Kepler’s March research note frames biotechnology as a sector moving out of a difficult cycle. After a severe downturn between 2021 and 2025, pressure from higher interest rates and US political concerns appears to be easing. Sentiment towards the sector has already improved, yet valuations are still described as exceptionally low, even after the recent rally.
Biotechnology has historically been a strong long-term growth market, but it is not a smooth one. The sector can move sharply around funding conditions, clinical trial results, regulation and takeover activity.
Biotech Growth Trust’s Portfolio Manager’s Geoff and Josh believe the recovery can continue. Their view rests on three main factors: low valuations, progress across several therapeutic areas and the need for large pharmaceutical companies to acquire new drugs. The last point is particularly important. Large pharma groups need to rebuild their pipelines, and smaller biotechnology companies with promising treatments can become acquisition targets.
BIOG is designed to give investors strong exposure to that opportunity. It is return-seeking, with a clear tilt towards small-cap companies and the use of gearing. That makes it a higher-risk option, but also one with greater potential sensitivity to a biotechnology recovery. This is a focused vehicle for investors who want to back a sector rebound more directly.
Biotech Growth Trust plc (LON:BIOG) seeks capital appreciation through investment in the worldwide biotechnology industry.
