Biotech Growth is set to receive a substantial uplift after Forte Biosciences agreed to a $2.2 billion cash takeover by Argenx SE.
Forte accounted for about 3% of Biotech Growth’s portfolio before the announcement. Argenx has offered $77 per share, representing a 40.5% premium to Forte’s closing price on the previous Friday.
Biotech Growth first invested in Forte through a private placing in November 2024. Its manager, OrbiMed, paid $5.55 per share. The agreed takeover price is therefore close to 14 times the trust’s original entry price.
The investment was made to support the development of Forte’s lead drug, FB102. The treatment is being developed for autoimmune diseases and has completed two clinical trials linked to coeliac disease and vitiligo. Forte has also identified possible applications in other autoimmune conditions.
The deal is expected to add about 1.2% to Biotech Growth’s net asset value. That is a meaningful contribution from a holding that represented a relatively small part of the portfolio.
The takeover also gives Biotech Growth a clear route to realise value from the investment. Early-stage biotechnology companies often face high clinical, regulatory and funding risks. A cash acquisition by a larger pharmaceutical company can reduce those risks and convert a developing asset into a defined return.
Forte is the ninth Biotech Growth portfolio company to become involved in a merger or acquisition during the past year. This level of activity shows that larger pharmaceutical groups continue to buy smaller biotechnology businesses with promising drug candidates.
Biotech Growth Trust plc (LON:BIOG) seeks capital appreciation through investment in the worldwide biotechnology industry. The Company and the Company’s Portfolio Manager believe that there is a high congruence between companies that seek to act responsibly and those that succeed in building long-term shareholder value.
