only by SV Health Managers LLP which is authorized and regulated by the Financial Conduct Authority (“FCA”). SV Health Investors, LLC a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”)) (together with S
Slide 4: SV Health Investors: Biotech
SV Health Investors: Biotech We invest in innovative private biotech companies to deliver transformational drugs to patients 3
Slide 5: SV Biotech: decades of proven biotech venture investing
SV Biotech: decades of proven biotech venture investing Differentiated Expert team with Pharma demand transatlantic a proven track for biotech strategy record Since 2002, 2.0x 1.5x SV Biotech 21.0% Net IRR TVPI DPI has delivered returns of: As at 30th September 2024. SV Biotech refers to the current
Slide 6: Enhanced ownership drives exceptional returns in SV company creation
Enhanced ownership drives exceptional returns in SV company creation Developing novel therapeutics to treat blindness Remarkable 28-day efficacy in diabetic macular edema patients 2021 2022/3 2024 Before Created EyeBio Led Series A $3bn acquisition • UK-based company • Largest shareholder with • $1.
Slide 7: Net IRR calculation
Net IRR calculation Methodology for calculating current biotech extracted Net IRR for SV3-6: This extracted Net IRR has been calculated assuming the current biotech track record which considers all investments of the Biotech-specific funds: SV7 IMF and SV BCOF. It also includes the Biotech-specific
Slide 8: IBT AGM Full Year Results Presentation
IBT AGM Full Year Results Presentation International Biotechnology Trust plc (IBT) December 2024 Marketing material for professional clients only.
Slide 9: Agenda
Agenda 01 Introduction 02 Sector overview 03 Portfolio Analysis 04 Appendix 2
Slide 10: 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 11: 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 12: 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 13: 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 14: 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 15: 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 16: 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 17: 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 18: IBT pays a dividend of 4% of NAV
IBT’s 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 (
Slide 19: Sector overview
Schroders Sector overview
Slide 20: 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 21: 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 Ischemic heart disease 5000 2000 4000 1500 3000 1000 Heart disease 2000 500 1000 Cancer 0 0 20 40 60 80 Age 20 40 60 80 Age Chronic lower respirator
Slide 22: 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$) Croati
Slide 23: Innovation ensuring sector meets increasing demand
Innovation ensuring sector meets increasing demand After Covid slowdown in 2022, novel drug approvals recovered in 2023 Number of new clinical trials registered with Novel drug approvals by U.S. FDA² clinicaltrials.gov¹ 45,000 70 40,000 60 35,000 50 30,000 25,000 40 20,000 30 15,000 20 10,000 10 5,0
Slide 24: Innovation – expanding treatment options and modalities
Innovation – expanding treatment options and modalities The Trust invests in some of the most innovative companies in the biotech sector Cell based therapies Gene therapies RNA therapies Gene editing The transfer of intact, Offsetting the effect of a Modification or provision of A type of genetic en
Slide 25: Robust drug sales projections
Robust drug sales projections Market expects sales growth to be robust, especially in rare diseases Worldwide Total Prescription Drug Sales (2017–2028) WW Prescription Drug Sales ($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 26: 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 RECOVERY M&A kickstarts and valuations start to CORRECTION recover M&A dries up, Where do we investment outflows think we are now? EQUILIBRIUM Fair value
Slide 27: 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 28: 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 29: Valuations - not looking stretched esp in small / mid caps
Valuations - not looking stretched esp in small / mid caps 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 inve
Slide 30: 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 31: 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 32: Obesity
Obesity Potential blockbuster sub-sector Current treatments – strong potential… Next generation treatments currently in clinical trials • Expansion for comorbidities (eg. cardiovascular, kidney, liver diseases) • Improved mechanisms of delivery Peak sales (2029)2: Peak sales (2030)2: • Retaining mus
Slide 33: Portfolio analysis
Schroders Portfolio analysis
Slide 34: 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 35: 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 36: 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 37: 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 38: 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 39: 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 40: 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 41: Appendix
Schroders Appendix
Slide 42: 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 43: 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 44: 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 45: Investment Managers' blog
Investment Managers’ blog Monthly publication on a current biotech or market theme Source: Schroders Available monthly at www.schroders.com/ibt 38
Slide 46: 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 47: Thank you
Schroders es International ww Biotechnology °® Trust Thank you
Slide 48: 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 49: 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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