The mega deals reshaping the biotechnology sector

Big pharma is facing serious competition as expiring drug patents are opening the way for other companies to produce drugs at much lower prices.

The shift has spurred on pharma giants to look around for attractive smaller biotech companies, with the possibility of developing new drugs.

The International Biotechnology Trust invests in biotech-driven pharmaceutical companies, a sector that is being reshaped by these high-profile mergers and acquisitions.   

Already this year two of its top holdings have joined forces as Amgen, the world’s biggest biotechnology company, snapped up Micromet, a cancer-focused biotech group, with the aim of developing more advanced cancer therapies.

The sector has shown strong growth over the past three years, with the NASDAQ Biotech Index up 11.5%, compared with the S&P 500’s increase of 1.2%.

David Pinniger, investment manager of the International Biotechnology Trust, tells Citywire about the trust and explains why, despite a 35% increase in its net asset value over the past five years, it continues to trade at an average discount of 14%.