The Biotech Growth Trust plc (LON:BIOG) Co-Portfolio Manager Josh Golomb caught up with DirectorsTalk to discuss his background in biotechnology investing, the long-term investment opportunity in the sector, the factors behind BIOG’s recent performance, the recovery in biotech valuations and increased pharmaceutical M&A activity.
Q1: Josh, can you just tell us a little about your background and what led you to specialise in investing in biotechnology?
A1: I went to the engineering school at Columbia University and earned a degree in operations research and engineering management systems. I took a lot of math and statistics and business classes and learned how to assign probabilities to situations.
The last few semesters that I was there, I took advantage of being in New York City and interned at a firm that was advising biotech companies.
Now, this was the late 90s, and the internet bubble was happening. A lot of my classmates went to startups, technology startups in particular and I was concerned that that bubble would burst as companies were being valued on a number of clicks. This was a while ago.
Well, the bubble did burst. However, also during that time period, the human genome was being mapped, and the US had a baby boomer population that was aging and heading towards retirement.
So, I knew that population would need new therapies. We had an aging and growing population in this country, which was the largest pharmaceutical market and the mapping of the human genome would open up targets for new drugs to be developed.
So, I took the learnings that I had at the internship, and I took the opportunity to go back to school at night to Columbia to take some more biology classwork to really home in on my analysis.
I’ve been an investor in the space for over 20 years now, so we really enjoyed investing in the discovery of new drugs.
Q2: Now, for investors who may not currently have had much exposure to the sector, what makes biotechnology such a compelling long term investment opportunity?
A2: We live in a society where populations always need new medicines for diseases, at least until they’re all cured, which I don’t see happening in the foreseeable future.
Improvements are not just welcome, but they’re paid for and the drugs exceed inflation from a growth perspective.
I grew up as a child in the 1980s, where on the nightly news, I’d hear about the AIDS epidemic and how people were dying very quickly; three or four months after diagnosis, maybe six months.
In the 1990s, a triple cocktail of three medicines was established to keep the disease in check. Some of these medicines had to be taken every six or eight hours so people were walking around with stopwatches or alarms on their watches and pills that they had to take at various times during the day.
By the middle of the next decade, so in the early 2000s, around 2007, I believe, these medicines were replaced with one pill containing three medicines taken once a day, and that kept the disease in check.
Now, the disease became chronic and just recently, in fact, a shot is available to high risk individuals to prevent the disease that they can take twice a year. So, it’s really been transformational from a disease that if you contracted it, it was a death sentence, to now you can prevent it by taking a shot twice a year.
Now, cancer is another therapeutic category. We’ve had some really exceptional advances of late. However, they’re not cures and simply extend the life of patients so there’s always a need for new therapies.
This creates investment opportunities that the trust researches and invests in.
Q3: Biotech Growth Trust has enjoyed a very strong run, with particularly impressive one in three year returns. What has driven that outperformance and what differentiates BIOG from other trusts that are in that sector?
A3: The biotech sector, particular smaller development stage companies, were trading at pretty significant valuations, discounts to their historical valuations over the last five years, and we’ve benefited from a recovery as valuations have continued to normalize.
There have also been an uptick of acquisitions by large pharmaceutical companies who are looking to augment their revenue growth and pipeline during this time period, in particular over the last 18 months.
Both these factors have served as a nice tailwind for the sector.
The trust has focused on the most undervalued companies in the sector, as well as those that would be attractive to an acquirer and that served us well over the recent time period.
Q4: So, after a challenging period for biotechnology, and as you pointed out, the sector staged a strong recovery. What’s changed? Why do you think now is particularly interesting for or an interesting time for investors to be looking at biotech?
A4: So, while the stocks in the sector, their share prices were underperforming, the underlying innovation in the companies was strong and good companies were funded and their programs move forward.
Now, there has been a lot of political and regulatory headwinds that have been cleared over the last 18 months that really has created an opportune time for the sector.
Drug pricing uncertainty that had existed under President Trump, President Trump’s Most Favoured Nation initiative has been resolved as companies have reached settlements with the Trump administration.
Questions on funding for the FDA, as well as the leadership in the FDA, have turned over during the Trump administration and these regulatory uncertainties have been lifted as new drug approvals have remained at levels in 2025 that we saw since 2017.
So elevated levels, drug approvals haven’t changed. In fact, the ability for a breakthrough medicine to come to patients sooner has been made available by the Trump administration as well. This sets up an opportune time to invest in the sector because the roadblocks that were there 18 months ago or the uncertainties have been lifted.
Q5: So just looking across the portfolio and the wider biotech sector today, what developments are you most excited about? And where do you see the biggest opportunities emerging?
A5: I won’t talk about portfolio positions specifically, as my compliance department doesn’t like me to do that.
There’s been a revolution in the gastrointestinal cancer space, in particularly pancreatic cancer, which is really one of the most deadly cancers and is often diagnosed late after it’s metastasized and is usually terminal.
Just recently, a new drug, Resonque, or daraxonrasib which is its chemical name, has been approved in second-line pancreatic cancer. In a clinical study that was presented at the American Society of Clinical Oncology in June, they showed a near doubling of overall survival, showing 13.2 months relative to 6.7 months. So, pretty significant overall survival increase relative to standard chemotherapy cocktail.
So this is a pill that you take once a day, as opposed to IV chemotherapy. Now, it does have side effects, but it has different side effects relative to chemotherapy and in my opinion, the juice is worth the squeeze, as overall survival is the gold standard, and all cancer patients want to live longer.
Now, I think what’s exciting to answer your question is this drug, as well as other RAS inhibitors, which is the class of drugs that this is in, are being tested in combinations with other drugs in earlier lines of pancreatic cancer. Hopefully, they improve survival further there.
So, as we treat patients earlier, the increase in overall survival can be felt to a larger extent in those patients.
It’s also being tried in a certain percentage of lung cancer patients as well as in colorectal cancer patients. This should enable the drugs to reach more patients who are less frail and have a better quality of life impact in addition to increasing overall survival.
