Biotech Growth Trust posts strong FY2026 gains as NAV outperforms benchmark

Biotech Growth Trust PLC (LON:BIOG) has announced its Annual Report for the Year Ended 31 March 2026.

The statements below are extracted from the Company’s annual report for the year ended 31 March 2026 (the Annual Report).   The Annual Report, which includes the notice of the Company’s forthcoming annual general meeting, will be posted to shareholders on 10 June 2026. Members of the public may obtain copies from Frostrow Capital LLP, 25 Southampton Buildings, London WC2A 1AL or from the Company’s website at https://www.biotechgt.com/corporate-information/annual-report-2026 Up to date information on the Company, including daily NAV, share prices and fact sheets, can also be found on the website.

The Annual Report will be submitted to the Financial Conduct Authority and will shortly be available in full, unedited text for inspection on the National Storage Mechanism (NSM): https://data.fca.org.uk/#/nsm/nationalstoragemechanism

FINANCIAL HIGHLIGHTS

as at 31 March 2026

*   IFRS Measure

^   Alternative Performance Measure

†   NASDAQ Biotechnology Index (total return, net of withholding tax, sterling adjusted)

**   Source: Morningstar

CHAIR’S STATEMENT

INTRODUCTION AND RESULTS

I am pleased to report that, during the year ended 31 March 2026, the Company delivered very strong performance. The Company’s net asset value (“NAV”) per share increased by 73.4%, significantly outperforming the NASDAQ Biotechnology Index (total return, net of withholding tax, sterling adjusted) (the “Benchmark”), which rose by 35.0% over the same period. While returns over the past few years have been volatile, it is nonetheless pleasing to see the Company’s investment strategy yielding such a substantial absolute return and a high level of relative outperformance.

Performance over the year was driven by a combination of improving sector sentiment, effective portfolio positioning and a number of successful stock-specific outcomes. After a subdued start to the financial year, marked by macroeconomic uncertainty and policy-related headwinds, conditions for biotechnology improved meaningfully as interest rate expectations shifted in the U.S., political and regulatory risks became clearer and merger and acquisition (M&A) activity accelerated. The portfolio benefitted in particular from OrbiMed’s sustained emphasis on small and mid-capitalisation biotechnology companies, a positioning that has reflected their conviction for some time. While this focus weighed on returns in the previous financial year, it was the principal reason for the Company’s strong absolute and relative performance during the year. The Company also benefitted from six announced M&A transactions involving portfolio holdings, reinforcing the effectiveness of OrbiMed’s long standing investment approach.

The Company started the year ungeared and ended with modest gearing of 3.3%. Gearing contributed 2.4% to the Company’s NAV total return during the year, reflecting the disciplined use of leverage as conviction in the recovery strengthened. The Board continues to view gearing as a useful tool when it is cost effective, deployed appropriately and maintained within conservative limits.

The Company did not invest in any new private companies during the year and, at the year end, unquoted investments comprised only 0.5% of the portfolio. This reflects both the subdued initial public offering (IPO) market and a deliberate emphasis on liquidity and flexibility.

The majority of the Company’s assets are denominated in U.S. dollars and, as a result, NAV performance was negatively affected by the strength of sterling during the year. The average exchange rate over the year was $1.34, some 4.7% stronger than the previous year’s average of $1.28, creating a currency headwind despite strong underlying portfolio performance.

The Company reduced its exposure to Chinese biotechnology companies, which represented 4.7% of the portfolio at the year end. Valuations across the Chinese biotech sector remained under pressure amid a challenging macroeconomic, geopolitical and regulatory environment. Nevertheless, the Portfolio Manager continues to see China emerging as an increasingly important centre for biotech innovation and development productivity, supported by government prioritisation of the sector. OrbiMed’s teams in Shanghai and Hong Kong are well placed to identify and conduct due diligence on attractive opportunities in the region.

Overall, the Board is encouraged by the breadth and quality of the drivers underpinning the Company’s performance during the year, with returns led in particular by strong contributions from small and mid – capitalisation biotechnology companies. While we remain mindful of the inherent volatility of both the sector and the Company’s active approach, it is reassuring to see the portfolio respond strongly as conditions improved and investment theses were realised. Our confidence in the Portfolio Manager and their disciplined, research-led strategy is reinforced by these results. I encourage shareholders to read OrbiMed’s Review, which provides further insight into the key investment themes and company-specific developments that contributed to performance.

CAPITAL STRUCTURE

The Company’s share price total return for the year was 67.1% (2025: -24.2%). The share price discount to the NAV per share widened from 7.6% at the start of the Company’s financial year to 10.9% at the year end, materially wider than the Board’s long term target of no more than 6%.

This outcome was driven by an unusually large movement in NAV per Share on the final day of the financial year, which rose by 8.3%, a very significant increase in the space of a single day. Given the Company’s high exposure to North American investments, much of this uplift occurred after the London market had closed. At the UK market close on 31 March, the estimated discount was 6.6%; however, once the US market closed and the full increase in the NAV per Share was reflected, the discount widened to 10.9%. The principal driver of the NAV appreciation that day was the announcement that Biogen Inc. had entered into an agreement to acquire one of the Company’s portfolio holdings, Apellis Pharmaceuticals, Inc.

The Company’s shares traded at a discount throughout the year, leading to the repurchase of 7,183,277 shares, at an average discount of 8.5% to the Company’s NAV per share at the time, at a total cost of £69.5 million. Shareholders will be aware that the Company pursues an active discount management policy, buying back shares when the discount of the Company’s share price to its NAV per share is wider than 6% (under normal market conditions). Share buybacks contributed 2.8% to the Company’s NAV return over the year, more than double the Company’s ongoing charges, underscoring the value created through disciplined discount management. In November 2025, reflecting both the overall quantum of buybacks and the Board’s commitment to the Company’s policy, we held a General Meeting to renew shareholder authority to buy back shares when it became clear that the authority granted at the annual general meeting (AGM) in 2025 would be exhausted before the 2026 AGM.

The renewal was approved by shareholders, with 99.7% of votes cast in favour, enabling the Company to continue operating its discount management policy. Since the renewed authority will expire at the conclusion of the Company’s forthcoming AGM, in line with usual practice the Company will ask shareholders to renew the authority again at the AGM in July.

As we have previously commented, the shares can trade at a discount wider than 6%, particularly in volatile or muted markets such as those we have experienced recently. However, the Company remains committed to protecting a 6% share price discount over the longer term. Since the year end, a further 529,600 shares have been bought back for cancellation and at the time of writing the share price discount stands at 10.7%.

RETURN AND DIVIDEND

The revenue return per share was -1.9p (2025: 0.0p). This reflects the low yield generated from the biotechnology sector and, in particular, the small and mid-cap companies in the sector that comprise much of the portfolio.

As a result, no dividend is recommended in respect of the year ended 31 March 2026 (2025: nil).

BOARD CHANGES

In September we were delighted to announce the appointment of Professor Dame Jenny Harries as a non-executive director. Dame Jenny’s unparalleled experience in public health leadership and global health strategy will bring an invaluable perspective to the Board. Her appointment marks the end of an extended period of Board refreshment, with no director retirements expected in the medium term.

PERFORMANCE FEE

There is currently no provision within the Company’s NAV for any performance fee payable at a future calculation date. The arrangements for performance fees are described in detail on page 48 of this Annual Report but I would highlight that it is dependent on the Company’s long-term outperformance: any outperformance has to be maintained for 12 months after the relevant calculation date and only becomes payable to the extent that the outperformance gives rise to a total fee greater than the total of all performance fees paid to date. This ensures that a performance fee is not payable for any outperformance that contributes to recovery of prior performance.

ANNUAL GENERAL MEETING

The Company’s AGM will be held at the Barber-Surgeons’ Hall, Monkwell Square, Wood St, Barbican, London EC2Y 5BL on Thursday, 16 July 2026 at 12 noon. As well as the formal proceedings, there will be an opportunity for shareholders to meet the Board and the Portfolio Manager, and to receive an update on the Company’s strategy and its key investments.

I very much look forward to seeing as many shareholders as possible. For those investors who are not able to attend the meeting in person, a video recording of the Portfolio Manager’s presentation will be uploaded to the website after the meeting. Shareholders can submit questions in advance by writing to the Company Secretary at [email protected].

I encourage all shareholders to exercise their right to vote at the AGM. The Board strongly encourages shareholders to register their proxy voting instructions online in advance of the AGM. Registering your voting instructions in advance will not restrict you from attending and voting at the meeting in person should you wish to do so, but ensures your vote is registered if you are no longer able to attend on the day. The results of the proxy votes will be published immediately following the conclusion of the AGM by way of a stock exchange announcement and on the Company’s website: www.biotechgt.com.

ARTICLES OF ASSOCIATION

Under Resolution 15 in the Notice of AGM, the Company is proposing to adopt new articles of association. The sole change proposed is the inclusion of a new article which will provide a mechanism to ensure continuity of governance in the unlikely event that the number of directors falls below the minimum required. We consider this to be a prudent governance measure and further details are set out in the explanatory notes to the resolutions.

OUTLOOK

After several challenging years, the outlook for the global biotechnology sector is more constructive, albeit not without risk. Improved visibility around U.S. regulatory and pricing frameworks, a stabilising interest rate environment and renewed M&A activity have allowed investor attention to return to sector fundamentals. Clearly, uncertainties remain, including pricing pressures, funding constraints for earlier – stage companies, execution risk around clinical development and a selective capital markets backdrop. Nevertheless, the sector is entering a period rich with catalysts, supported by a strong pipeline of clinical data, supportive regulatory decisions and promising product launches across a range of therapeutic areas.

The Company’s returns have been volatile in recent years, reflecting both the nature of a young, innovation – driven sector and the Company’s active investment approach. As conditions have begun to normalise following a prolonged period of macroeconomic and regulatory uncertainty, the Board remains confident in the Portfolio Manager’s investment strategy and their disciplined approach. While volatility may persist, we believe the portfolio is well positioned to benefit from a more sustained recovery in the sector.

Roger Yates

Chair

2 June 2026