Biotech Growth Trust's estimated net asset value has fallen about 7% since the end of September, while its shares have dropped further, after a rise in US rates hit smaller biotechnology companies. The trust has continued to buy back and cancel shares.

What happened

The trust, ticker LSE:BIOG, reported a NAV of 1,503.82p per share at the close on 30 October, according to an AI-generated summary on of a notice published on 2 November. That compares with 1,624.20p in the factsheet for 30 September, a decline of about 7.4% on our calculation.

The September factsheet explains the start of the slide. NAV fell 11.3% in the month, against a 2.0% rise for the Nasdaq Biotechnology index in sterling terms. Manager OrbiMed cited a 25 basis point rise in US rates on 16 September and a sharp move in Treasury yields, which hurt the trust's large overweight in small-cap biotech. (LSE:BIOG)

Buybacks have continued. A notice on 30 October recorded the purchase of 120,000 shares at 1,373.59p for cancellation, the summary said, with own-share notices also listed on 9, 16 and 23 October. Voting rights stood at 18,304,477 at 31 October, with no shares in treasury.

Why it matters for investors

Biotech Growth Trust is a specialist Investment trust in the biotechnology sector, and appears on the FTSE All-Share constituent list published by Hargreaves Lansdown, checked on 3 November. It has no gearing following the September reduction: portfolio managers Geoffrey Hsu and Josh Golomb trimmed and exited some small-cap positions and took AIC gearing to 0.0% by month-end.

That change follows a notable run. Over the year to 30 September, NAV rose 45.4% and the shares 54.0%, against 48.5% for the benchmark. Removing gearing lowers sensitivity to further falls, but would also limit participation in a rebound; that is our analysis, not a company statement.

The portfolio remains concentrated in North America, at 82.9%, with the top ten positions totalling 32.3%. Biogen (4.4%), Arcutis Biotherapeutics (3.6%) and Vertex Pharmaceuticals (3.4%) led at 30 September. Arcutis, Guardant Health and CareDx contributed most in that month; uniQure, Vogenx and Corbus Pharmaceuticals detracted most.

How the shares have performed

AJ Bell's delayed page showed a trade at 1,381.76p on 3 November, up 2.2% from a previous close of 1,352p. Hargreaves Lansdown's list showed 1,382p. Compared with the 1,548p at 30 September, that is a fall of around 10.7%, on our calculation.

The 52-week range is 1,054.50p to 1,786p, and Market Value about £253m. AJ Bell estimated NAV at 1,463.83p and a discount of 7.64%, which appears to be based on the previous close. The discount at 30 September was 4.7%, and 10.9% at the 31 March year-end, according to a summary of the annual report.

Longer-term figures are volatile. NAV rose 98.6% over three years to 30 September, ahead of the benchmark's 67.2%, but 22.4% over five years, behind its 43.4%. In the year to 31 March, NAV per share increased 73.4% as the trust spent £69.5m repurchasing 7,183,277 shares.

The trust pays no regular income: no Dividend was recommended for that year and AJ Bell shows no yield.

What to watch next

The half-year period ended on 30 September, and last year's interim report was published on 20 November. No date for this year's report appears in the announcements reviewed.

OrbiMed says small and mid-cap biotech could recover once Treasury yields settle and describes the deal backdrop as supportive. Daily NAV notices, and weekly buyback filings, will show whether that view is borne out.