ANNUAL REPORT

FOR THE YEAR ENDED 31 MARCH 2023

The Biotech Growth Trust PLC Annual Report for the year ended 31 March 2023

Disability Act

Copies of this Annual Report and other documents issued by the Company are available from the

Company Secretary. If needed, copies can be made available in a variety of formats, including

Braille, audio tape or larger type as appropriate. You can contact the Registrar to the Company,

Link Group, which has installed telephones to allow speech and hearing impaired people who have

their own telephone to contact them directly, without the need for an intermediate operator, for this

service please call 0800 731 1888. Specially trained operators are available during normal business

hours to answer queries via this service. Alternatively, if you prefer to go through a ‘typetalk’

operator (provided by the RNID) you should dial 18001 followed by the number you wish to dial.

This report is printed on Revive 100% White Silk a totally recycled paper

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

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A member of the Association of Investment Companies

CBP008251

THE BIOTECH GROWTH TRUST PLC

25 SOUTHAMPTON BUILDINGS

LONDON WC2A 1AL

WWW.BIOTECHGT.COM

In order to achieve its investment objective, the Company invests in a





 26

and 27

ORBIMED CAPITAL LLC – PORTFOLIO MANAGER



















In





















HOW TO INVEST















STRATEGIC REPORT

Financial Highlights 1

Chairman’s Statement 2

Company Performance 5

Investment Portfolio 7

Portfolio Manager’s Review 9

Business Review 26

GOVERNANCE

Board of Directors 38

Corporate Governance 40

Report of the Directors 48

Statement of Directors’ Responsibilities 54

Audit Committee Report 55

Directors’ Remuneration Report 60

Directors’ Remuneration Policy 64

Independent Auditor’s Report 65

FINANCIAL STATEMENTS

Income Statement 73

Statement of Financial Position 74

Statement of Changes in Equity 75

Statement of Cash Flows 76

Notes to the Financial Statements 77

FURTHER INFORMATION

Shareholder Information 95

Glossary of Terms and Alternative

Performance Measures 96

How to Invest 100

Notice of the Annual General Meeting 101

Explanatory Notes to the Resolutions 104

Company Information 107





www.biotechgt.com

@biotechgt

THE BIOTECH GROWTH TRUST PLC

The Biotech Growth Trust PLC seeks

capital appreciation through investment

in the worldwide biotechnology industry.

Designed and

printed by:

perivan.com

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

* Source: Morningstar; ^Alternative Performance Measure (see glossary beginning on page 96); † NASDAQ Biotechnology Index (sterling adjusted)

** UK GAAP Measure













           











Figures have been rebased to 100 as at 31 March 2022.

Source: Morningstar

-11.0% +5.4%

Net asset value per share

(total return)*^

2022: -33.8%

Benchmark*

†

2022: -7.4%

-12.8%

Share price

(total return)*^

2022: -37.0%

852.6p

Net asset value per share**

2022: 957.8p

783.0p

Share price

2022: 898.0p

£330.3m

Shareholders’ funds**

2022: £394.2m

8.2%

1.1%

Ongoing Charges^

2022: 1.1%

Active Share*^

2022: 77.3%

Discount of share price to net asset

value per share*^

2022: 6.2%

76.6%

for the year to 31 March 2023

TOTAL RETURN PERFORMANCE

as at 31 March 2023

FINANCIAL HIGHLIGHTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

INTRODUCTION AND RESULTS



The challenging economic conditions of the previous

year carried over to the year under review, leading to

disappointing absolute and relative performance; the

0% (2022:

-33.8%), and the share price total return was -12.8% (2022:



the NASDAQ Biotechnology Index (sterling adjusted),

which over the year rose 5.4% (2022: -7.4%). The disparity



and its share price reflected a widening of the share price



2% at the year end.







during the year, particularly against the U.S. dollar, with

the average exchange over the period being $1.204, some





year-end from 8.4% at the beginning of the year, detracted



theyear.





beginning on page 9. In general, rather than reflecting



innovation from the sector, the price of biotechnology





earnings or revenues  has remained muted. Alongside



performance between large and small capitalisation (cap)

s



favour larger companies with well-established business

models and earnings over the potentially more exciting

opportunities offered by faster growing and smaller

companies.



companies was a headwind to performance. The Portfolio

Manager continues to believe that the high levels of



investment opportunity, however the companies in



and geopolitical environments. Accordingly, the Portfolio



has not made any new crossover investments (investments



net investments represented 9%

(2022: 13%) of the portfolio at the year end.

While performance this year has been disappointing, our

Portfolio Manager expects that the overweighting of small

and mid cap companies will deliver positive results to

shareholders. In particular, they expect that the divergence

in the valuations of large and small/mid cap companies

will close. In addition, they anticipate that we can expect to

see continued consolidation in the biotechnology industry,



with promising pipelines of drugs and therapies to address

gaps in their own portfolios and, in many cases, impending

patent expirations which threaten their future earnings.



challenges for small biotechnology companies, as they

navigate the changing landscape of the industry. Above





be transformational for the sector and, we hope, for the



ROGER YATES

CHAIRMAN’S STATEMENT

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

CAPITAL STRUCTURE



year, leading to the repurchase of 2,421,263 shares, at an

average discount of 8.0











conditions).

At the period end there were 38,737,419 shares in issue

and the share price traded at an 8.2% discount to the cum



while it remains possible for the shares to trade at a



remains committed to protecting a 6% share price discount

over the longer term. Since the year end, a further 1,057,959



time of writing the share price discount stands at 7.6%.

RETURN AND DIVIDEND

The revenue return per share was (1.6)p (2022: 0.0p). No

dividend is recommended in respect of the year ended

31March 2023 (2022: nil).

BOARD AND MANAGEMENT CHANGES

During the year, Andrew Joy retired from the Board



retirements in the coming years and we are focused on

successfully managing transitions with the right individuals

and mix of people. Improving the diversity of the Board will





found on page 45 of this report.

The Board also welcomes

Josh Golomb has been appointed as co-portfolio manager

of the . Further details can be found in

their report 



resourced portfolio management team.

PERFORMANCE FEE



for any performance fee payable at a future calculation

date. The arrangements for performance fees are described

in detail on pages 48 and 49 of this Annual Report but

I would highlight that it is dependent on the long-term

: 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.

INVESTMENT POLICY



every Board meeting to ensure the limits and restrictions

remain appropriate and must recommend any material

changes to shareholders for approval.

This year, following consultation with our advisers, the

Board is proposing a number of small changes to the

investment policy in order to clarify the scope of the use of



The proposed changes will:

 Enable derivative instruments (other than equity swaps)



subject to an aggregate net exposure of 5% of the value



the relevant transaction; and

 Remove the current limit for equity swaps but impose

a limit on aggregate net counterparty exposure,

through a combination of derivatives and equity swap

transactions, of 12% of the value of the gross assets of



THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

The proposed amendments have been approved in principle



ANNUAL GENERAL MEETING



40

2023 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



Last year the heatwave in July may have prevented some



forward to seeing as many shareholders as possible this

year, weather permitting. For those investors who are not

able to attend the meeting in person, a video recording of



the website after the meeting. Shareholders can submit



at info@frostrow.com.

I encourage all shareholders to exercise their right to vote

at the AGM and to register their votes online in advance.

Registering your vote in advance will not restrict you from

attending and voting at the meeting in person should

you wish to do so, but as the past few years have shown,



Details of the proxy votes received

will be published as soon as practicable following the





www.biotechgt.com.

OUTLOOK

The biotechnology sector has been a critical area of

innovation and growth in recent years with the rate of



effective treatments continuing apace. With a focus on

precision medicine, cell and gene therapy, digital health,

and rare diseases, small biotechnology companies are

at the forefront of this innovation. Additionally, advances

in technology, the availability of big data and the use of



which have the potential to revolutionise the industry.

,

including regulatory hurdles and uncertainty around

funding. Drug development will remain a long-term and

costly pursuit. The broader economic environment also

remains challenging: global economic growth has slowed,

the cost of capital has risen, and geopolitical instability and

ongoing supply chain disruptions continue to challenge the

post-pandemic recovery. More broadly, elevated energy

prices and surprisingly persistent inflation will continue to

impact business investment.

Although the impact of these factors will continue to





that could elicit a recovery in the biotechnology sector and

so their overall investment strategy remains unchanged.



most innovative and promising opportunities in the

biotechsector.

The Board shares their view that the fundamental

investment themes for the biotechnology sector remain



with strong prospects for capital enhancement, long-term

investors will be rewarded.

Roger Yates



14 June 2023

CHAIRMAN’S STATEMENT 

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

COMPANY PERFORMANCE



































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









                 









            







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

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

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









to 31 March 2023

PERFORMANCE SINCE THE DATE OF APPOINTMENT OF ORBIMED CAPITAL LLC AS PORTFOLIO MANAGER

to 31 March 2023

SHARE PRICE DISCOUNT TO THE NAV PER SHARE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT





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



































HISTORIC PERFORMANCE FOR THE YEARS ENDED 31 MARCH

2018 2019 2020 2021 2022 2023

Net asset value per share total return*^ (6.7%) 5.3% 18.5% 55.1% (33.8%) (11.0%)

Share price total return*^ (6.1%) 4.6% 10.9% 75.2% (37.0%) (12.8%)

 (2.2%) 13.0% 1.2% 25.1% (7.4%) 5.4%

Net asset value per share 747.5p 786.8p 932.4p 1,446.4p 957.8p 852.6p

Share price 702.0p 734.0p 814.0p 1,426.0p 898.0p 783.0p

Discount of share price to net asset value

per share*^ 6.1% 6.7% 12.7% 1.4% 6.2% 8.2%



fees)^

1.1% 1.1% 1.1% 1.1% 1.1% 1.1%

Gearing^ 6.8% 5.5% 9.0%

6.8% 8.4% 7.8%

* Source: Morningstar

^ Alternative Performance Measure (see glossary beginning on page 96).

to 31 March 2023

FIVE YEAR PERFORMANCE

COMPANY PERFORMANCE 

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

INVESTMENT PORTFOLIO

INVESTMENTS HELD AS AT 31 MARCH 2023

Security Country/Region #

Fair value

£’000

% of

investments

Biogen United States 22,710 6.4

Sarepta Therapeutics United States 19,727 5.5

BioMarin Pharmaceutical United States 19,508 5.5

Regeneron Pharmaceuticals United States 15,940 4.4

Amgen United States 14,993 4.2

Keros Therapeutics United States 14,183 4.0

Travere Therapeutics United States 13,712 3.9

Ionis Pharmaceuticals United States 13,474 3.8

Argenx Netherlands 13,409 3.8

XtalPi*  12,899 3.6

Ten largest investments 160,555 45.1

Syndax Pharmaceuticals United States 12,897 3.6

Xenon Pharmaceuticals  12,707 3.6

 United States 11,440 3.2

uniQure Netherlands 10,075 2.8

Mersana Therapeutics United States 9,549 2.7

 United States 9,388 2.6

Amylyx Pharmaceuticals United States 9,284 2.6

2seventy bio United States 9,205 2.6

  9,158 2.6

 Ireland 9,061 2.6

Twenty largest investments 263,319 74.0

 United States 8,807 2.5

Aerovate Therapeutics United States 8,751 2.4

RAPT Therapeutics United States 6,362 1.8

Innovent Biologics  5,783 1.6

StemiRNA Therapeutics*  5,204 1.5

Kezar Life Sciences United States 4,862 1.4

 United States 4,640 1.3

Amicus Therapeutics United States 4,615 1.3

Janux Therapeutics United States 3,387 0.9

 United States 3,319 0.9

Thirty largest investments 319,049 89.6

 United States 3,319 0.9

 United States 3,302 0.9

 United States 2,974 0.8

 Germany 2,852 0.8

Apellis Pharmaceuticals United States 2,761 0.8

YS Biopharma  2,723 0.8

Remegen  2,428 0.7

BioAtla United States 2,315 0.7

 Asia 2,164 0.6

Intellia Therapeutics United States 1,950 0.5

Forty largest investments 345,837 97.1

Prelude Therapeutics United States 1,597 0.5

Essa Pharma  1,558 0.4

Edgewise Therapeutics United States 1,426 0.4

  1,371 0.4

Gracell Biotechnologies**  1,224 0.4

Suzhou Basecare Medical  1,022 0.3

 United States 980 0.3

Enliven Therapeutics United States 824 0.2

Galecto  454 0.1

Repare Therapeutics  390 0.1

Fifty largest investments 356,683 100.2

# Primary listing

† Partnership interest

* Unquoted investment

** Gracell Biotechnologiess held through a varary beginning on page 96 for further

details.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

INVESTMENT PORTFOLIO 

Security Country/Region #

Fair value

£’000

% of

investments

AWAKN Life Sciences  373 0.1

 United States 173 

AWAKN Life Sciences warrant 16/06/2023*   

AWAKN Life Sciences warrant 21/03/2024*   

Imara United States  

 357,229 100.3

equity s

BeiGene  5,022 1.4

 (6,224) (1.7)

Total OTC equity swaps (1,202) (0.3)

Total investments including OTC equity swaps 356,027 100.0

All of the above investments are equities unless otherwise stated.

# Primary listing

† Partnership interest

* Unquoted

PORTFOLIO BREAKDOWN

Investments

Fair value

£’000

% of

investments

Quoted

Equities

336,962 94.6

Unquoted

Equities 18,103 5.1

Partnership interest 2,164 0.6

20,267 5.7

Derivatives

equity swaps (1,202) (0.3)

Total investments 356,027 100.0

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

PERFORMANCE REVIEW





for the year ended 31 March 2023. 

value per share total return was down 11.0% during the

4



a sterling adjusted basis (the ).

Macroeconomic factors rather than industry fundamentals

continued to dominate portfolio performance during the



biotech sector in April and May 2022, driven by continued

investor concerns about rising interest rates. 

Fed) to combat



. 

for emerging biotech, which had reached 20-year lows,

appeared to bottom out in May and June. In August, drug

pricing legislation in the U.S. was passed as part of the

”. While the bill allows

for limited drug price negotiation by Medicare starting in

2026, the provisions appear manageable for the industry

and passage of the bill cleared a longstanding political

overhang for the sector. By the end of September, the biotech

sector had begun staging a recovery from depressed levels.

large

capitalization (cap) 

and growing recession concerns appeared to draw generalist

inflows into the defensive pharmaceutical sector and large

cap biotech. Large cap biotech outperformance continued

in November, but small cap biotech began outperforming

in December, and January 2023. Unfortunately, interest



the U.S. announced a lower-than-expected unemployment

rate and higher-than-expected inflation, sending small cap

. In March, the unexpected failure of Silicon

) had a particularly negative impact on small

. Even though





 

outperform small cap biotech. This trading dynamic had a





 cap names and underweight

large cap names. The drawdown in March accounted for



. Encouragingly,



in April and May 2023, which we hope signals a more

sustainedrecovery.



premised on overweighting smaller cap emerging biotech

names for three reasons:

1) Emerging biotech was trading at 20-year valuation

lows, with almost 20% of the industry at the start of the





balance sheets). Small and mid cap biotech companies

 cap biotech

and the S&P 500 since early 2021 and a reversion in



2) We expected an increase in M&A activity due to the

compelling valuations of smaller biotech targets.

3) Emerging biotech, rather than large cap biotech,

was still contributing about two-thirds of the total

biopharmaceutical industry pipeline. Fundamental

innovation was strong.

All of these elements of our investment thesis remain intact.





crisis in March 2023 temporarily derailed that rerating. We

believe biotech companies have largely eliminated their direct





big to fail” (e.g. J.P.

their cash into alternate liquid securities. Most emerging



GEOFF HSU

JOSH GOLOMB

PORTFOLIO MANAGER’S

REVIEW

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

PORTFOLIO MANAGER’S REVIEW 











end. Fed comments following their recent May 2023 meeting

were widely interpreted as signaling that a pause in interest

. 

the macro factors that have weighed on the sector so heavily

over the past two years should soon abate, allowing the

sector to recover.







cap biotech. As shown in Figure 1 below,





overweight small caps and 33% underweight large caps

. 





small cap biotech underperformed large cap biotech by

about 27% during the review period. 

year showed a similar 30% underperformance of small caps

versus large caps, a trend that we had hoped would reverse

in the review period. Figure 2 (on page 11) shows that the



an extension of a longer trend of underperformance since 31

March 2021. We are surprised that the underperformance of

small caps has persisted for so long but remain convinced

that the segment is overdue arecovery.

Figure 1



2022. Updated as of 31 March 2023, performance calculated in USD.

Source: Bloomberg



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



  

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  

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





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

  





SMALL AND MID CAP BIOTECH UNDERPERFORMED LARGE CAP BIOTECH

During the Year Ended 31 March 2023

Market Cap Breakdown



Company Benchmark Difference

Large Cap (>$10bn) 29% 62% -33%

Mid Cap ($2-10bn) 14% 22% -8%

Small Cap (<$2bn) 57% 16% 41%

* Snapshot exposure as of 31 March 202

excluding private securities.

Market Cap Breakdown



Company Benchmark Difference

Large Cap (>$10bn) 37% 70% -33%

Mid Cap ($2-10bn) 14% 18% -4%

Small Cap (<$2bn) 53% 12% 41%



excluding private securities.



+5.5%



-22.2%



-19.2%

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

PORTFOLIO MANAGER’S REVIEW 

We believe large cap biotech outperformance is principally



investments during a time of macro volatility. Large



and have lower beta a measure of their sensitivity to

. At a

time when investors are focused on maintaining liquidity

in their portfolios, large cap names offer greater liquidity

than their small cap counterparts. Additionally, drug sales

are less economically sensitive than other sectors during





.

We would caution that investors may be temporarily





.



reallocate to other sectors of the economy. While large

cap biotech does have some defensive qualities during a

recession, recent analysis from Goldman Sachs shows that

small and mid cap biotech (as reflected by the SPDR S&P

Biotech ETF or XBI) have also outperformed the S&P 500

during the last four recessions.



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

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



  



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  



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  

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  

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  



  



SMALL AND MID CAP BIOTECH HAVE UNDERPERFORMED LARGE CAP BIOTECH SINCE 31 MARCH 2021

Figure 2

2021. Updated as of 31 March 2023, performance calculated in USD.

Source: Bloomberg

Market Cap Breakdown



Company Benchmark Difference

Large Cap (>$10bn) 37% 70% -33%

Mid Cap ($2-10bn) 14% 18% -4%

Small Cap (<$2bn) 53% 12% 41%







+0.6%



-36.8%



-43.7%

Market Cap Breakdown



Company Benchmark Difference

Large Cap (>$10bn) 26% 59% -33%

Mid Cap ($2-10bn) 22% 29% -7%

Small Cap (<$2bn) 51% 13% 38%

* Snapshot exposure as of 31 March 202

excluding private securities.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

MEDIAN EXCESS RETURN VS. S&P 500 DURING THE LAST FOUR RECESSIONS

We have noted in the past the increasing biotech innovation

. 

government made developing a domestic, innovative

biotech industry a priority in 2015, and we believe the

.

 (a provider of biopharmaceutical

development and data analytics services), about 15% of





increase from the 4% level in 2012. We have therefore

allocated a portion of the portfolio to investments in

9.





. 







Receipts (ADRs). Encouragingly,

most of those headwinds have now abated. In late 2022,



fully reopen. 





. 

softened its tone with regards to regulatory restrictions

on private businesses. 

Reserve is raising interest rates to slow down the economy,



in 2023. During the latter half of the review period, we saw



. 



levels now that the macro headwinds have abated. While





industries directly relevant to security and national defense

rather than healthcare. 





EMERGING BIOTECH VALUATIONS STILL AT

20-YEAR LOWS



really stems from the observation that absolute and relative

valuations in that segment remain at 20-year lows.

As we have noted in the past, one proxy commonly used

 cap biotech is the

XBI, an equal weighted index of biotech companies created

PORTFOLIO MANAGER’S REVIEW 



Figure 3

Source: Goldman Sachs. Assessing Recession Impact Across Subsectors, 20 July 2022

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

in 2006. About 50% of this index consists of small cap

names. If one plots the relative performance of the XBI

versus the S&P 500 (shown in Figure 4, below), one can

see that since inception, the XBI has outperformed the

S&P 500, indicating that emerging biotech has historically

been a sector offering better returns than the broader

. 

short periods when the XBI has underperformed the S&P

500, shown by the red circles. Typically, these drawdown

periods result in underperformance versus the S&P 500

of 30-45%. The most recent relative drawdown was 73%,



both an absolute and relative basis. Prior drawdowns have



the XBI versus the S&P 500, denoted by the green arrows

on the graph, which usually results in the biotech index

reclaiming prior outperformance highs. Encouragingly, a



place in the second half of 2022, only to be cut short by the

. 



recovery over the next several months.

PORTFOLIO MANAGER’S REVIEW 



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

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















































XBI VS. S&P 500 (SPX) SPREAD SINCE XBI INCEPTION

Drawdowns in spread followed by historically strong recoveries





below the net cash on their balance sheets. In other



listed enterprises when the value of their cash holdings

is excluded. As shown in  overleaf, we

estimate about 25% of the biotech universe, representing

approximately 120companies, is now trading at negative

enterprise values as of 31March 2023. The graphs show

how unprecedented these valuations are in historical

context. We have never seen valuations remotely

approaching these levels in over 20years, even in previous



.

Figure 4

Note: Drawdowns are calculated using daily closing prices, while chart is shown using monthly data for smoothing purposes. Updated as of 30 April 2023.

Source: JPM (Drawdowns and Recoveries)

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

PORTFOLIO MANAGER’S REVIEW 



















                      



























RATIO OF MARKET CAP TO NET CASH ON BALANCE SHEET (MEDIAN)

BIOTECH VALUATIONS AT 20-YEAR LOWS





















 

 

 

 

 

                       











 

 

 

 

 

                   

PERCENT OF BIOTECH COMPANIES TRADING NUMBER OF BIOTECH COMPANIES TRADING

BELOW NET CASH ON BALANCE SHEET BELOW NET CASH ON BALANCE SHEET

Figure 5

Source: Bloomberg

Figure 6

Source: Bloomberg

Figure 7



universe refreshes. Updated through 31 March 2023.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

The compelling absolute and relative valuations of

emerging biotech have led us to continue maintaining our

small cap biotech overweighting in the portfolio. While





the sector rerates to historical norms. Possible catalysts

to trigger such a revaluation include a possible pause in



some investors now anticipating interest rate cuts in the

second half of 2023. M&A activity and positive clinical

developments should also help aid a recovery.

CONTRIBUTORS AND DETRACTORS



Syndax Pharmaceuticals and Seagen were the leading

positive contributors to performance in the portfolio during

the year.

• Sarepta Therapeutics is a commercial biotechnology

company focused on rare neuromuscular diseases.



muscular dystrophy but is also developing a gene



rose on the increased investor expectation that the

company would be able to obtain accelerated approval

for its gene therapy in 2023.

• Verona Pharma is a biopharmaceutical company

focused on developing therapies for the treatment of



candidate, ensifentrine, combines bronchodilator

and anti-inflammatory activities in one compound

for the treatment of chronic obstructive pulmonary



on the announcement of a positive Phase 3 trial

for ensifentrine in , showing the drug yielded

improvements in lung function, symptoms, and quality

of life. 

on the announcement of a second positive Phase 3





• Forma Therapeutics was a development stage

biopharmaceutical company focused on developing





by activating an enzyme that is thought to improve

anemia and red blood cell health, thereby reducing the

. In

PORTFOLIO MANAGER’S REVIEW 

PRINCIPAL CONTRIBUTORS TO AND DETRACTORS FROM NET ASSET VALUE PERFORMANCE

Top Five Contributors £’000

Contribution

per share

(pence)*

Sarepta Therapeutics

9,607 23.8

 Pharma 8,916 22.1

Forma Therapeutics 7,406 18.4

Syndax Pharmaceuticals 6,276 15.6

Seagen 5,783 14.4

37,988 94.3

Top Five Detractors

YS Biopharma

(11,596) (28.8)

 (9,729) (24.1)

Jounce Therapeutics

(7,748) (19.2)

Mirati Therapeutics (7,628) (18.9)

Kezar Life Sciences

(7,120) (17.7)

(43,821) (108.7)

* based on 40,287,724 shares being the weighted average number of shares in issue during the year ended 31 March 2023.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

PORTFOLIO MANAGER’S REVIEW 



acquiring Forma for $1.1 billion in cash, representing a



• Seagen is a pioneer in antibody-drug conjugate 

technology

treatment of cancer. 



company for $43 billion.

• Syndax Pharmaceuticals is an emerging biotechnology

company with two drugs in pivotal trials: revumenib for

axatilimab for chronic graft versus host



data readouts for both of those programs in 2023.



Therapeutics, and Kezar Life Sciences were the principal

detractors for the year.

• YS Biopharma



vaccine adjuvant that could have applications for



rabies, and hepatitis B. The company went public in the

U.S. in March via a special purpose acquisition company

() merger but subsequently saw a substantial



trading dynamics rather than fundamentals. Given that

the company generates over $100 million of revenues,



recover once the fundamentals are properly recognized

by investors.

• GH Research is a biopharmaceutical company focused

on the treatment of psychiatric and neurological

disorders. The company is developing a proprietary



patients with treatment-resistant depression (TRD),

now in Phase 2 clinical trials. Shares declined during the



near-term catalysts.

• Jounce Therapeutics is a clinical stage biotech

company focused on developing targeted immuno-

oncology therapies. Shares of Jounce underperformed

after disclosing its drug vopratelimab failed in a Phase

2 trial in lung cancer. Its second asset JTX-8064 also



tumor types in a Phase 1/2 proof of concept trial. The





































































                                      



FDA NEW MOLECULAR ENTITY APPROVALS

Figure 8

Source: U.S. Food and Drug Administration

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

PORTFOLIO MANAGER’S REVIEW 

• Mirati Therapeutics is a biotechnology company

developing novel small molecule drugs to treat cancer.

Its lead product, adagrasib, is a precision oncology



mutation. Shares fell in December 2022 following

the presentation of disappointing clinical trial data

suggesting adagrasib might not be superior to



drug may still be used in later-stage lung cancer and

colorectal cancer.

• Kezar Life Sciences is an emerging biotech



immunoproteasome inhibitor, for the treatment of

lupus nephritis. The drug has shown promising results

in a Phase 2 trial for lupus nephritis. 

declined in March 2023 when the company announced



for zetomipzomib.

REGULATORY CLIMATE CONTINUES TO BE

CONSTRUCTIVE

We continue to believe that the U.S. Food and Drug

Administration (the FDA), under the leadership of



the approval of new drugs. 

FDA approved 37 new drugs, which is lower than recent

years. We believe this reflects the residual impact of



in manufacturing inspections. It could also reflect normal

year to year variability in drug approval timing. Notably, the

agency received a similar number of new drug applications

in 2022 as the past few years, reflecting continued strong

innovation in the industry. We suspect many of those

applications will be approved in 2023.

Importantly, we do not believe the reduced number of

approvals in 2022 means the FDA has become less

constructive on approving drugs. 

65% of drug approvals in 2022 used an expedited means



Designation, Priority Review, or Accelerated Approval. 

recent examples of FDA flexibility include the following:

• 

despite the company stopping both of its pivotal trials

for futility and a negative FDA advisory committee vote;

• 

class treatment for geographic atrophy, despite one of

two pivotal trials failing to meet its primary endpoint;

• 



about the statistical rigor of the primary endpoint of

their pivotal trial; and

• 

sclerosis, despite its sole pivotal trial missing the

primary endpoint.

The FDA has continued to demonstrate flexibility on

approval requirements when drugs are submitted to the

agency that address an unmet medical need.

DRUG PRICING REFORM CLEARS

LONGSTANDING POLITICAL OVERHANG

For many years, the prospect of drug price controls in

the U.S. served as an overhang on the biopharmaceutical

sector. 

would criticize the pharmaceutical industry in their election

campaigns and vow to lower pharmaceutical prices via

government legislation. Whenever the prospect of drug

pricing reform was in the news, pharmaceutical and biotech





in passing some drug pricing provisions as part of the

”, which President Biden signed into

law in August 2022. The new law includes three elements of

drug pricing reform:

1) 

costs that seniors pay for prescription drugs (a positive

for the industry);

2) an inflation cap on annual drug price increases; and

3) the ability for the federal government to negotiate

Medicare drug prices for a limited number of drugs

starting in 2026. Biologic drugs will enjoy 13 years of



price negotiation while small molecule drugs will enjoy

nine years of exclusivity.



the near term, though in the long run it may incentivize

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

companies to pursue biologic drugs rather than small





further adverse drug pricing legislation for the next several



. The removal of

this persistent political overhang should help the biotech

sector recover.

IPO AND CROSSOVER ACTIVITY SLOWS DOWN,

BUT FINANCING ENVIRONMENT REMAINS

STRONG FOR GOOD COMPANIES

s

activity slowed considerably during the review period as

valuations contracted in the sector. 



. The only private position that went public



company which listed on the NASDAQ in March via a

merger.

directly held

.





. Given



. As the



crossover investing as opportunities arise, being mindful of



We would emphasize that,



biotech companies remains very strong. 

strong fundamentals have had no problems raising capital

from equity investors. 



capital, but this can present an opportunity for us to invest

in these companies at a compelling price.

MERGERS AND ACQUISITIONS (M&A) ACTIVITY ACCELERATING

Biotech M&A has been a historical driver of returns in the sector. Emerging biotech companies that show successful

proof-of-concept for their lead drug are usually acquired at some point. We had predicted an acceleration in biotech M&A

activity given the depressed valuations of potential biotech targets with the recent drawdown. 

of announced acquisitions of public biotech companies shown in Figure 9 below, the number of transactions did appear

. 

quarter of 2023 show a run-rate of M&A activity that appears to be continuing to increase.

ANNOUNCED ACQUISITIONS OF PUBLIC BIOTECH COMPANIES SHOW SIGNS OF ACCELERATION



Figure 9

*Q2 2023 column only represents the month of April 2023.

Source: FactSet

PORTFOLIO MANAGER’S REVIEW 

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

PORTFOLIO MANAGER’S REVIEW 

BILLIONS OF DOLLARS OF SALES AT RISK FROM BIG PHARMA BLOCKBUSTER DRUGS LOSING EXCLUSIVITY IN

SECOND HALF OF THE DECADE

Figure 10

Source: 

Source: S&P Global (table)



   

   

Bristol Myers Squibb* Eliquis 2026 16.8

Abbvie Imbruvica 2027 9.8

Johnson & Johnson Stelara 2023 9.1

Bristol Myers   

   

   



companies:

 ;

 ;

 ;

 ;

 ; and

• 

end).



. 





THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

As seen in Figure 11 above, innovation in the

biopharmaceutical sector remains strong, with the

global drug pipeline continuing to grow to record levels.

We attribute the flattening of the number of drugs in

development over the past two years to delays in clinical







action different from those of existing therapies. Below



approvals originated by biotech companies in 2022 (some

of the biotech companies have been acquired by larger

pharmaceutical companies):

• 

hypertrophic cardiomyopathy;

• 

for ovarian cancer;

• 

agglutinin disease;

• 

uveal melanoma;

• 

castration-resistant prostate cancer;

• 

;

• 

infection;

• ;

• 

topical treatment of plaque psoriasis; and

• 

.

The number of next generation biotherapeutics entering



cell therapy and gene therapy continues to rise as shown in

Figure 12 on page 21.

PORTFOLIO MANAGER’S REVIEW 



RECORD INNOVATION CONTINUES TO DRIVE INDUSTRY VALUE

NUMBER OF PIPELINE PRODUCTS PHASE I TO REGULATORY SUBMISSION BY THERAPEUTIC DRUG CLASS,

2012-2022

Figure 11

Source: 

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT



NEXT-GENERATION BIOTHERAPEUTICS PHASE I TO REGULATORY SUBMISSION PIPELINE BY MECHANISM,

2012-2022

PORTFOLIO MANAGER’S REVIEW 

Figure 12

The  has exposure across a wide swath of these

new technologies, as shown in Figure 13 overleaf.



period include:

• 

disease developed by Biogen and Eisai, became the



conclusively positive Phase 3 trial;

• Madrigal Pharmaceuticals announced positive Phase

3 results of its drug for non-alcoholic steatohepatitis

;

• 

novel 24-valent pneumococcal vaccine;

• Moderna announced positive Phase 2 results of its

mRNA cancer vaccine in melanoma;

• Alnylam Pharmaceuticals announced positive Phase 3

results of its RNA interference drug in amyloidosis with

cardiomyopathy;

• Prometheus Biosciences announced positive Phase



ulcerative colitis;

• Iveric Bio announced positive Phase 3 results for its

drug for geographic atrophy; and

• 

its drug for chronic obstructive pulmonary disease.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

Importantly, all of the clinical events listed above resulted







through clinical events.

The expected sales potential for many of these innovative

drugs is also substantial. The top 15 new product

opportunities in biotechnology today could create over

$60 billion in cumulative sales by the next decade (source:

Jefferies).





include the following:

• Gene therapy 



approved this year in the U.S. 

potential for these one-time treatments are both in

excess of $1 billion.

• Immunology & Inflammation

mechanisms of action have been validated recently in



colitis and psoriasis. 

strategic interest by larger pharmaceutical companies,

so we expect continued M&A activity in this area.

• Oncology





far the leading therapeutic area of research focus for

the industry. Multiple different approaches, including

antibody-drug conjugates, radiopharmaceuticals,

mRNA vaccines, and cell therapy, have shown positive

proof of concept in this area.

• Kidney disease



IgA nephropathy.

OUTLOOK AND ORBIMED UPDATE



given that small and mid cap biotech failed to recover as

we had expected. The recent drawdown in biotech has

been unprecedented in both length and severity. Macro

factors outside of company fundamentals continue to



challenging for fundamental-based investors such as us. We





































INNOVATION WELL REFLECTED IN BIOG

PORTFOLIO MANAGER’S REVIEW 

Figure 13

% of 

Source: 

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

PORTFOLIO MANAGER’S REVIEW 

more stable, valuations will recover to historical norms and



in share prices. 

activity and the Federal Reserve signaling a potential pause

. 

strategic positioning remains unchanged, with an emphasis

on smaller, emerging biotech names that should have

the most upside potential when a broad sector recovery

materializes. Gearing will remain in the 5-10%range.



investment performance. We are happy to announce the



co-portfolio manager of The Biotech Growth Trust. Josh

has close to 20 years of experience investing in biotech

and brings substantial expertise to our research effort.

Including Josh and Geoff, we now have seven analysts on

the biotech research team, supplemented by one specialty

pharma analyst, two tools/diagnostics analysts, and four

. 

subsided, we have resumed in-person travel to medical

and investor conferences. We have also recently opened



capital and structured debt businesses. While our public

equity investing efforts will continue to be headquartered in



further expand our organization in the UK and other parts of

Europe in the future.

In conclusion, while we are disappointed with the





will occur soon and do not see much further downside

from current levels. We have never seen such a large

disconnect between valuations and industry fundamentals

and continue to believe this is an excellent entry point for



innovative area of healthcare.

Geoff Hsu & Josh Golomb



14 June 2023

Figure 14

Source: Jefferies



15 NOVEL BIOTECH-SOURCED LAUNCHES WITH >$60 BILLION IN POTENTIAL CUMULATIVE REVENUES

FibroGen

Biomarin



Axsome



Ascendis Pharma



Ints

Apellis

Prometheus

Intellia

Madrigal

Karuna

Argenx

Alnylam

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

PORTFOLIO MANAGER’S REVIEW 

PERFORMANCE ATTRIBUTION FOR THE YEAR ENDED 31 MARCH 2023

Contribution to total returns % %

 5.4

 (15.0)

Portfolio total return (9.6)

 (0.8)

 (1.1)

 0.5

 (1.4)

Return on net assets (11.0)



ORBIMED’S APPROACH TO ESG



Responsible Investing Policy in its approach to ESG. The





unmet medical needs, across biopharmaceuticals, medical

devices, diagnostics, and healthcare services sectors,

globally.





succeed in building long-term shareholder value. The



investment process, with the objective of maximizing

investment returns. Investment decisions are based on



including ESG information. The Portfolio Manager has







potential investments and business sectors that may

objectively lead to negative impacts on public health or

well-being. The Portfolio Manager considers healthcare



Accounting Standards Board (SASB) to determine material

ESG factors as part of its investment research. Social

factors such as affordability, pricing, access, and safety



pharmaceutical, biotechnology, and medical devices sub-

sectors, followed by governance factors. Environmental





are highly regulated, globally. Environmental regulation,

along with quality-related regulation is well-established





and regulations as one of the factors in its investment

evaluation. Depending on the investment, all or a subset of





MONITORING AND ENGAGEMENT



from third-party service providers. To supplement the



also conducts proprietary analysis on ESG performance.

The scores from the third-party service providers are



intelligence platform via programming interface, for regular

monitoring.

The Portfolio Manager also generally engages on a regular

basis with its portfolio companies through meetings with

management, proxy voting, and in some cases, through

board representation.









engagement in the healthcare sector. As part of these





leading practices among investors, companies, and other

relevant experts on ESG in the healthcare sector. Some

examples of engagement include:

• Engaged with large capitalization pharmaceutical

companies on reporting, environmental sustainability,

access, product pricing, supplier engagement and



led ESG road shows;

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

PORTFOLIO MANAGER’S REVIEW 

• Engaged with large capitalization biotechnology

company on leading ESG practices and provided





• Participated in an ESG conference where a mid cap

biotechnology company disclosed its ESG Governance,



clinical trials, diversity and talent-building initiatives,

and other community initiatives; and

• As part of the ESG Industry Investor connect,



a large capitalization medical devices company and

pharmaceutical company alongside ten other investors

on ESG. Topics discussed include drugs and product

safety, litigation, and access to medicine.

the Goldman Sachs





2022, alongside several healthcare companies and

investors, to further dissemination and discussion on

leading ESG practices in the healthcare sector.

Between 1 April 2022 and 31 March 2023, a total of 608





shareholder proposals.

There were no management or shareholder proposals

on any material ESG topics, as listed in the Sustainability

Accounting Standards Board guidance for the

Biotechnology and Pharmaceuticals sub-sector.

The Portfolio Manager provides an annual update on ESG



CLIMATE CHANGE

As per the guidance from SASB, climate change is not

a material ESG consideration for the biotechnology and

pharmaceutical, medical equipment and supplies, and



noted as a material ESG concern for the healthcare delivery



management for the relevant sectors in its overall ESG

monitoring.

REGULATORY UPDATE ON ESG



a

Sustainability Disclosure Requirements (SDR). The

proposed SDR is focused on asset managers and their UK-

based fund products and portfolio management services.









in June 2023, are now expected to be published in Q3 2023.







effect a year later, and the disclosure rules come into force

24 months thereafter.











the publication of its 2023 examination priorities, which

include a focus on ESG-related advisory services and fund

offerings, to evaluate labelling and practices with respect to

stated policies and processes, in the United States.



www.biotechgt.com.

Proposed by

Total number

of proposals

Voted

for

Voted

against

Votes

abstained

Votes

withheld

Number of

votes against

management

proposed

response

Management

602 504 96

1 1 94

Shareholder

6 2 4

0 0 2

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

BUSINESS REVIEW

The Strategic Report on pages 1 to 37

contains a review of the Company’s

business model and strategy, an

analysis of its performance during

the financial year and its future

developments, as well as details of the

principal risks and challenges it faces.

Its purpose is to inform shareholders in the Company and

help them to assess how the Directors have performed their

duty to promote the success of the Company. The Strategic

Report contains certain forward-looking statements. These

statements are made by the Directors in good faith based on

the information available to them up to the date of this report.

Such statements should be treated with caution due to the

inherent uncertainties, including both economic and business

risk factors, underlying such forward-looking information.

BUSINESS MODEL

The Biotech Growth Trust PLC is an externally managed

investment trust and its shares are listed on the premium



the London Stock Exchange.

The purpose of the Company is to achieve long-term growth

in its shareholders' wealth by providing a vehicle for investors

to gain exposure to a portfolio of worldwide biotechnology

companies, through a single investment.

The Company’s strategy is to create value for shareholders

by addressing its investment objective.

As an externally managed investment trust, all of the

Company's day-to-day management and administrative

functions are outsourced to service providers. As a result, the

Company has no executive directors, employees or internal

operations.

The Company employs Frostrow Capital LLP (Frostrow) as

its Alternative Investment Fund Manager (AIFM), OrbiMed

Capital LLC (OrbiMed) as its Portfolio Manager, J.P. Morgan

Europe Limited as its Depositary and J.P. Morgan Securities

LLC as its Custodian and Prime Broker. Further details

about their appointments can be found in the Report of the

Directors on pages 48 and 49.

The Board is responsible for all aspects of the Company’s

affairs, including setting the parameters for and monitoring

the investment strategy as well as the review of investment

performance and policy.

The Company is an investment company within the meaning

of Section 833 of the Companies Act 2006 and has been

approved by HM Revenue & Customs as an investment trust

(for the purposes of Section 1158 of the Corporation Tax Act

2010). As a result, the Company is not liable for taxation on

capital gains. The Directors have no reason to believe that

approval will not continue to be retained. The Company is not

a close company for taxation purposes.

INVESTMENT OBJECTIVE AND POLICY

The Company seeks capital appreciation through investment

in the worldwide biotechnology industry.

In order to achieve its investment objective, the Company



securities in biotechnology companies on a worldwide basis.

In connection with the investment policy, the following

guidelines apply:

• The Company will not invest more than 10%, in

aggregate, of the value of its gross assets in other

closed ended investment companies (including

investment trusts) listed on the London Stock Exchange,

except where the investment companies themselves

have stated investment policies to invest no more

than 15% of their gross assets in other closed ended

investment companies (including investment trusts)

listed on the London Stock Exchange.

• The Company will not invest more than 15%, in

aggregate, of the value of its gross assets in other closed

ended investment companies (including investment

trusts) listed on the London Stock Exchange.

• The Company will not invest more than 15% of the value

of its gross assets in any one individual stock at the

time of acquisition.

• The Company will not invest more than 10% of the value

of its gross assets in unquoted investments at the time

of acquisition. This limit includes any investment in

private equity funds managed by the Portfolio Manager



THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

• The Company may invest or commit for investment

a maximum of U.S.$15 million, after the deduction of

proceeds of disposal and other returns of capital, in

private equity funds managed by the Portfolio Manager,



• The Company’s borrowing policy is that borrowing

will not exceed 20% of the Company’s net assets. The

Company’s borrowing requirements are met through

the utilisation of a loan facility, repayable on demand

and provided by J.P. Morgan Securities LLC. This facility

can be drawn by the Portfolio Manager overseen by



• The Company may be unable to invest directly in certain

countries. In these circumstances, the Company may

gain exposure to companies in such countries by

investing indirectly through swaps. Where the Company

invests in swaps, exposure to underlying assets will not

exceed 5% of the gross assets of the Company at the

time of entering into the contract.

In accordance with the requirements of the Financial Conduct

Authority, any material change to the investment policy will

only be made with the approval of shareholders by ordinary

resolution.

PROPOSED CHANGES TO THE INVESTMENT

POLICY

As explained in the Chairman’s Statement on page 3, the Board

is proposing some changes to the investment policy in order to



portfolio management. The proposed changes will:

• Enable derivative instruments (other than equity swaps)

to be used to mitigate risk and/or enhance return

subject to an aggregate net exposure of 5% of the value

of the Company’s gross assets measured at the time of

the relevant transaction; and

• Remove the current limit on equity swaps but impose

a limit on aggregate net counterparty exposure,

through a combination of derivatives and equity swap

transactions, of 12% of the value of the gross assets of

the Company at the time of the transaction.

Accordingly, an ordinary resolution to approve the amended

investment policy is included in the Notice of AGM, beginning

on page 101, and a blacklined statement of the investment

policy showing the proposed changes is set out on page 106.

The proposed amendments have been approved in principle

by the Financial Conduct Authority in accordance with the

requirements of the Listing Rules.

INVESTMENT STRATEGY

The implementation of the Investment Objective has been

delegated to OrbiMed by Frostrow (as AIFM) under the Board’s

and Frostrow’s supervision and guidance.

Details of OrbiMed’s investment strategy and approach are set

out in the Portfolio Manager’s Review on pages 9 to 25. While

performance is measured against the Benchmark, the Board

encourages OrbiMed to manage the portfolio without regard to

the Benchmark and its make-up.

While the Board’s strategy is to allow flexibility in managing the

investments, in order to manage investment risk it has imposed

various investment, gearing and derivative guidelines and limits,

within which Frostrow and OrbiMed are required to manage the

investments, as set out in the Investment Policy.

PERFORMANCE MEASUREMENT

The Board measures OrbiMed's performance against the

NASDAQ Biotechnology Index (sterling adjusted). The Board

also monitors the Company's performance against its peer

group.

DIVIDEND POLICY

The Company invests with the objective of achieving capital

growth and it is expected that dividends, if any, are likely to

be small. The Board intends only to pay dividends on the

Company’s shares to the extent required in order to maintain

the Company’s investment trust status.

No dividends were paid or declared during the year (2022:

None).

CONTINUATION OF THE COMPANY

An opportunity to vote on the continuation of the Company



continuation vote will be proposed at the Annual General

Meeting to be held in 2025.

COMPANY PROMOTION

The Company has appointed Frostrow to provide marketing

and investor relations services, in the belief that a well-

marketed investment company is more likely to grow over

time, have a more diverse, stable list of shareholders and its

shares will trade closer to the net asset value per share over

BUSINESS REVIEW CONTINUED

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

the long run. Frostrow actively promotes the Company in

the following ways:

Engaging regularly with institutional investors, discretionary

wealth managers and a range of execution-only platforms:

Frostrow regularly meets with institutional investors,

discretionary wealth managers and execution-only

platform providers to discuss the Company’s strategy and

to understand any issues and concerns, covering both

investment and corporate governance matters;

Making Company information more accessible: Frostrow



groups within the investment community, holding periodic

investment seminars, commissioning and overseeing PR

output and managing the Company’s website and wider

digital offering, including Portfolio Manager videos and

social media;

Disseminating key Company information: Frostrow

performs the Investor Relations function on behalf of the

Company and manages the investor database. Frostrow

produces all key corporate documents, distributes monthly

factsheets, annual and half yearly reports and updates from

OrbiMed on the portfolio and market developments; and

Monitoring market activity, acting as a link between the

Company, shareholders and other stakeholders: Frostrow

maintains regular contact with sector broker analysts and

other research and data providers, and conducts periodic

investor perception surveys, liaising with the Board to

provide up-to-date and accurate information on the latest

shareholder and market developments.

KEY PERFORMANCE INDICATORS (KPIs)

The Board assesses the Company’s performance in

meeting its objective against the following key performance

indicators:

• net asset value total return;

• share price total return;

• share price discount to net asset value per share; and

• ongoing charges.

Information on the Company’s performance is provided

in the Chairman’s Statement and the Portfolio Manager’s

Review and a record of these measures is shown on pages 1,

5 and 6. The KPIs have not changed from the prior year:

NET ASSET VALUE PER SHARE TOTAL RETURN^

The Directors regard the Company’s net asset value per

share total return as being the overall measure of value

generated by the Portfolio Manager over the long term.

The Board considers the principal comparator to be the

NASDAQ Biotechnology Index (sterling adjusted) (the

Benchmark). OrbiMed’s investment style is such that

performance is likely to deviate from that of the Benchmark.

During the year under review, the Company’s net asset

value per total share return was -11.0%, underperforming

the Benchmark by 16.4% (2022: -33.8%, underperforming

the Benchmark by 26.4%). Since OrbiMed’s date of

appointment (19 May 2005) to 31 March 2023, the

Company’s net asset value per share total return is 756.0%

compared with 795.8% for the Benchmark. Please refer

to the Chairman’s Statement (beginning on page 2) and

the Portfolio Manager’s Review (beginning on page 9) for

further information.

SHARE PRICE TOTAL RETURN^

The Directors also regard the Company’s share price total

return to be a key indicator of performance. This reflects the

Company's share price growth which the Board recognises

is important to investors.

During the year under review the Company’s share price

total return was -12.8% (2022: -37.0%). Since OrbiMed’s

date of appointment (19 May 2005) to 31 March 2023, the

Company’s share price total return is 730.8% compared

with Benchmark performance of 795.8%. Please refer to

the Chairman’s Statement beginning on page 2 for further

information.

SHARE PRICE (DISCOUNT)/PREMIUM TO NET

ASSET VALUE PER SHARE^

The Board regularly reviews the level of the discount/

premium of the Company’s share price to the net asset

value per share and considers ways in which share price

performance may be enhanced, including the effectiveness

of marketing, share issuance and buybacks, where

appropriate. The Board has a discount control mechanism

in place, the aim of which is to prevent the level of the share

price discount to the net asset value per share exceeding

6%. Shareholders should note, however, that it remains

possible for the discount to be greater than 6% on any one

day due to sector volatility and the fact that the share price

BUSINESS REVIEW CONTINUED

^ Alternative Performance Measure (See Glossary beginning on page 96).

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

BUSINESS REVIEW CONTINUED

continues to be influenced by the overall supply of and

demand for the Company’s shares in the secondary market.

Any decision to repurchase shares is at the discretion of the

Board. 2,421,263 shares were repurchased by the Company

during the year (2022: 576,087).

When the Company's shares trade at a premium to the

net asset value per share, new shares can be issued at a

premium to the net asset value per share.



in such conditions are as follows:

 

manage the premium at which the Company’s shares

trade to net asset value per share;

• to provide a small enhancement to the net asset value

per share of existing shares through new share issuance

at a premium to the estimated net asset value per share;

• to grow the Company, thereby spreading operating

costs over a larger capital base, which should reduce

the ongoing charges ratio; and

• to improve liquidity in the market for the Company’s

shares.

As the Company's shares traded at a discount to the net

asset value per share throughout the year, no new shares



The volatility of the net asset value per share in an asset

class such as biotechnology is a factor over which the

Board has no control. The making and timing of any share

buy-backs or share issuance is at the absolute discretion of

the Board. Please see the Chairman’s Statement beginning

on page 2 for further information.

ONGOING CHARGES^

Ongoing charges represent the costs that the Company can

reasonably expect to pay from one year to the next, under

normal conditions. The Board continues to be conscious

of expenses and seeks to maintain a sensible balance

between high quality service and costs. The Board therefore

considers the ongoing charges ratio to be a KPI and reviews



1.1%

(2022: 1.1%).

^ Alternative Performance Measure (see Glossary beginning on page 96).

RISK MANAGEMENT

The Board is responsible for managing the risks faced by

the Company. Through delegation to the Audit Committee,

the Board has established procedures to manage risk,

to review the Company’s internal control framework and

to establish the level and nature of the principal risks the

Company is prepared to accept in order to achieve its

long-term strategic objective. At least twice during a year

the Audit Committee carries out a robust assessment of

the principal and emerging risks with the assistance of



has been established to identify and assess risks, their

likelihood and the possible severity of impact. Further

information is provided in the Audit Committee Report

beginning on page 55. These principal risks and the ways

they are managed or mitigated are set out on the following

pages.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

BUSINESS REVIEW CONTINUED

PRINCIPAL RISKS AND UNCERTAINTIES MANAGEMENT/MITIGATION

MARKET RISK

The Company’s portfolio is exposed to fluctuations in

market prices (changes in broad market measures,

individual security prices and foreign exchange rates)

in the biotechnology sector and the regions in which

it invests, which may result in a reduction in assets

due to market falls and higher volatility.

The biotechnology sector has historically been

more volatile than other equity sectors, reflecting

factors inherent in biotech companies, including

emerging technologies, uncertainty of drug

approval outcomes, regulatory and pricing policy.

More generally, geopolitical and economic

uncertainties have affected markets globally and

are likely to continue to do so. These include the

continued impact of the war in Ukraine and the

effect of sanctions against Russia, resulting in

elevated energy prices. More broadly, inflation may

prove more persistent than had been hoped. This

has driven interest rates higher, increasing the cost

of capital for companies in our investment universe

and leading to concerns about the resilience of

elements of the US banking system, in turn reducing

investors’ risk appetites. Globally, political, military

and commercial tensions between the US/West

and China have put the pace of global economic

growth at risk.

The Portfolio Manager has responsibility for selecting investments in

accordance with the Company’s investment objective and policy and seeks

to ensure that investment in individual stocks falls within acceptable risk

levels. Compliance with the limits and guidelines contained in the Company’s

investment policy is monitored daily by Frostrow and OrbiMed and reported

monthly to the Board.



the risks associated with individual stocks and markets. OrbiMed report at

each Board meeting on the Company’s performance and the macro factors

affecting it.

The Portfolio Manager spreads investment risk over a wide portfolio of

investments. At the year end the Company’s portfolio comprised investments

in 54

As part of its review of the going concern and long-term viability of the

Company, the Board also considers the sensitivity of the portfolio to changes in

market prices and foreign exchange rates (see note 14 beginning on page 87)

and the ability of the Company to liquidate its portfolio if the need arose. Further

details are included in the Going Concern and Viability Statements beginning on

page 34.

PORTFOLIO PERFORMANCE

Investment performance may not achieve

the Investment Objective and the value of the

investments held in the portfolio may fall materially

out of line with the sector.

The Portfolio Manager’s approach is expected

to lead to performance that will deviate from

comparators, including both market indices and

other investment companies investing in the

biotechnology sector.

The Board reviews regularly investment performance against the Benchmark

and against the Company’s peer group. The Board also receives regular reports

that analyse performance against other relevant indices. The Portfolio Manager



rationale for the make-up of the portfolio. The Portfolio Manager discusses

current and potential investment holdings with the Board on a regular basis.

DecreasedNo change Increased

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

BUSINESS REVIEW CONTINUED

PRINCIPAL RISKS AND UNCERTAINTIES MANAGEMENT/MITIGATION

SHARE PRICE PERFORMANCE

The risk that the Company’s share price is not

representative of its underlying net assets.

To manage this risk, the Board:

• regularly reviews the level of the share price discount/premium to the net asset

value per share and considers ways in which share price performance may

be enhanced, including the effectiveness of marketing and investor relations

services, new share issuance and share buybacks, as appropriate;

• has implemented a discount management policy, buying back the Company’s

shares when the level of the share price discount to the net asset value per

share exceeds 6% (in normal market conditions). Further information on this

policy is set out on pages 28 to 29.

• may issue shares at a premium to the net asset value per share to help prevent

a share price premium reaching too high a level;

• reviews an analysis of the shareholder register at each Board meeting and is

kept informed of shareholder sentiment; and

• regularly discusses the Company’s future development and strategy with the

Portfolio Manager and the AIFM.

CYBER RISK

Cyber crime may lead to the disruption or failure

of systems covering dealing, trade processing,



operational functions.

The Board relies on controls in place at OrbiMed, Frostrow, J.P. Morgan, Link

and other third-party service providers.

The Audit Committee reviews the internal controls reports of the principal

service providers, as well as their data storage and information security

arrangements.

KEY PERSON RISK

The risk that the individual(s) responsible for

managing the Company’s portfolio may leave

their employment or may be prevented from

undertaking their duties.

The Board manages this risk by:

• appointing OrbiMed, who in turn have appointed Geoff Hsu and, in the

course of the year, Josh Golomb to manage the Company’s portfolio. Mr

Hsu and Mr Golomb are supported by a team of researchers and analysts

dedicated to the biotechnology sector;

• receiving reports from OrbiMed at each Board meeting, such reports include



• 

participation of the wider OrbiMed team in investor updates; and

• delegating to the Management Engagement Committee, the responsibility

to perform an annual review of the service received from OrbiMed, including,

inter alia, the team supporting the lead managers and their succession plans.

VALUATION RISK

Pursuant to the Investment Policy, the Company

may invest up to 10% of its gross assets in

unquoted investments at the time of acquisition.

The valuation of unquoted assets involves a

degree of subjectivity and there is a risk that

proceeds received on the disposal of unquoted



the value at which the investment is held in the

Company’s portfolio.

Unquoted investments comprised 5.7% of the Company's portfolio at the

year end. The Company’s directly held unquoted investments are valued by

an independent, third-party valuation agent. The Board has established a

Valuation Committee to review the valuations of the unquoted investments

and the methodologies used in the valuations. The valuations are

recommended to the Committee by Frostrow, the Company's AIFM, following

review by its own valuations committee. The Valuation Committee makes

recommendations to the Board, as appropriate. Further information can be

found in the Audit Committee Report beginning on page 55 and note 1 to the

77.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

BUSINESS REVIEW CONTINUED

PRINCIPAL RISKS AND UNCERTAINTIES MANAGEMENT/MITIGATION

CLIMATE CHANGE

Climate change events, as well as the introduction

of new regulations designed to combat climate

change, could have an impact on portfolio

companies and their operations, as well as on the

Company’s service providers, potentially affecting

their operating models, supply chains, physical

locations and energy costs.

Although the effects of climate change have yet to be fully determined, the

Board and the Portfolio Manager keep the subject under review.

The Board is conscious that climate change poses a general risk to the

investment environment and, through discussions with the Portfolio Manager,

has noted that the biotechnology industry is not a major contributor to

greenhouse gas emissions. For this reason, the Portfolio Manager does not

consider climate change to be a material ESG consideration when engaging

with investee companies. However energy management is noted as a material

concern in the wider healthcare and pharmaceutical sectors, and this forms

part of OrbiMed’s ESG monitoring. Please refer to pages 24 and 25 for further

information.

COUNTERPARTY RISK

The Company is exposed to credit risk arising

from the use of counterparties. If a counterparty

were to fail, the Company could be adversely

affected through either a delay in settlement or a

loss of assets.



Morgan Securities LLC (the Company’s Custodian and Prime Broker) which is

responsible for the safekeeping of the Company’s assets and provides the loan

facility to the Company. As part of the arrangements with J.P. Morgan Securities

LLC (J.P. Morgan) they may take assets as collateral up to 140% of the value

of the loan drawn down. The assets taken as collateral by J.P. Morgan may be

used, loaned, sold, rehypothecated* or transferred. The level of the Company's

gearing is at the discretion of the AIFM and the Board and the loan can be repaid

at any time, at which point the assets taken as collateral will be released back to

the Company. Any of the Company’s assets taken as collateral are not covered

by the custody arrangements provided by J.P. Morgan.

J.P. Morgan is a registered broker-dealer and is accordingly subject to limits on

rehypothecation* imposed by the U.S. Securities and Exchange Commission

(SEC). In the event of J.P. Morgan’s insolvency, the Company may be unable to

recover in full assets held by it as Custodian or held as collateral.



limitations on the use of gearing and reliance on the SEC's robust regulatory

regime. In addition, the Board monitors the credit rating of J.P. Morgan.

J.P. Morgan is also subject to regular monitoring by J.P. Morgan Europe

Limited, the Depositary, and the Board receives regular reports from the

Depositary.

During the year the Company entered into swap transactions with Goldman

Sachs International.



beginning on page 87.

* See glossary beginning on page 96.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

BUSINESS REVIEW CONTINUED

EMERGING RISKS

The Company has carried out a robust assessment of the Company’s emerging risks and the procedures in place to identify



new, or is a familiar risk in a new or unfamiliar context or under new context conditions (re-emerging).

The Audit Committee reviews a risk map at its half-yearly meetings. Emerging risks are discussed in detail as part of this



practicable, mitigated.



1. Demographic trends in China and Europe, including the effects of an ageing workforce, may have an impact on global

markets.

2. Threats to research funding and the effects of increased costs in the biotech sector may affect the Company's investee

companies.

PRINCIPAL RISKS AND UNCERTAINTIES MANAGEMENT/MITIGATION

OPERATIONAL DISRUPTION

As an externally managed investment trust,

the Company is reliant on the systems of its

service providers for dealing, trade processing,



If such systems were to fail or be disrupted

(including, for example, as a result of a

pandemic, war, network disruption or simply

poor performance/controls) this could prevent



position or lead to a failure to comply with

applicable laws, regulations and governance



To manage these risks, the Board (in some cases meeting as the Audit Committee):

• periodically meets representatives from the Company's key service providers to

gain a better understanding of their control environment, and the processes in

place to mitigate any disruptive events (including the

COVID

-19 pandemic);

• receives a monthly report from Frostrow, which includes, inter alia

of compliance with applicable laws and regulations;

• reviews the internal control reports and key policies (including disaster recovery

procedures and business continuity plans) of its service providers;

• maintains a risk matrix with details of risks to which the Company is exposed,

the approach to managing those risks, the key controls relied on and the

frequency of the controls operation;

• receives updates on pending changes to the regulatory and legal environment

and progress towards the Company’s compliance with such changes; and

• has considered the increased risk of cyber-attacks and received reports

and assurance from its service providers regarding the information security

controls in place.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

BUSINESS REVIEW CONTINUED

GOING CONCERN



going concern basis. The Directors consider this is the

appropriate basis as the Company has adequate resources

to continue in operational existence for at least the next

12 months from the date of approval of this report. The

Company’s portfolio, trading activity, cash balances,

revenue and expense forecasts, and the trends and factors

likely to affect the Company’s performance are reviewed

and discussed at each Board meeting. The Board has

considered a detailed assessment of the Company’s ability

to meet its liabilities as they fall due, including stress tests

which modelled the effects of substantial falls in portfolio

valuations and liquidity constraints on the Company’s



55.

Based on the information available to the Directors at the

date of this report, including the results of these stress

tests, the conclusions drawn in the Viability Statement

below, the Company’s current cash balances, and the

liquidity of the Company’s investments, the Directors



resources to continue in operation for at least the next



continue to adopt the going concern basis in preparing the



VIABILITY STATEMENT

In accordance with the UK Corporate Governance Code and

the Listing Rules, the Directors have carefully assessed the

Company’s position and prospects as well as the principal

risks and have formed a reasonable expectation that the

Company will be able to continue in operation and meet its





term nature and outlook adopted by the Portfolio Manager

when making investment decisions.

To make this assessment and in reaching this conclusion,

the Audit Committee has considered the Company’s



meet its liabilities as they fall due and, in particular, notes the

following:

• The portfolio is principally comprised of investments

traded on major international stock exchanges. Based

on recent market volumes

94.5

% of the current portfolio

could be liquidated within 30 trading days with

88.3

% in

seven days. There is no expectation that the nature of the

investments held within the portfolio will be materially

different in future.

• The Board has considered the viability of the Company

under various scenarios, including periods of acute stock

market and economic volatility, and concluded that it





portfolio of (mostly) listed and realisable assets. As



Board has considered other price risk (the sensitivity of

the value of shareholders' funds to changes in the fair

value of the Company's investments), foreign currency

sensitivity (the sensitivity to changes in key exchange

rates to which the portfolio is exposed) and interest rate

sensitivity (the sensitivity to changes in the interest rate

charged on the Company's loan facility).

• With an ongoing charges ratio of 1.1%, the expenses of

the Company are predictable and modest in comparison

with the assets and there are no capital commitments

foreseen which would alter that position.

• The Company has a short-term bank facility which can

be used to meet its liabilities. Details of the Company’s



statements.

• The Company has no employees. Consequently it does

not have redundancy or other employment related

liabilities or responsibilities.

The Audit Committee, as well as considering the potential impact

of the Company’s principal risks and various severe but plausible

downside scenarios, has made the following assumptions in

considering the Company’s longer-term viability:

• There will continue to be demand for investment trusts;

• The Portfolio Manager will continue to adopt a long-term

view when making investments, and anticipated holding



• The Company invests principally in the securities of listed

companies traded on international stock exchanges to

which investors will wish to continue to have exposure;

• Shareholders will vote for the continuation of the

Company at the Annual General Meeting to be held in

2025. 

years to vote for the continuation of the Company. At the

current time, the Directors believe they have a reasonable

expectation that the next vote will be passed.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

• The closed-ended nature of the Company means that,

unlike open-ended funds, it does not need to realise

investments when shareholders wish to sell their shares;

• The Company will continue to be able to fund share

buybacks when required. The Company bought back

2,421,263 ordinary shares in the year under review at a

total cost of £22.6 million and experienced no problem

with liquidity in doing so. It had shareholders’ funds in

excess of £330.2 million at the year end; and

• The long-term performance of the Company will continue

to be satisfactory.

ENVIRONMENTAL, SOCIAL, COMMUNITY AND

HUMAN RIGHTS MATTERS

As an externally managed investment trust, the Company

does not have any employees or maintain any premises,

nor does it undertake any manufacturing or other

physical operations itself. All its operational functions are

outsourced to third party service providers. Therefore, the

Company has no material, direct impact on the environment

or any particular community and, as a result, the Company

itself has no environmental, human rights, social or

community policies.

Under the Listing Rules, the Company is also exempt

from reporting against the Taskforce for Climate-Related

Financial Disclosures (TCFD) framework. However, the

Board recognises that climate change poses a general risk

to the investment environment and has discussed with the

Portfolio Manager the potential impact of climate change

risk on the Company's investments.

The Board believes that consideration of environmental,

social and governance (“ESG”) factors is important to

shareholders and other stakeholders, and has the potential

to protect and enhance investment returns. The Portfolio

Manager’s investment criteria ensure that ESG factors are

integrated into their investment process and best practice

in this area is encouraged by the Board. The Portfolio

Manager engages with the Company’s underlying investee

companies in relation to their corporate governance

practices and the development of their policies on social,

community and environmental matters. Further information

on OrbiMed’s responsible investing policy, including their

approach to the consideration of climate change in their

investment process, can be found on pages 24 and 25.

The Board is committed to carrying out the Company’s



approach to bribery, corruption, and tax evasion. As such,

policies and procedures are in place to prevent this. In

carrying out the Company’s activities, the Board aims to

conduct itself responsibly, ethically and fairly. The Board’s

expectations are that the Company’s principal service

providers have appropriate governance policies in place.

PERFORMANCE AND FUTURE DEVELOPMENTS

A review of the Company’s year, its performance and the

outlook for the Company can be found in the Chairman’s

Statement beginning on page 2 and in the Portfolio

Manager’s Review beginning on page 9.

The Company’s overall strategy remains unchanged.

BUSINESS REVIEW CONTINUED

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

BUSINESS REVIEW CONTINUED

STAKEHOLDER INTERESTS AND BOARD DECISION-MAKING (SECTION 172 OF THE

COMPANIES ACT 2006)

The following disclosure, which is required by the Companies Act 2006 and the AIC Code of Corporate Governance, describes

how the Directors have had regard to the views of the Company’s stakeholders in their decision-making.

STAKEHOLDER GROUP HOW THE BOARD HAS ENGAGED WITH THE COMPANY’S STAKEHOLDERS

Investors

The Board’s key mechanisms of engagement with investors include:

• The Annual and Half-yearly Reports

• The Annual General Meeting

• The Company’s website which hosts reports, articles and insights, monthly factsheets and video

interviews with the Portfolio Manager

• The Company’s distribution list which is maintained by Frostrow and is used to communicate with

shareholders on a regular basis

• Online seminars with presentations from the Portfolio Manager

• One-to-one investor meetings

The AIFM and the Portfolio Manager, on behalf of the Board, completed a programme of investor

relations throughout the year, reporting to the Board on the feedback received. In addition, the Chairman

has been and remains available to engage with the Company’s shareholders where required.

Portfolio

Manager

The Board met regularly with the Portfolio Manager throughout the year, both formally at quarterly

Board meetings and informally, as required. The Board engaged primarily with key members of the

portfolio management team, discussing the Company’s overall performance as well as developments at

individual portfolio companies and wider macroeconomic developments.

The Directors also met with members of the Portfolio Manager’s risk management and compliance



of ESG considerations into the investment process.

The Management Engagement Committee reviewed the performance of the Portfolio Manager and the

terms and conditions on which they are engaged. The Board carried out an overall review of the Portfolio

Management Agreement, which was subsequently restated.

Other Service Providers

The Board met regularly with the AIFM, representatives of which attend every quarterly Board

meeting to provide updates on risk management, accounting, administration, corporate

governance and marketing matters.

The Management Engagement Committee reviewed the performance of all the Company’s service

providers, receiving feedback from Frostrow in their capacity as AIFM and Company Secretary. The

AIFM, which is responsible for the day-to-day operational management of the Company, meets

and interacts with the other service providers including the Depositary, Custodian and Registrar,

on behalf of the Board, on a daily basis. This can be through email, one-to-one meetings and/or

regular written reporting.

The Audit Committee reviewed the quality and effectiveness of the audit and recommended to the

Board that it be proposed to shareholders that BDO LLP (“BDO”) be re-appointed as Auditor. The

Audit Committee also met with BDO to review the audit plan and set their remuneration for the year.

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STRATEGIC REPORT

As an externally managed investment trust, the Company has no employees, customers, operations or premises. Therefore,

the Company’s key stakeholders (other than its shareholders) are considered to be its service providers. The need to foster

good business relationships with the service providers and maintain a reputation for high standards of business conduct are

central to the Directors’ decision-making as the Board of an externally managed investment trust.

KEY AREAS OF ENGAGEMENT MAIN DECISIONS AND ACTIONS TAKEN

• Ongoing dialogue with shareholders

concerning the strategy of the Company,

performance and the portfolio.

• The impact of market volatility caused by,

inter alia, the COVID-19 pandemic and certain

geopolitical events, on the portfolio.

• Share price performance.

The Board and the Portfolio Manager provided updates via RNS, the Company’s



The Board continued to monitor share price movements closely. When the discount

of the share price to the net asset value per share exceeded 6%, the Company sought

to buy back shares in the market. As a result, 2,421,263 shares were bought back

during the year. No shares were issued at a premium to the net asset value per share

during the year. Please refer to pages 28 and 29for further information.

• Portfolio composition, performance, outlook

and business updates.

• The ongoing impact of the COVID-19

pandemic on the Portfolio Manager’s business

and the businesses of the portfolio companies.

• The integration of sustainability and ESG

factors to the Portfolio Manager’s investment

process.

• The Portfolio Manager’s system of internal

controls and investment risk management

including their cyber security arrangements.

• The terms and conditions of the Portfolio

Management Agreement.





New York during the year, to meet with the OrbiMed team in person.

The Board concluded that it was in the interests of shareholders for OrbiMed to

continue in their role as Portfolio Manager. A number of minor updates were made

to the terms and conditions of the Portfolio Management Agreement, which was

restated. Please refer to page 49 and 50 for further details.

The Audit Committee concluded that the Portfolio Manager’s internal controls were

satisfactory. Please refer to the Audit Committee Report, beginning on page 55, for

further information.

• The promotion and marketing strategy of the

Company.

• Service providers’ internal controls, business

continuity plans and cyber security provisions.

• The effectiveness of the audit and the Auditor’s

reappointment.

• The terms and conditions under which the

Auditor is engaged.

The Board concluded that it was in the interests of shareholders for Frostrow to

continue in their role as AIFM. A number of minor updates were made to the terms

and conditions of the AIFM Agreement, which was restated. See pages 49 and 50 for

further details.

The Board approved the Audit Committee’s recommendation that it would be in the

interests of shareholders for BDO to be re-appointed as the Company’s auditor for a

further year. Please refer to the Audit Committee Report beginning on page 55 and the

Notice of AGM beginning on page 101 for further information.

By order of the Board

Frostrow Capital LLP

Company Secretary

14 June 2023

BUSINESS REVIEW CONTINUED

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

ROGER YATES

Independent Non-Executive Chairman

STEVE BATES

Senior Independent Non-Executive Director

JULIA LE BLAN

Independent Non-Executive Director

BOARD OF DIRECTORS

Joined the Board in December 2021

Remuneration: £40,000 pa*

Committees

Roger is Chairman of the Nominations

Committee. See page 40 for

further information.

Shareholding in the Company

10,000

Skills and Experience

Roger started his career in investment

management at GT Management in 1981

and subsequently held positions at Morgan

Grenfell and Invesco as Chief Investment





and led the company for a decade. More

recently, Roger was the Senior Independent

Director and Remuneration Committee

Chairman at IG Group Holdings plc,

Chairman of Electra Private Equity PLC

and Chairman of Pioneer Global Asset

Management S.p.A. He was also a Non-

Executive Director of J.P. Morgan Elect PLC

from 2008 until 2018.

Other Appointments

Roger is a non-executive director, senior

independent director and remuneration

committee chair at Jupiter Fund

Management plc. He is also a non-

executive director and senior independent

director at Mitie Group plc.

Standing for re-election: Yes

Joined the Board in July 2015

Remuneration: £30,000 pa*

Committees

Steve is Chairman of the Management

Engagement Committee. See page 40 for

further information.

Shareholding in the Company

10,000

Skills and Experience

Steve has extensive experience as an

Investment Manager and was head of

global emerging markets at J.P. Morgan

Asset Management until 2002. Since then,

he has been an Executive Director of Guard

Cap Asset Management Limited (and its

predecessor company).

Other Appointments

Steve is a Director of GuardCap Asset

Management Ltd (where he is also a

non-executive Director of GuardCap UCITS

Funds PLC (an investment company with

variable capital, incorporated in Ireland)).

He also sits on, or is advisor to, various

committees in the wealth management

and pension fund areas.

Standing for re-election: Yes

Joined the Board in July 2016

Remuneration: £ 32,000 pa*

Committees

Julia is Chair of the Audit Committee and

the Valuation Committee40 for

further information.

Shareholding in the Company

7,000

Skills and Experience

A Chartered Accountant, Julia has





a non-executive Director of Impax

Environmental Markets plc, JPMorgan

US Smaller Companies Investment Trust

plc and Aberforth Smaller Companies

Trust PLC. She was a tax partner at

Deloitte and sat for two terms on the AIC’s

technical committee.

Other Appointments

Julia is a non-executive Director of British

& American Investment Trust PLC.

Standing for re-election: Yes

* Information as at 31 March 2023

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

GEOFF HSU

Non-Executive Director

THE RT HON LORD WILLETTS FRS

Independent Non-Executive Director

DR NICKI SHEPHERD

Independent Non-Executive Director

Joined the Board in May 2018

Remuneration: Nil

Committees

Geoff does not sit on any of the

Board’s Committees.

Shareholding in the Company

Nil

Skills and Experience

Geoff is a General Partner of OrbiMed,

having joined in 2002 as a biotechnology

analyst. Prior to joining OrbiMed, he worked

as an analyst in the healthcare investment

banking group at Lehman Brothers.



cum laude from Harvard University and

holds an M.B.A. from Harvard Business

School. Prior to business school, he spent

two years studying medicine at Harvard

Medical School.

Other Appointments

Geoff is a General Partner of OrbiMed and

does not have any other appointments.

Standing for re-election: Yes

* Information as at 31 March 2023

BOARD OF DIRECTORS CONTINUED

Joined the Board in November 2015

Remuneration: £27,500 pa*

Committees

See page 40 for further information.

Shareholding in the Company

Nil

Skills and Experience

A former Board member of the Francis

Crick Institute and of the Biotech Industry

Association, Lord Willetts was the Member

of Parliament for Havant from 1992-2015

and was Minister for Universities and

Science from 2010-2014. Before that, he

worked at HM Treasury and the Number 10

Policy Unit. He also served as Paymaster

General in John Major’s Government.

Other Appointments

Lord Willetts is a Board member of

Darktrace plc, Verditek plc, Satixfy

Communications Ltd and of Tekcapital.

He is Co-chair of Synbioven, a company

which invests in synthetic biology. He

serves on the board of UK Research

and Innovation. He is also an Honorary



College, Oxford.

Standing for re-election: Yes

Joined the Board in January 2021

Remuneration: £27,500 pa*

Committees

See page 40 for further information.

Shareholding in the Company

Nil

Skills and Experience

Nicki is the Founder and Director of

Bellows Consulting focused on supporting

translational research in the biomedical

space. She was previously at the Wellcome

Trust where she was responsible for

the establishment, management and

oversight of the Translation Fund, a £30m

a year investment into new product

development covering therapeutics,

vaccines, diagnostics, medical devices

and regenerative medicine over a range

of clinical indications. Nicki has also held

positions at AstraZeneca in Late-Stage

Development and Manufacturing.

Other Appointments

Nicki is a Member of the CARB-X

Advisory Board.

Standing for re-election: Yes

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

THE BOARD AND COMMITTEES

Responsibility for effective governance lies with the Board. The governance framework of the Company reflects the fact

that as an investment company it has no employees. Portfolio management is delegated to OrbiMed and risk management,

company management, company secretarial, administrative and marketing services are delegated to Frostrow. The Board

generates value for shareholders through its oversight of the service providers and management of costs associated with

running the Company.

THE BOARD

Chairman – Roger Yates

Senior Independent Director – Steve Bates

Four additional non-executive Directors, three of whom are considered independent.

Key responsibilities:

• to provide leadership and set the strategy, values and standards of the Company within a framework of effective

controls which enable risk to be assessed and managed;

• to ensure that a robust corporate governance framework is implemented; and

• to challenge constructively and scrutinise the performance of all third-party service providers.

Audit Committee Nominations Committee

Management Engagement

Committee

Valuation Committee

Chair

Julia Le Blan

All Independent Directors

Key responsibilities:

• to review the Company’s



• to oversee the risk and

control environment and



• to have primary

responsibility for the

relationship with the

Company’s external

auditor, to review their

independence and

performance, and

to determine their

remuneration.

Chairman

Roger Yates

All Independent Directors

Key responsibilities:

• to review regularly the

Board’s structure and

composition; and

• to make

recommendations for

any changes or new

appointments.

Chairman

Steve Bates

All Independent Directors

Key responsibilities:

• to review regularly

the contracts, the

performance and

remuneration of the

Company’s principal

service providers.

Chair

Julia Le Blan

Steve Bates, Roger Yates

Key responsibilities:

• to consider the

valuations of the

Company’s unquoted

investments; and

• to consider the

appropriateness

of the Company’s

valuation policies and

methodologies.



Company Secretary, will be available for inspection at the Annual General Meeting, and can be found on the Company’s

website at www.biotechgt.com

CORPORATE GOVERNANCE

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

Board of Directors

Entirely non-executive, majority independent

Committees:

 Audit Committee



Management Engagement Committee



Nominations Committee



Valuation Committee

Frostrow Capital LLP

(AIFM, Company Secretary, Fund Administrator)

Reporting



Balance sheet



Liquidity and gearing



Income forecasts



 



 



 

(monthly)



 

guidelines (monthly)



Compliance report (semi annually)



 

J.P. Morgan

(Depositary and Custodian)

Reporting



Depositary’s report (semi-annually)



Effectiveness of control environment (annually)



Presentations on subjects of interest e.g. cyber security (as required)

OrbiMed

(Portfolio Management)

Reporting



Portfolio performance update at each meeting



Compliance report (semi-annually)



Effectiveness of control environment (annually)



Presentations on subjects of interest

e.g. Risk Management, Investment Compliance (as required)

Winterflood

Securities

(Corporate Broker)

Link Group

(Registrar)

Reporting



Effectiveness of control environment (annually)



Presentations on subjects of interest e.g. cyber security (as required)

Charles Russell

Speechlys

(Legal Adviser)

BDO LLP

(Statutory Auditor)

Principal third-party

service providers

The Directors:



receive regular reporting

at meetings;



review the assurance

report produced by each

organisation;



receive additional

reporting on the control

environment from each

of the principal third –

party service providers;

and



formally evaluate their

performance on an

annual basis.

Secondary third-

party service

providers

The Directors:



receive regular reporting

on their activities at

meetings; and



formally evaluate their

performance on an

annual basis.

The Board has a responsibility for

establishing and assessing internal

controls to ensure the Company



within the risk appetites set by the

Board. As the Company relies on

third-party service providers for all

of its operations, it obtains regular

reports from these counterparties

on the nature and effectiveness of

controls within these organisations.

The Company’s principal service

providers are the Portfolio Manager,

OrbiMed, the AIFM, Company

Secretary and administrator,

Frostrow Capital, the custodian

and depositary, J.P. Morgan and

the registrar, Link Group. The

Board receives regular reporting

on compliance with the control

environment and assesses the

effectiveness of the internal controls

through review of the assurance

reports from each of these

organisations.

In addition, the Company retains a

number of secondary providers who

report regularly to the Board. These

include the Company’s legal adviser

and the corporate stockbroker.

The Management Engagement

Committee formally evaluates

the performance and service

delivery of all third-party service

providers at least annually and the

Audit Committee evaluates the

performance of the Company’s

external auditor annually, following

the completion of the annual audit

process.

INTERNAL CONTROLS STRUCTURE

CORPORATE GOVERNANCE CONTINUED

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

CORPORATE GOVERNANCE STATEMENT

The Board is committed to maintaining and demonstrating

high standards of corporate governance. The Board has

considered the principles and recommendations of the AIC



(the AIC Code). The AIC Code addresses all the principles

set out in the UK Corporate Governance Code (the UK

Code), as well as setting out additional provisions on issues



The Board considers that reporting against the principles

and provisions of the AIC Code (which has been endorsed

by the Financial Reporting Council) will provide better

information to shareholders. By reporting against the

AIC Code, the Company meets its obligations under the

UK Code (and associated disclosure requirements under



not need to report further on issues contained in the UK

Code which are irrelevant to the Company as an externally

managed investment company, including the provisions

relating to the role of the chief executive, executive

directors’ remuneration and the internal audit function.

The AIC Code is available on the AIC’s website

www.theaic.co.uk and the UK Code can be viewed on the

Financial Reporting Council website www.frc.org.uk. The

AIC Code includes an explanation of how the AIC Code

adapts the principles and provisions set out in the UK Code

to make them relevant for investment companies.

The Company has complied with the principles and

provisions of the AIC Code. The Corporate Governance

Report on pages , forms part of the Report of the

Directors on pages .

BOARD LEADERSHIP AND PURPOSE

PURPOSE AND STRATEGY

The purpose and strategy of the Company are described in

the Strategic Report.

BOARD CULTURE

The Board aims to consider and discuss fully differences

of opinion, unique vantage points and to exploit fully areas

of expertise. The Chairman encourages open debate

to foster a supportive and cooperative approach for all

participants. Strategic decisions are discussed openly and

constructively. The Board aims to be open and transparent

with shareholders and other stakeholders and for the

Company to conduct itself responsibly, ethically and fairly

in its relationships with service providers.

The Board has gained assurance on whistleblowing

procedures at the Company’s principal service providers

to ensure employees at those companies are supported in

speaking up and raising concerns. No concerns relating to

the Company were raised during the year.

SHAREHOLDER RELATIONS

The Company has appointed Frostrow to provide marketing

and investor relations services in the belief that a well-

marketed investment company is more likely to grow over

time, have a more diverse, stable list of shareholders and

its shares will trade closer to the net asset value per share

over the long run. Frostrow actively promotes the Company

as set out on pages .

SHAREHOLDER COMMUNICATIONS

The Board, the AIFM and the Portfolio Manager consider

maintaining good communications with shareholders

to be a priority. They engage with larger shareholders

through meetings and presentations. Shareholders are

informed by the publication of annual and half-yearly



are supplemented by the daily release of the net asset

value per share to the London Stock Exchange and the

publication of monthly fact sheets. All this information,

including interviews with the Portfolio Manager, is available

on the Company’s website at www.biotechgt.com.

The Board monitors changes to the share register of

the Company; it also reviews correspondence from

shareholders (if any) at each meeting and maintains regular

contact with major shareholders. Shareholders who wish to

raise matters with a Director may do so by writing to them



The Board supports the principle that the Annual General

Meeting (AGM) be used to communicate with private

investors in particular. Shareholders are encouraged to

attend the AGM, where they are given the opportunity to

question the Chairman, the Board and representatives of the

Portfolio Manager. In addition, the Portfolio Manager makes

a presentation to shareholders covering the investment

performance and strategy of the Company at the AGM.

Details of the proxy votes received in respect of each

resolution are made available on the Company’s website

following the AGM.

CORPORATE GOVERNANCE CONTINUED

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

CORPORATE GOVERNANCE CONTINUED

SIGNIFICANT HOLDINGS AND VOTING RIGHTS

Details of the shareholders with substantial interests in the

Company’s shares, the Directors’ authorities to issue and

repurchase the Company’s shares, and the voting rights

of the shares are set out in the Report of the Directors on

pages  to .

CONFLICTS OF INTEREST



power to authorise any potential conflicts of interest that

may arise and impose such limits or conditions as it thinks



and is reviewed at every Board meeting. No conflicts of

interest arose during the year.

DIVISION OF RESPONSIBILITIES

THE CHAIRMAN AND THE SID

The Chairman’s primary role is to provide leadership to the

Board, assuming responsibility for its overall effectiveness

in directing the Company.

The Senior Independent Director (“SID”) serves as

a sounding board for the Chairman and acts as an

intermediary for the other Directors and the shareholders.

A full description of the responsibilities of the Chairman

and the SID can be found on the Company’s website: www.

biotechgt.com

DIRECTOR INDEPENDENCE

The Board consists of six non-executive Directors. All of the

Directors except for Geoff Hsu are independent of OrbiMed



of the Board is a Director of another investment company

managed by OrbiMed, nor has any Board member (with

the exception of Geoff Hsu) been an employee of OrbiMed

or any of the Company’s service providers. Further details

regarding the Directors can be found on pages .

The Board carefully considers the various guidelines for

determining the independence of non-executive Directors,

placing particular weight on the view that independence

is evidenced by an individual being independent of mind,

character and judgement. All Directors, with the exception

of Geoff Hsu, are presently considered to be independent.

Directors obtain approval from the Chairman prior to

accepting any new appointments.

BOARD MEETINGS

The Board is responsible for the effective stewardship of

the Company’s affairs. Strategy issues and all material

operational matters are considered at its meetings.

The Board meets formally at least four times each year. The

primary focus at regular Board meetings is the review of

investment performance and associated matters, including

asset allocation, marketing/investor relations, peer group

information and industry issues.

MEETING ATTENDANCE

The table below sets out the number of scheduled Board and c

and the number of meetings attended by each Director.

Board

Management

Engagement

Committee

Audit

Committee

Nominations

Committee

Valuation

Committee

 4 1 2 1 4

Steve Bates 4    

Geoff Hsu



4 N/A N/A N/A N/A

Julia Le Blan 4    4

Dr Nicki Shepherd 4    N/A

The Rt Hon Lord Willetts  –  – N/A

Roger Yates



4    

Andrew Joy



 –  – 



committees.

c



GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023



revenue and expense projections, analyses of transactions,

performance metrics and performance comparisons, share

price and net asset value performance.

The Board is responsible for setting the Company’s

corporate strategy and reviews the continued

appropriateness of the Company’s investment objective,

investment strategy and investment restrictions at each

meeting.

MATTERS RESERVED FOR DECISION BY THE BOARD

The Board has adopted a schedule of matters reserved for its

decision. This includes:

– decisions relating to the strategic objectives and overall

management of the Company, including the appointment

or removal of the Portfolio Manager and other service

providers, establishing the investment objectives,

restrictions, strategy and performance comparators;

 

statements, recommendation or declaration of any

dividends, determining the policy on share issuance and

buybacks;

– the Company’s internal controls, corporate governance

structure, policies and procedures; and

– matters relating to the Board and its committees,

including the appointment of directors.

Day-to-day portfolio management is delegated to OrbiMed

and operational management is delegated to Frostrow.

The Board takes responsibility for the content of

communications regarding major corporate issues, even if

OrbiMed or Frostrow acts as spokesman. The Board is kept

informed of relevant promotional material that is issued by

Frostrow.

RELATIONSHIP WITH SERVICE PROVIDERS

Representatives of the Portfolio Manager and the AIFM are

in attendance at each Board meeting. The Management

Engagement Committee evaluates the performance of

all the Company’s service providers as well as the terms

and conditions on which they are engaged. At the most



that all the service providers were performing well and

recommended to the Board that they should be retained on

the existing terms and conditions. Please refer to page 4 for

further information on the Committee’s assessment of the

AIFM and the Portfolio Manager.

EXERCISE OF VOTING POWERS

The Board and the AIFM have delegated authority to

the Portfolio Manager to vote the shares owned by the

Company. The Portfolio Manager has been instructed to

submit votes in respect of such shares wherever possible.

The Portfolio Manager may refer to the Board or the AIFM

on any matters of a contentious nature. The Board has



their approach.

The Company does not retain voting rights on any shares

that are subject to rehypothecation* in connection with the

loan facility provided by J.P. Morgan Securities LLC.

STEWARDSHIP AND ORBIMED’S RESPONSIBLE

INVESTING POLICY

The Board recognises that Environmental, Social and

Governance (“ESG”) issues can impact the performance of

investments. The Board has delegated authority to OrbiMed

to evaluate investee companies’ performance and engage

with their management teams on material ESG issues. These

matters and any other ESG related issues are discussed

regularly with the Board.

INDEPENDENT PROFESSIONAL ADVICE

The Directors have access to the advice and services of

a specialist investment trust company secretary, who

is responsible for advising the Board on all governance

matters. The Company Secretary ensures governance

procedures are followed and that the Company complies

with applicable statutory and regulatory requirements.

The Board has formalised arrangements under which

the Directors, in the furtherance of their duties, may seek

independent professional advice at the Company’s expense.

No such advice was sought during the year.

CORPORATE GOVERNANCE CONTINUED

*See glossary beginning on page  for further information.

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

CORPORATE GOVERNANCE CONTINUED

and oversee the Company’s strategic priorities. This will

include an appropriate range, balance and diversity of skills,

experience and knowledge. The Company is committed to





The Nominations Committee considers annually the skills





appointed during the year.

INDUCTION AND TRAINING

New appointees to the Board are provided with a full

induction programme. The programme covers the

Company’s investment strategy, policies and practices.

The Directors are also given key information on the

Company’s regulatory and statutory requirements as they

arise including information on the role of the Board, matters

reserved for its decision, the terms of reference of the

Board committees, the Company’s corporate governance



information. It is the Chairman’s responsibility to ensure



role and Directors are encouraged to participate in training

courses where appropriate.

DIVERSITY POLICY

The Board supports the principle of Boardroom diversity,

of which gender and ethnicity are two important aspects.

The Company’s policy is that the Board and its committees

should be comprised of directors with a diverse range of

skills, knowledge and experience and that appointments

should be made on merit against objective criteria,

including diversity in its broadest sense.

The objective of the policy is to have a broad range of

approaches, backgrounds, skills, knowledge and experience

represented on the Board. To this end, achieving a diversity

of perspectives and backgrounds on the Board will be

a key consideration in any director search process. The

Board encourages any recruitment agencies it engages to



agreed for each appointment and, from the shortlist, aims

to ensure that a diverse range of candidates is brought

forward for interview.

The Board will give due regard to the new diversity

targets in the Listing Rules (set out overleaf), but will not

discriminate unfairly on the grounds of gender, ethnicity,

age, sexual orientation, disability or socio-economic

BOARD COMPOSITION, SUCCESSION AND

EVALUATION

SUCCESSION PLANNING

The Board, meeting as the Nominations Committee,

regularly considers its structure and recognises the need

for progressive refreshment.

The Board has an approved succession planning policy to

ensure that (i) there is a formal, rigorous and transparent

procedure for the appointment of new directors; and (ii) the

Board is comprised of members who collectively display

the necessary balance of professional skills, experience,

length of service and industry knowledge.

POLICY ON THE TENURE OF THE CHAIRMAN AND

OTHER NON-EXECUTIVE DIRECTORS

The tenure of each independent, non-executive director,

including the Chairman, is not ordinarily expected to exceed

nine years. It should be noted that, in practice, the date for

departure from the Board may be on the Annual General

Meeting following this anniversary. However, the Board has

agreed that the tenure of the Chairman may be extended for

a limited time provided such an extension is conducive to the

Board’s overall orderly succession. The Board believes that

this more flexible approach to the tenure of the Chairman is

appropriate in the context of the regulatory rules that apply to

investment companies, which ensure that the chair remains

independent after appointment, while being consistent with

the need for regular refreshment and diversity.

Notwithstanding this expectation, the Board considers that

a Director’s tenure does not necessarily reduce his or her

ability to act independently and will continue to assess

each Director’s independence annually, through a formal

performance evaluation.

APPOINTMENTS TO THE BOARD

The rules governing the appointment and replacement of

Directors are set out in the Company’s articles of association

and the aforementioned succession planning policy.

Where the Board appoints a new Director during the year,

that Director will stand for election by shareholders at the

next AGM. Subject to there being no conflict of interest, all

Directors are entitled to vote on candidates for appointment

to the Board and on the recommendation for shareholders’

approval for the Directors seeking re-election at the AGM.

When considering new appointments, the Board endeavours

to ensure that it has the capabilities required to be effective

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

CORPORATE GOVERNANCE CONTINUED

background when considering the appointment of new

directors. Candidates’ educational and professional

backgrounds, their cognitive and personal strengths, are



appointment.

The Board has noted the FCA's new Listing Rules which

require companies to report against the following diversity

targets:

(a) At least 40% of individuals on the board are women;

(b) At least one of the senior board positions (Chair, CEO,

CFO or SID) is held by a woman; and

ethnic background.

As an externally managed investment company, the

Company does not have the positions of CEO or CFO and

therefore, as permitted by the Listing Rules, it has not

reported against the second target as it is not applicable.

In the absence of the aforementioned roles, the Board

considers the Chair of the Audit Committee to be a senior

position and notes that the role is currently held by a woman.

As shown in the tables below, the Company has met the third



will have regard to this target in future director recruitment

processes, due to the Board’s small size, vacancies and

recruitment opportunities arise relatively infrequently and

therefore the target may take some time to achieve.

In accordance with the Listing Rules, the Board has provided the following information in relation to its diversity as at the year end.

Number of

Board

Members

Percentage

of the Board

Number of

Senior

Positions on

the Board

Men 4 67% –

 2 33% –

 – – –

Directors were also given the opportunity to indicate if there was an ‘other category’ they wished to specify.

Number of

Board

Members

Percentage

of the Board

Number of

Senior

Positions on

the Board

 5 83% –

 – – –

 1 17% –

 – – –

Other ethnic group, including Arab – – –

 – – –

The format of the above tables is prescribed in the Listing Rules. However, as an externally managed investment trust, the Company has no executive

management functions, including the roles of CEO and CFO, and the Company has therefore excluded columns relating to executive management.

The information above was obtained by asking the Directors to indicate on an anonymous form how they should be categorised

for the purposes of the Listing Rules disclosures.

BOARD EVALUATION

During the year an internal review of the Board, its

committees and individual Directors (including each

Director’s independence) was carried out by the Board, in the

form of electronic performance evaluation questionnaires.

The review concluded that the Board worked in a collegiate,





that the structure, mix of skills and operation of the Board, its

committees, and individual Directors continue to be effective.

As an independent external review of the Board was last

undertaken in 2021, it is anticipated that the next such

review will be in 2024.

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

CORPORATE GOVERNANCE CONTINUED

The Board pays close attention to the capacity of individual

Directors to carry out their work on behalf of the Company.

In recommending individual Directors to shareholders for

re-election, it considered their other Board positions and



has the capacity to be fully engaged with the Company’s

business. The Board has considered the position of all

of the Directors as part of the evaluation process, and

believes that it would be in the Company’s best interests to

propose them for re-election at the forthcoming AGM for

the following reasons:





succeeded Andrew Joy as Chairman at the last AGM. He

has extensive knowledge of the investment sector, having

held CIO positions at Morgan Grenfell and Invesco, and



recently, he has chaired and served on the boards of

numerous investment and asset management companies.



Accountant and a former tax partner at Deloitte, she has



and the investment company sector. Julia became the





a General Partner of OrbiMed, the Portfolio Manager. He

has been a part of the team that manages the Company’s





experienced investment manager with broad knowledge

of the investment company sector. He is Chairman of the

Management Engagement Committee.



A former government minister, he has relevant experience

and a strong interest in the biotechnology sector.







biomedical charities. She brings breadth of experience

across technology and therapeutic areas and the full

product development pipeline from 'bench to bedside'.

The Chairman is pleased to report that following

the internal performance evaluation, the Directors’

performance continues to be effective and they continue

to demonstrate commitment to the role. Accordingly, the

Board recommends that shareholders vote in favour of the

Directors' re-election at the forthcoming AGM.

AUDIT, RISK AND INTERNAL CONTROL

The Statement of Directors’ Responsibilities on page 

describes the Directors’ responsibility for preparing this

report.

The Audit Committee Report, beginning on page ,

explains the work undertaken to allow the Directors to

make this statement and to apply the going concern

basis of accounting. It also sets out the main roles and

responsibilities and the work of the Audit Committee

throughout the year, and describes the Directors’ review

of the Company’s risk management and internal control

systems.

A description of the principal risks facing the Company and

an explanation of how they are being managed is provided

in the Strategic Report on pages  to .

The Board’s assessment of the Company’s longer-term

viability is set out in the Strategic  to .

REMUNERATION

The Directors’ Remuneration Report, beginning on page ,

sets out the levels of remuneration for each Director and

explains how Directors’ remuneration is determined.

By order of the Board

Frostrow Capital LLP

Company Secretary



GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

REPORT OF THE DIRECTORS

The Directors present this Annual Report on the affairs



statements and the Independent Auditor’s Report for



performance, future developments and risk management

can be found in the Strategic Report on pages  to .

COMPANY MANAGEMENT

ALTERNATIVE INVESTMENT FUND MANAGER

Frostrow, under the terms of its AIFM agreement with the

Company (the “AIFM Agreement”) provides, inter alia, the

following services:

• delegation (subject to the oversight of Frostrow and

the Board) of the portfolio management function to

OrbiMed;

• investment portfolio administration and valuation;

• risk management services;

• marketing and shareholder services;

• share price discount and premium management;

• administrative and secretarial services;

• advice and guidance in respect of corporate

governance requirements;

• maintenance of the Company’s accounting records;

• preparation and dispatch of annual and half yearly

reports and monthly fact sheets;

• ensuring compliance with applicable legal and

regulatory requirements; and

• maintenance of the Company’s website.

Under the terms of the AIFM Agreement, Frostrow is









Either party may terminate the AIFM Agreement on not less



PORTFOLIO MANAGER

OrbiMed, under the terms of its portfolio management

agreement with the AIFM and the Company (the “Portfolio

Management Agreement”) provides, inter alia, the following

services:

• the seeking out and evaluating of investment

opportunities;

• recommending the manner by which monies should be

invested, disinvested, retained or realised;

• advising on how rights conferred by the investments

should be exercised;

• analysing the performance of investments made; and

• advising the Company in relation to trends, market

movements and other matters which may affect the

investment objective and policy of the Company.



of the Company’s net asset value. The proportion of the

Company’s assets committed for investment in OrbiMed





is excluded from the fee calculation.

The Portfolio Management Agreement may be terminated

by the Company, Frostrow or the Portfolio Manager giving



PERFORMANCE FEE

The Portfolio Manager is entitled to the payment of a

performance fee which is dependent on the long-term

performance of the Company. The performance fee

is calculated by reference to the amount by which the

Company’s net asset value (NAV) has outperformed the

NASDAQ Biotechnology Index (sterling adjusted), the

Company’s benchmark index.

The fee is calculated quarterly by comparing the cumulative

performance of the Company’s NAV with the cumulative

performance of the Benchmark since the commencement





over the Benchmark. Provision is also made within the daily

NAV per share calculation as required and in accordance

with generally accepted accounting standards.

In order to ensure that only sustained outperformance

is rewarded, at each quarterly calculation date any

performance fee is based on the lower of:

(i) the cumulative outperformance of the NAV over the

Benchmark as at the quarter end date; and

(ii) the cumulative outperformance of the NAV over the

Benchmark as at the corresponding quarter end date in

the previous year.

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

In addition, a performance fee only becomes payable to the

extent that the cumulative outperformance gives rise to a

total fee greater than the total of all performance fees paid

to date. No performance fees were paid during the year and

as at the date of this report, there is no provision for future

 for further details).

The proportion of the Company’s assets invested in

OrbiMed Asia Partners L.P. is excluded from the

performance fee calculation.

DEPOSITARY AND CUSTODIAN AND PRIME

BROKER

The Company has appointed J.P. Morgan Europe Limited



the Depositary Agreement, the Company has agreed to











The Depositary has delegated the custody and safekeeping

of the Company’s assets to J.P. Morgan Securities LLC

which acts as the Company’s Custodian and Prime Broker.

Under the terms of a Delegation Agreement, liability



held in custody by J.P. Morgan Securities LLC has been

transferred from the Depositary to J.P. Morgan Securities

LLC in accordance with the AIFMD. While the Depositary

Agreement prohibits the re-use of the Company’s assets

by the Depositary or the Custodian and Prime Broker

without the prior consent of the Company or Frostrow,

the Company has consented to the transfer and re-use

of its assets by the Custodian and Prime Broker (known

as “rehypothecation”) in accordance with the terms of an

institutional account agreement between the Company,

J.P. Morgan Securities LLC and certain other J.P. Morgan



Agreement”). This activity is undertaken in order to take



borrowings as well as lower custody charges.

J.P. Morgan Securities LLC is a registered broker-dealer

and is accordingly subject to limits on rehypothecation, in

accordance with SEC rules. In the event of J.P. Morgan’s

insolvency, the Company may be unable to recover in full

all assets held by J.P. Morgan as collateral for the loan or

REPORT OF THE DIRECTORS CONTINUED

 for further

details).

AIFM AND PORTFOLIO MANAGER

EVALUATION AND RE-APPOINTMENT

The performance of the AIFM and the Portfolio Manager

is reviewed by the Board with a formal evaluation being

undertaken by the Management Engagement Committee

(the MEC) each year. As part of this process, the Board

monitors the services provided by the AIFM and the

Portfolio Manager and receives regular reports and views

from them. The Board also receives comprehensive

performance measurement reports to enable it to

determine whether or not the performance objectives

set by the Board have been met. The MEC reviewed the

appointment of the AIFM and the Portfolio Manager in



theBoard.

The Board believes the continuing appointment of the

AIFM and the Portfolio Manager is in the interests of

shareholders as a whole. In coming to this decision, the

Board took into consideration the following reasons:

– the quality and depth of experience allocated by the

Portfolio Manager to the management of the portfolio

and the level of performance of the portfolio in absolute

terms and also by reference to the Benchmark;

– the quality and depth of experience of the company

management, company secretarial, administrative

and marketing team that the AIFM allocates to the

management of the Company; and

– the terms of the AIFM and Portfolio Management

Agreements, in particular the level and method of

remuneration and the notice period, and the comparable

arrangements of a group of the Company's peers.

The Board resolved that the AIFM and the Portfolio

Manager should continue to be appointed on the same

terms and conditions set out above.

A number of minor updates to the AIFM and Portfolio

Management Agreements were agreed with Frostrow and

OrbiMed in order to:

– reflect changes in UK legislation following the UK's exit

from the European Union;

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

REPORT OF THE DIRECTORS CONTINUED

– reflect best practice in areas such as stewardship; and

– clarify and update provisions based on how the parties

work in practice.

For the avoidance of doubt, no changes were made to the

material terms and conditions of the agreements including

the fee arrangements and the notice periods.

LOAN FACILITY

The Company’s borrowing requirements are met through

the utilisation of a loan facility, repayable on demand,

provided by J.P. Morgan Securities LLC. The potential draw

down of the Company’s loan facility with J.P. Morgan is



however under the Company's investment policy, the





).

*see glossary beginning on page .

SHARE CAPITAL





shares rank equally for dividends and distributions. Each

shareholder is entitled to one vote on a show of hands and,

on a poll, to one vote for every share held.

At the start of the year under review, the Directors had





shares in the market. At the Company’s annual general







the time) on a non-pre-emptive basis and to buy back up to



issued share capital at the time) were granted.



shares were repurchased during the year and cancelled;

there are no shares held in Treasury. Further information on

the Company’s share issuance and buyback policies can be

found on pages  and .

The giving of powers to issue or buy back the Company’s

shares requires the relevant resolution to be passed by

shareholders. Proposals for the renewal of the Board’s

authorities to issue and buy back shares are detailed in the

Notice of AGM beginning on page .

There are no restrictions concerning the transfer of

securities in the Company; no special rights with regard

to control attached to the securities; no restrictions on

voting rights; no agreements between holders of securities

regarding their transfer known to the Company; and no

agreements which the Company is party to that might

affect its control following a successful takeover bid.

ANNUAL GENERAL MEETING

THE FOLLOWING INFORMATION TO BE CONSIDERED

AT THE FORTHCOMING ANNUAL GENERAL MEETING IS

IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt about the action you should take, you

should seek advice from your stockbroker, bank manager,





amended). If you have sold or transferred all of your ordinary

shares in the Company, you should pass this document,

together with any other accompanying documents, including

the form of proxy, at once to the purchaser or transferee, or

to the Stock broker, bank or other agent through whom the

sale or transfer was effected, for onward transmission to the

purchaser or transferee.

The Company’s Annual General Meeting will be held at





In particular, resolutions relating to the following items

of business will be proposed at the forthcoming Annual

General Meeting.













The full text of the resolutions can be found in the Notice of

Annual General Meeting on pages  to . Explanatory

notes regarding the resolutions can be found on pages



GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

DIRECTORS

DIRECTORS’ FEES

A report on Directors’ Remuneration and the Directors’

Remuneration Policy are set out on pages  to .

DIRECTORS’ & OFFICERS’ LIABILITY INSURANCE

COVER



maintained by the Board during the year ended





DIRECTORS’ INDEMNITIES

As at the date of this report, indemnities are in force

between the Company and each of its Directors under

which the Company has agreed to indemnify each Director,

to the extent permitted by law, in respect of certain liabilities

incurred as a result of carrying out his/her role as a Director



the costs of defending any criminal or civil proceedings

or any claim by the Company or a regulator as they are

incurred provided that where the defence is unsuccessful

the Director must repay those defence costs to the

Company. The indemnities are qualifying third party

indemnity provisions for the purposes of the Companies



A copy of each deed of indemnity is available for inspection



hours and will be available for inspection at the Annual

General Meeting.

SUBSTANTIAL INTERESTS IN SHARE CAPITAL



the following substantial interests in the Company's voting



between the year end and the date of this report.

Number of

shares held % held

Rathbones  

Border to Coast Pensions Partnership  

Brewin Dolphin  



Company of a substantial interest in its shares when they

have crossed certain thresholds and may not reflect their

current holding. The table does not reflect the full range

of investors in the Company. The shareholder register is

principally comprised of private wealth managers and retail

investors owning their shares through a variety of online



on page .

FINANCIAL INSTRUMENTS



including derivative instruments, cash balances, debtors

and creditors that arise directly from its operations, such as

sales and purchases awaiting settlement, accrued income





nancial statements beginning on page .

RESULTS AND DIVIDEND

The results attributable to shareholders for the year and

the transfer from reserves are shown on pages  and .





ALTERNATIVE PERFORMANCE MEASURES

 to ) set out the

required statutory reporting measures of the Company’s



the Company’s performance against a range of criteria

which are viewed as particularly relevant for investment

trusts, which are summarised on page  and explained in

greater detail in the Strategic Report, under the heading ‘Key

Performance Indicators’ on pages  and . The Directors

believe that these measures enhance the comparability of

information between reporting periods and aid investors in

understanding the Company's performance.

The measures used for the year under review are consistent

with the prior year.



calculation are set out in the Glossary beginning on page .

AWARENESS AND DISCLOSURE OF RELEVANT

AUDIT INFORMATION

So far as each of the Directors is aware, there is no relevant



which the Company’s auditors are unaware.

Each of the Directors has taken all the steps that he or she

ought to have taken as a Director in order to make himself or

REPORT OF THE DIRECTORS CONTINUED

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

REPORT OF THE DIRECTORS CONTINUED



and to establish that the Company’s auditors are aware of

that information.







POLITICAL AND CHARITABLE DONATIONS

The Company has not in the past and does not intend in

the future to make political or charitable donations.

MODERN SLAVERY ACT 2015

The Company does not provide goods or services in the



vehicle, does not have customers. The Directors do not

therefore consider that the Company is required to make a





typically professional advisers and the Company’s supply

chains are considered to be low risk in this regard.

ANTI-BRIBERY AND CORRUPTION POLICY

The Board has adopted a zero-tolerance approach

to instances of bribery and corruption. Accordingly, it

expressly prohibits any Director or associated persons,

when acting on behalf of the Company, from accepting,

soliciting, paying, offering or promising to pay or authorise

any payment, public or private, in the United Kingdom or



the Company.

A copy of the Company’s anti-bribery and corruption policy

can be found on its website at www.biotechgt.com. The

policy is reviewed annually by the Audit Committee.

CRIMINAL FINANCES ACT 2017

The Board has adopted a zero-tolerance approach to the

criminal facilitation of tax evasion. A copy of the Company’s

policy on preventing the facilitation of tax evasion can be

found on the Company’s website www.biotechgt.com. The

policy is reviewed annually by the Audit Committee.

GLOBAL GREENHOUSE GAS EMISSIONS

The Company is an investment trust, with neither



operational control of the assets it owns. It has no

greenhouse gas emissions to report from its operations,

nor does it have responsibility for any other emissions



(Strategic Reports and Directors’ Reports) Regulations



Liability Partnerships (Energy and Carbon Report)



underlying investment portfolio. Consequently, the



during the year in respect of which the Directors’ Report

is prepared and therefore is exempt from the disclosures

required under the Streamlined Energy and Carbon

Reporting criteria.

COMMON REPORTING STANDARD (CRS)

CRS is a global standard for the automatic exchange

of information commissioned by the Organisation for

Economic Cooperation and Development and incorporated

into UK law by the International Tax Compliance



certain additional details to HMRC in relation to certain

shareholders. The Registrars, Link Group, have been



with HMRC on behalf of the Company.

CORPORATE GOVERNANCE

The Corporate Governance Report set out on pages 

 forms part of the Report of the Directors.

NOMINEE SHARE CODE

Where shares are held in a nominee company name and



in person, the Company nevertheless undertakes:

• to provide the nominee company with multiple copies of

shareholder communications, so long as an indication of

quantities has been provided in advance; and

• to allow investors holding shares through a nominee

company to attend general meetings, provided the

correct authority from the nominee company is

available.

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

Nominee companies are encouraged to provide the

necessary authority to underlying shareholders to attend

the Company’s general meetings.

BENEFICIAL OWNERS OF SHARES –

INFORMATION RIGHTS



the registered holder of those shares to receive information



required to direct all communications to the registered

holder of their shares rather than to the Company’s

registrar, Link Group, or to the Company directly.

SECURITIES FINANCIAL TRANSACTIONS

REGULATION (SFTR) DISCLOSURE



transactions, securities or commodities lending and

securities or commodities borrowing, buy-sell back

transactions or sell-buy back transactions and margin

lending transactions. Whilst the Company does not engage

in such SFTs it does engage in Total Return Swaps (TRS).

The Company’s exposure to TRS can be found on the

Company’s website www.biotechgt.com.

UK SANCTIONS

The Board has made due diligence enquiries of the service

providers that process the Company's shareholder data, to

ensure the Company's compliance with the UK sanctions



that they check the Company's shareholder data against

the UK sanctions list on a daily basis. At the date of this



the Company's shareholder register. The Board notes that

stockbrokers and execution-only platforms also carry out

their own due diligence.

ARTICLES OF ASSOCIATION

Amendment of the Company’s Articles of Association

requires a special resolution to be passed by shareholders.

There are no changes proposed this year.

By order of the Board

Frostrow Capital LLP

Company Secretary



REPORT OF THE DIRECTORS CONTINUED

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

The Directors are responsible for preparing the Annual



applicable law and regulations.







in accordance with UK-adopted international accounting

standards. Under company law, the Directors must not



that they give a true and fair view of the state of affairs of



that period.



required to:

• select suitable accounting policies and then apply them

consistently;

• make judgements and accounting estimates that are

reasonable and prudent;

• state whether they have been prepared in accordance

with UK-adopted international accounting standards,

subject to any material departures disclosed and



 

basis unless it is inappropriate to presume that the

Company will continue in business; and

• prepare a directors’ report, a strategic report and

directors’ remuneration report which comply with the



The Directors are responsible for keeping adequate



the Company’s transactions and disclose with reasonable







They are also responsible for safeguarding the assets of

the Company and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

The Directors are responsible for ensuring that the Annual



balanced, and understandable and provide the information

necessary for shareholders to assess the Company's

position, performance, business model and strategy.

WEBSITE PUBLICATION

The Directors are responsible for ensuring the Annual Report



Financial statements are published on the Company’s

website in accordance with legislation in the United

Kingdom governing the preparation and dissemination of



other jurisdictions. The maintenance and integrity of the

Company’s website is the responsibility of the Directors.

The Directors’ responsibility also extends to the ongoing



RESPONSIBILITY STATEMENT OF THE

DIRECTORS IN RESPECT OF THE ANNUAL

REPORT



 

accordance with the applicable set of accounting

standards and give a true and fair view of the assets,





• the Annual Report includes a fair review of the

development and performance of the business and



description of the principal risks and uncertainties that

they face.

The Directors consider the Annual Report, taken as a

whole, is fair, balanced and understandable and provides

the information necessary for shareholders to assess the

Company’s position and performance, business model and

strategy.

On behalf of the Board

Roger Yates

Chairman



STATEMENT OF DIRECTORS’ RESPONSIBILITIES

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

AUDIT COMMITTEE REPORT

COMPOSITION AND MEETINGS

The Audit Committee (the Committee) comprises all of the

independent Directors whose biographies can be found

on pages  to , Julia Le Blan, who has recent and





the requirement for the Committee as a whole to have

competence relevant to the sector in which the Company

operates. The Committee members have a combination



relevant to both the biotechnology and investment trust

sectors.

The Committee met twice during the year. Attendance by

each Director is shown in the table on page .

Role and Responsibilities of the Committee:

 To review the Company’s half-yearly and annual



 To advise the Board on whether the Annual Report,

taken as a whole, is fair, balanced and understandable.

 To review the risk management and internal control

processes of the Company and its key service

providers.

4. To assess the effectiveness of the external audit

as well as the independence and objectivity of the

Auditor.

 To be responsible for the selection/tender process for

the external Auditor, to agree the scope of the external

Auditor's work and set their remuneration.

 To review and approve any non-audit work to be

carried out by the Auditor.

 To consider the need for an internal audit function.

 To assess the going concern and longer-term viability

of the Company.

 

A comprehensive description of the Committee’s role, its

duties and responsibilities, can be found in its terms of

reference which are available for review on the Company’s

website at www.biotechgt.com.

SIGNIFICANT ISSUES CONSIDERED BY THE

COMMITTEE DURING THE YEAR

FINANCIAL STATEMENTS

The production of the Annual Report (including the external

audit) is a thorough process involving input from a number



that the Annual Report is fair, balanced and understandable,

the Board has requested that the Committee advise on



part of this process, the Committee has considered the

following:

• the procedures followed in the production of the Annual

Report, including the processes in place to ensure the

accuracy of the factual content;

• the extensive levels of review that were undertaken in

the production process by the AIFM and the Committee;

and

• the internal control environment as operated by the

Portfolio Manager, AIFM and other service providers.

As a result of the work undertaken by the Committee, it





understandable and provides the information necessary for



performance, business model and strategy. The Committee



COMPANY’S INVESTMENTS – VALUATION AND

OWNERSHIP

The Committee approached and dealt with this area of risk by:

•  that all investment

holdings and cash/deposit balances had been agreed



Prime Broker. In addition, the Committee reviewed details

of the internal control procedures in place at the Portfolio

Manager, the AIFM and the Custodian and Prime Broker

and also received regular reports from both the Custodian

and Prime Broker and the Depositary (whose role it is

to safeguard the Company’s assets and to verify their

valuation);

 

place to record investment transactions and income,

and to value the portfolio;

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

AUDIT COMMITTEE REPORT CONTINUED

• reviewing and amending, where necessary, the

Company’s register of key risks in light of changes to

the portfolio and the investment environment; and

• gaining an overall understanding of the performance of

the portfolio both in capital and revenue terms through

comparison to the Benchmark.

VALUATION OF UNQUOTED INVESTMENTS

The Company has the ability to make unquoted



of acquisition. This does not include any holdings that

are subject to an IPO lock-in (see glossary beginning on

). Both the Directors and the AIFM need to ensure

that an appropriate value is placed on such investments

within the Company’s published net asset value. The

Committee has worked with the Portfolio Manager and

the AIFM to establish clear guidelines for the valuation

of unquoted investments, including the use of valuations

produced by independent external valuers, where

appropriate.

Last year, the Board established a Valuation Committee which

considers in detail the valuations and valuation methodologies

employed in respect of the unquoted assets. The Valuation

Committee also considers whether the third party valuer has

followed appropriate standards and established valuation

procedures, taking into account the views of the Company's

external auditor. The Audit Committee reviewed the minutes

of the Valuation Committee meetings held after the year end

and the half year end and noted the recommendations it had

made to the Board.

RECOGNITION OF REVENUE FROM INVESTMENTS

The Committee took steps to gain an understanding

of the processes in place to record investment income

and transactions. The Committee sought and received



and receivable had been accounted for correctly. The

Committee noted and took comfort from the segregation

of duties in place between the AIFM and the Custodian and

Prime Broker.

TAXATION – INVESTMENT TRUST STATUS

The Committee ensured that the Company continued to



in order to maintain its investment trust status, by:

 

continues to meet the eligibility conditions, as outlined



meeting and also as part of the monthly compliance

monitoring report sent to the Board; and

– understanding the risks and consequences if the

Company breaches this approval in future years.

CALCULATION OF AIFM, PORTFOLIO

MANAGEMENT AND PERFORMANCE FEES

The AIFM, portfolio management and performance

fees are calculated in accordance with the AIFM and

Portfolio Management Agreements. Both the Committee

and the Auditor review and agree the calculation of any

performance fee that becomes payable, however no

performance fees became payable during the year under

review.

OTHER REPORTING MATTERS

AUDIT REGULATION

The Committee has not had to consider any new audit

regulations in the past year. It has, however, taken note

of reporting guidance and thematic reviews published by

the FRC and determined how to apply any relevant best

practice to the Company’s reporting.

The Committee also reviews the outcomes of the FRC’s



with the Auditor.

The Committee has noted the government response to the

consultation on strengthening the UK’s audit, corporate

reporting and corporate governance systems. We await



which will create a new Audit, Reporting and Governance

Authority, amongst other changes.

INVESTMENT PERFORMANCE

The Committee gained an overall understanding of the

performance of the investment portfolio, both in capital

and revenue terms, through ongoing discussions with the

Portfolio Manager and also with comparison to suitable key

performance indicators.

ACCOUNTING POLICIES

During the year, the Committee ensured that the

accounting policies, as set out on pages  to , were

applied consistently throughout the year. In light of there

being no unusual transactions during the year or other

possible reasons, the Committee agreed that there was no

reason to change the policies.

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

GOING CONCERN







going concern basis. The Committee’s review of the



the cash and cash equivalent position of the Company;



portfolio liquidity, which estimated a liquidation of c.

of the portfolio within seven trading days (based on current

market volumes). Stress testing was also conducted as

described below. Further information is provided in the

Strategic Report on page.

VIABILITY STATEMENT

The Committee also considered the longer-term viability of

the Company in connection with the Board’s statement in

the Strategic Report on pages  and . The Committee



cash flows and liquidity position), the principal risks and

uncertainties and the results of stress tests. The tests

assumed falls in the Company's NAV and reductions in the

liquidity of the portfolio and then examined the effect this

would have on the Company's expenses and the Company's

ability to meet its liabilities as they fell due.

In even the most stressed scenario, the Company was





able to meet its liabilities as they fall due. Based on the

information available to the Directors at the time, the

Committee therefore concluded it was reasonable for the

Board to expect that the Company will be able to continue

in operation and meet its liabilities as they fall due over the



RISK MANAGEMENT AND INTERNAL CONTROLS

The Board has overall responsibility for the Company’s

risk management and internal control systems and for

reviewing their effectiveness. Operational responsibility

is delegated to the Audit Committee. The Company’s

internal control structure is summarised on page . The

Company applies the guidance published by the Financial

Reporting Council on internal controls. Internal control

systems are designed to manage, rather than eliminate,

the risk of failure to achieve the business objective and

can provide only reasonable and not absolute assurance

against material misstatement or loss. These controls aim

AUDIT COMMITTEE REPORT CONTINUED

to ensure that the assets of the Company are safeguarded,

that proper accounting records are maintained, and that the



A description of the principal risks facing the Company

(including emerging risks) and an explanation of how

they are managed is provided in the Strategic Report on

pages . The Directors have established an ongoing

process for identifying, evaluating and managing the risks

faced by the Company, including emerging risks, which are

recorded in a risk register. The Committee reviewed the

risk register during the year to ensure the risks facing the



the risk scores were appropriate. The Audit Committee, on

behalf of the Board, assesses the likelihood of occurrence

and the possible impact of each risk. The Committee then

considers the Company’s ability to reduce or mitigate the

incidence and impact of these risks on its performance and

records the controls in place.

The Committee reviewed the effectiveness of the

Company’s risk management and internal controls

systems during the year. As an externally managed

investment trust, the Company is reliant on the operational

systems of its service providers. Therefore the Audit

Committee examined the internal control reports of the

Company’s principal service providers. The Committee also

reviewed the cyber security strategies adopted by each of

the principal service providers and spoke with members of

the Portfolio Manager’s risk management and investment

compliance teams to ensure their processes remain

robust. There were no changes to the Company’s risk





Following its review, the Committee concluded that there



were required to be brought to the attention of the Board.



been in place for the year under review and up to the date

of approval of this report.

HALF YEAR REPORT AND FINANCIAL

STATEMENTS

The Committee reviewed the Half Year Report and



by the Auditor, to ensure that the accounting policies



GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

AUDIT COMMITTEE REPORT CONTINUED

statements and that they portrayed a fair, balanced and

understandable picture of the period in question.

INTERNAL AUDIT

The Committee considered whether there was a need for

the Company to have an internal audit function. As the

Company delegates its day-to-day operations to third

parties and has no employees, the Committee concluded

that there was no such need.

EXTERNAL AUDITOR

APPOINTMENT AND TENURE



this was their fourth audit of the Company.



under review and he has been the audit partner since BDO's

appointment.

THE AUDIT



inter alia, the scope of the



BDO, the Auditor's approach to testing the portfolio, and

pertinent regulatory developments. The Committee met

to discuss the progress of the

audit and the draft Annual Report. The Committee then met



The Auditor was provided with an opportunity to meet with

the Committee without the AIFM or the Portfolio Manager

being present. No concerns were raised by the Auditor

or the Committee in relation to the service provided by

the AIFM, the Portfolio Manager, or any other third-party



adverse matters brought to the Committee's attention



shareholders' attention.

INDEPENDENCE AND EFFECTIVENESS:

The Committee evaluated the independence of the Auditor



this responsibility, the Committee reviewed:

– the senior audit personnel in the audit plan for the year,



experienced staff with knowledge of the investment

trust sector working on the audit;

– the steps the Auditor takes to ensure its independence

and objectivity including their arrangements concerning

any conflicts of interest;

– the extent of any non-audit services provided by the

Auditor during the year; and

– the statement by the Auditor that they remain

independent within the meaning of the regulations and

their professional standards.

In order to consider the effectiveness of the audit process,

the Committee reviewed:

 

including their ability to communicate with

management and to resolve any issues promptly and

satisfactorily;

 

– feedback from BDO and Frostrow as the AIFM and

Company Secretary.



and the effectiveness of the audit process.

REMUNERATION

The Committee 

for the year ended This



previous year’s fee. Part of the increase was inflationary and

part was attributed to the costs of additional work relating



us will be a one-off. Although this is a large increase, the

Committee believes that the fee is in line with audit fees

payable in the investment trust sector and is reflective of the

level of work required to carry out a robust audit of a listed

company.

NON-AUDIT SERVICES

BDO did not undertake any non-audit services during the

year

fee prior to payment by the Company).

Pursuant to the Company's non-audit services policy, the

provision of any non-audit services by the Auditor must be

approved by the Audit Committee. A copy of the Company's

non-audit services policy can be found on the Company's

website: www.biotechgt.com

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

AUDITOR’S REAPPOINTMENT

BDO have indicated their willingness to continue to act as

Auditor for the forthcoming year and a resolution for their

re-appointment will be proposed at the Annual General

Meeting.

As a public company listed on the London Stock Exchange,

the Company is subject to mandatory auditor rotation

requirements. Based on these requirements, another



Committee will, however, continue to consider annually

the need to go to tender for audit quality, remuneration or

independence reasons.

AUDIT COMMITTEE REPORT CONTINUED

PERFORMANCE EVALUATION

The Committee’s performance over the past year was

reviewed as part of the annual Board evaluation. The

internal evaluation considered the composition of the



well as assessing the Committee’s role in monitoring



accounting, risk management and internal controls,

compliance with corporate governance regulations and the

assessment of the external audit.



positive and no matters of concern or requirements for

change were highlighted.

Julia Le Blan

Chair of the Audit Committee



GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

DIRECTORS’ REMUNERATION REPORT

The Directors’ Remuneration Report is subject to an annual advisory shareholder vote and therefore an ordinary resolution

for the approval of this report will be put to shareholders at the Company’s forthcoming Annual General Meeting (AGM).

The law requires the Auditor to audit certain disclosures provided in this report. Where disclosures have been audited,

they are indicated as such and the Auditor’s opinion is included in their report to shareholders beginning on page 65. The

Remuneration Policy on page 64 forms part of this report.

The independent Directors on the Board consider the framework for the Directors’ remuneration on an annual basis. The

independent Directors review the ongoing appropriateness of the Company’s remuneration policy and the remuneration of

individual Directors by reference to the activities of the Company and in comparison with other companies of a similar structure

and size. This is in line with the AIC Code.

The simple fee structure reflects the non-executive nature of the Board, which itself reflects the Company’s business model

as an externally managed investment trust (please refer to the Business Review beginning on page 26 for more information).

Accordingly, statutory reporting requirements relating to executive directors’ and employees’ pay do not apply.

No communications have been received from shareholders regarding Directors’ remuneration.

During the year, having noted that the directors’ base fee rate had remained unchanged for two years and that there has been

a period of high inflation during that time, it was agreed that each Director’s fees should be increased by 5.0% with effect

from 1 April 2023.

The table below shows the level of fees paid to Directors and the percentage increase from the prior year:

Forecasted

Year Ending

31 March

2024

Fee Level

(per annum)

2024

increase

(%)

Year Ending

31 March

2023

Fee Level

(per annum)

2023

increase

(%)

Year Ended

31 March

2022

Fee Level

(per annum)

2022

increase

(%)

Year Ended

31 March

2021

Fee Level

(per annum)

Chairman of the Board £42,000 5.0 £40,000 – £40,000 8.1 £37,000

Audit Committee Chair £33,600 5.0 £32,000 6.7 £30,000 5.3 £28,500

Management Engagement

Committee Chair

£31,500 5.0 £30,000 – £30,000 5.3 £28,500

Director £28,875 5.0 £27,500 – £27,500 5.8 £26,000

The Board believes these levels of remuneration reflect both the time commitment and the level of responsibility of each role.

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

DIRECTORS’ REMUNERATION FOR THE YEAR (AUDITED)

The Directors who served in the year received the following remuneration:

Year ended 31 March 2023 Year ended 31 March 2022

Date of

Appointment

to the Board

Fees

Taxable



Total

Fees

Taxable



Total

Steve Bates 8 July 2015 30,000 – 30,000 30,000 – 30,000

Julia Le Blan 12 July 2016 32,000 – 32,000 30,000 – 30,000

The Rt Hon Lord Willetts 11 November 2015 27,500 – 27,500 27,500 – 27,500

Dr Nicki Shepherd 18 January 2021 27,500 – 27,500 27,500 – 27,500

Roger Yates 1 December 2021 35,696 – 35,696 9,667 – 9,667

Professor Dame Kay Davies CBE* 15 March 2012 – – – 8,654 – 8,654

Andrew Joy^ 15 March 2012 12,000 – 12,000 40,000 – 40,000

164,696 – 164,696 173,321 – 173,321

The amounts shown in the table above exclude any employers’ national insurance contributions, if applicable.





* Professor Davies retired from the Board on 14 July 2021.

^ Andrew Joy retired from the Board on 19 July 2022.

Geoff Hsu joined the Board on 16 May 2018. Mr Hsu has waived his Director’s fee as he is a General Partner at OrbiMed, the

Portfolio Manager, which is party to the Portfolio Management Agreement and receives fees as described on page 48 of this

Annual Report.

The Directors are entitled to be reimbursed for reasonable expenses incurred by them in connection with the performance of

their duties and attendance at Board and General Meetings.

In certain circumstances, under HMRC rules, travel and other out of pocket expenses reimbursed to the Directors may be





RELATIVE COST OF DIRECTORS’ REMUNERATION

To enable shareholders to assess the relative cost of Directors’ remuneration, the table below shows the amount spent on

Directors’ fees compared with AIFM and portfolio management fees and the Company’s other expenses, and the amount

spent on share buybacks during the year.

2023

£’000

2022

£’000

Difference

£’000

Fees payable to non-executive Directors 165 173 (8)

AIFM, portfolio management fees and other re-occurring expenses 4,223 5,412 (1,189)

Repurchase of Company’s own shares for cancellation 22,619 6,933 15,686

DIRECTORS’ REMUNERATION REPORT CONTINUED

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

DIRECTORS’ REMUNERATION REPORT CONTINUED

DIRECTORS’ REMUNERATION REPORT

At the Annual General Meeting held in July 2022, the results in respect of the non-binding resolution to approve the Directors’

Remuneration Report were as follows:

Percentage of

votes cast

For

Percentage of

votes cast

Against

Number of

votes

withheld

99.76% 0.24% 7,729

LOSS OF OFFICE





SHARE PRICE RETURN

The chart below compares the Company’s share price total return with the NASDAQ Biotechnology Index (sterling adjusted),

which the Board has adopted as the principal comparator for both the Company’s performance and that of the Portfolio

Manager.

SHAREHOLDER TOTAL RETURN FOR TEN YEARS TO 31 MARCH 2023





















 

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

DIRECTORS’ INTERESTS IN SHARES (AUDITED)

The table below shows the interests in the Company’s share capital of the Directors serving at the year end:

Number of shares held as at

30 May

2023

31 March

2023

31 March

2022

Roger Yates (Chairman) 10,000 10,000

nil

Steve Bates 10,000 10,000

10,000

Julia Le Blan 7,000 7,000

7,000

Geoff Hsu nil nil

nil

Dr Nicki Shepherd nil

nil nil

The Rt Hon Lord Willetts nil nil

nil

None of the Directors were granted or exercised rights over shares during the year. None of the Directors is required to own

shares in the Company.

Roger Yates

Chairman

14 June 2023

DIRECTORS’ REMUNERATION REPORT CONTINUED

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

DIRECTORS’ REMUNERATION POLICY

The Board’s policy is that fees payable to the Directors should reflect the time spent by the Board on the Company’s affairs



recruited. Directors are remunerated in the form of fees payable monthly in arrears, paid to the Director personally. There are



related to the Directors’ performance, either individually or collectively. The Company does not have any employees.

None of the Directors has a service contract. The terms of their appointment provide that Directors shall retire and be subject





The fees for the Directors are determined within the limits set out in the Company’s Articles of Association. The present

aggregate limit is £350,000 per annum.

The Directors’ Remuneration Policy is subject to a binding shareholder vote every three years. It was last approved at the

AGM held in 2020 and it has therefore been recommended to shareholders for approval at the forthcoming AGM (please refer

to the Notice of AGM beginning on page 101 for further information). Of the votes cast at the 2020 AGM, 99.95% were in

favour and 0.05% were against.

This policy is reviewed annually and it is intended that it will continue for the year ending 31 March 2024 and for subsequent



GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF

THE BIOTECH GROWTH TRUST PLC

OPINION ON THE FINANCIAL STATEMENTS



• give a true and fair view of the state of the Company’s

affairs as at 31 March 2023 and of its loss for the year

then ended;

• have been properly prepared in accordance with UK

adopted international accounting standards; and

• have been prepared in accordance with the

requirements of the Companies Act 2006.



Growth Trust plc (the Company) for the year ended

31March 2023 which comprise the Income Statement, the

Statement of Financial Position, the Statement of Changes

in Equity, the Statement of Cash Flows and notes to the





has been applied in their preparation is applicable law and

UK adopted international accounting standards.

BASIS FOR OPINION

We conducted our audit in accordance with International

Standards on Auditing (UK) (ISAs (UK)) and applicable

law. Our responsibilities under those standards are further

described in the Auditor’s responsibilities for the audit of





appropriate to provide a basis for our opinion. Our audit

opinion is consistent with the additional report to the audit

committee.

Independence

Following the recommendation of the Audit Committee, we

were appointed by the Board of Directors on 20 February





of total uninterrupted engagement including retenders and

reappointments is four years, covering the years ended 31

March 2020 to 31 March 2023. We remain independent of

the Company in accordance with the ethical requirements



in the UK, including the FRC’s Ethical Standard as applied



other ethical responsibilities in accordance with these

requirements. The non-audit services prohibited by that

standard were not provided to the Company.

CONCLUSIONS RELATING TO GOING CONCERN



that the Directors’ use of the going concern basis of



is appropriate. Our evaluation of the Directors’ assessment

of the Company’s ability to continue to adopt the going

concern basis of accounting included:

• Evaluating the appropriateness of the Directors’ method

of assessing the going concern in light of market

volatility and by reviewing the information used by the

Directors in completing their assessment;

• Recalculating the liquidity of the investment portfolio,

using our own independently obtained trading data,

to verify the liquidity assumptions which underpinned

the going concern assessment and comparing it to the

liabilities and expenditure;

• 

comparison of the investments balance to the current



health of the Company; and

• Considering any other factors which could impact

on going concern such as non-compliance with laws

and regulation, legal matters and the presence of

contingencies and commitments.

Based on the work we have performed, we have not



or conditions that, individually or collectively, may cast



going concern for a period of at least twelve months from



GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE BIOTECH GROWTH TRUST PLC CONTINUED

In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material



considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant

sections of this report.

OVERVIEW

20220233 20222022

Key audit matters Valuation and ownership of investments

 

Materiality 

£3,290,000 (2022: £3,940,000) based on 1% (2022: 1%)

of net assets

AN OVERVIEW OF THE SCOPE OF OUR AUDIT

Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system

 We also addressed the risk

of management override of internal controls, including assessing whether there was evidence of bias by the Directors that

may have represented a risk of material misstatement.

Key audit matters







the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in



separate opinion on these matters.

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

Key audit matter How the scope of our audit addressed the key audit matter

Valuation and ownership of investments, Note 1 and note 8

The investment portfolio at the year-

end comprised of quoted and unquoted

investments.

We consider that the valuation and

ownership of investments is the most

nancial

statements and underpin the principal

activity of the entity. Given the



is a risk that an error in their valuation

could have a material impact on the



The investment valuations are prepared

by the Alternative Investment Fund

Manager (AIFM), Frostrow Capital LLP

and the Portfolio Manager, OrbiMed

Capital LLC, who are remunerated

based on the net asset value of the

Company. The investment valuations

are reviewed and approved by the

Board. Notwithstanding this review,

there is a potential risk of misstatement

in the investment valuations. The

majority of the investments are Level

1 quoted investments which we do not

consider to be a highly subjective area.

We do note there are three unquoted

investments which are collectively

material, the valuation of which

involves a higher level of judgment and

subjectivity.

There is also a risk of error in the

recording of investment holdings such

that the investments are misstated due

to the incorrect use of number of shares

held by the Company.

For these reasons and the materiality of



statements as a whole, we considered

this to be a key audit matter.

We responded to this matter by testing the valuation and ownership of the whole

portfolio of investments.

In respect of the quoted investments valuation testing we have for 100% of the

portfolio:

• 

• 

appropriate by corroborating these to independent sources;

• Tested the computational accuracy by multiplying the number of shares held per

the statement obtained from the custodian by the valuation per share; and

• Assessed if there were contra indicators, such as liquidity considerations,

to suggest bid price is not the most appropriate indication of fair value by

considering the realisation period for individual holdings.

In respect of unquoted investments valuation testing we have for 100% of the

portfolio:

• Considered whether the valuation methodology is the most appropriate in

the circumstances under the International Private Equity and Venture Capital

Valuation (“IPEV”) Guidelines;

• 

and our own research;

• Recalculated the value attributable to the Company;

• Where applicable, we performed back testing by comparing the valuation at IPO

to the most recent fair value per the books to assess the ability of the Company

in valuing unquoted investments;

• Considered the competence, capabilities and expertise of the management’s



considered the independence and objectivity of the expert through review of the

independence declaration made by the expert to the Company. We considered

the appropriateness of the methodology and assumptions employed by the

expert through review of the accounting framework and valuation guidelines

followed.

• Where appropriate, we performed a sensitivity analysis by developing our

own point estimate where we considered that alternative input assumptions

could reasonably have been applied and we considered the overall impact of

such sensitivities on the portfolio of investments in determining whether the

valuations as a whole are reasonable and free from bias.



• from the custodian, J.P. Morgan Securities LLC for quoted investments; and

• from the investee companies for the unquoted investments.

Key observations:

Based on our procedures performed we did not identify any matters to suggest

the valuation or ownership of both quoted and unquoted investments was not

appropriate.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE BIOTECH GROWTH TRUST PLC CONTINUED

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE BIOTECH GROWTH TRUST PLC CONTINUED

OUR APPLICATION OF MATERIALITY

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.

We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic



In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower

materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these







materiality as follows:

Company Financial statements

2023 2022

Materiality £3,290,000 £3,940,000

Basis for determining materiality 1% of net assets 1% of net assets

Rationale for the benchmark applied As an investment trust, the net

asset value is the key measure of



statements.

As an investment trust, the net

asset value is the key measure of



statements.

Performance materiality £2,460,000 £2,950,000

Basis for determining performance

materiality

75% of materiality 75% of materiality

Rationale for the percentage applied for

performance materiality

The level of performance materiality

applied was set after having considered

a number of factors including the

expected total value of known and

likely misstatements and the level of

transactions in the year.

The level of performance materiality

applied was set after having considered

a number of factors including the

expected total value of known and

likely misstatements and the level of

transactions in the year.

Lower testing threshold





generated from its investments after expenses. As a result, we determined a lower testing threshold for those items

impacting revenue return of £164,000 (2022:£197,000) based on 5% of overall materiality (2022: 5% of overall materiality).

Reporting threshold

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £164,000

(2022:£197,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on

qualitative grounds.

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE BIOTECH GROWTH TRUST PLC CONTINUED

OTHER INFORMATION

The directors are responsible for the other information. The other information comprises the information included in the

a

does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any

form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether



the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material



themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact.

We have nothing to report in this regard.

CORPORATE GOVERNANCE STATEMENT

The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that

part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate



Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate



Going concern and longer-term viability

• The Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any



• The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and

why the period is appropriate.

Other Code provisions

• Directors’ statement on fair, balanced and understandable;

 

• The section of the annual report that describes the review of effectiveness of risk management and internal control

systems; and

• The section describing the work of the Audit Committee.

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE BIOTECH GROWTH TRUST PLC CONTINUED

OTHER COMPANIES ACT 2006 REPORTING

Based on the responsibilities described below and our work performed during the course of the audit, we are required by the

Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

Strategic report and Directors’ report

In our opinion, based on the work undertaken in the course of the audit:

• 



• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit,



Directors’ remuneration

In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with

the Companies Act 2006.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to

report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from

branches not visited by us; or

• 

accounting records and returns; or

 

• we have not received all the information and explanations we require for our audit.

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the





due to fraud or error.



going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting

unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to

doso.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS



misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of



GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE BIOTECH GROWTH TRUST PLC CONTINUED

Extent to which the audit was capable of detecting

irregularities, including fraud

Irregularities, including fraud, are instances of non-

compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above,

to detect material misstatements in respect of irregularities,

including fraud. The extent to which our procedures are

capable of detecting irregularities, including fraud is detailed

below:

Non-compliance with laws and regulations

Based on:

• Our understanding of the Company and the industry in

which it operates;

• Discussion with management and those charged with

governance; and

• Obtaining and understanding of the Company’s policies

and procedures regarding compliance with laws and

regulations,



be Companies Act 2006, the FCA listing and DTR rules,

the principles of the AIC Code of Corporate Governance,

industry practice represented by the AIC SORP, UK

adopted International accounting standards, and the

Company’s 

UK tax legislation as any non-compliance of this would

lead to the Company losing various deductions and

exemptions from corporation tax.

Our procedures in respect of the above included:

• 

underlying supporting documentation;

• Enquiries of the AIFM, Administrator and those charged

with governance relating to the existence of any non-

compliance with laws and regulations;

• Review of a sample of legal invoices to look for

potential non-compliance with laws and regulations or

undisclosed contingencies and commitments;

• Reviewing minutes of meetings of those charged with

governance throughout the period for instances of non-

compliance with laws and regulations; and

• Reviewing the calculation in relation to Investment Trust

compliance to check that the Company was meeting its

requirements to retain its Investment Trust Status.

Fraud



material misstatement including fraud.

Our risk assessment procedures included:

• Enquiry with management and those charged with

governance regarding any known or suspected

instances of fraud;

• Obtaining an understanding of the Company’s policies

and procedures relating to:

o Detecting and responding to the risks of fraud; and

o Internal controls established to mitigate risks related

to fraud;

• Review of minutes of the Board and other committee

meetings throughout the period for any known or

suspected instances of fraud;

• Discussion amongst the engagement team as to



statements; and

• Obtaining an understanding of the control environment

in monitoring compliance with laws and regulations.

Based on our risk assessment, we considered the areas

most susceptible to be valuation of unquoted investments

and management override of controls.

Our procedures in respect of the above included:

• The procedures set out in the Key Audit Matters section

above;

• Recalculating investment management fees in total;

• 

and

• 

agreeing to supporting documentation and evaluating

whether there was evidence of bias by the AIFM,

Portfolio Manager and Directors that represented a risk

of material misstatement due to fraud.

GOVERNANCE

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023



regulations and potential fraud risks to all engagement

team members who were all deemed to have appropriate

competence and capabilities and remained alert to any

indications of fraud or non-compliance with laws and

regulations throughout the audit.

Our audit procedures were designed to respond to risks



recognising that the risk of not detecting a material

misstatement due to fraud is higher than the risk of

not detecting one resulting from error, as fraud may

involve deliberate concealment by, for example, forgery,

misrepresentations or through collusion. There are inherent

limitations in the audit procedures performed and the

further removed non-compliance with laws and regulations



statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on

the Financial Reporting Council’s website at: www.frc.org.

uk/auditorsresponsibilities. This description forms part of

our auditor’s report.

USE OF OUR REPORT

This report is made solely to the Company’s members,

as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken

so that we might state to the Company’s members those

matters we are required to state to them in an auditor’s

report and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility

to anyone other than the Company and the Company’s

members as a body, for our audit work, for this report, or for

the opinions we have formed.

Peter Smith (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, UK

14 June 2023

BDO LLP is a limited liability partnership registered in

England and Wales (with registered number OC305127).

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE BIOTECH GROWTH TRUST PLC CONTINUED

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2023

Notes

Revenue

£’000

2023

Capital

£’000

Total

£’000

Revenue

£’000

2022

Capital

£’000

Total

£’000

Investment income 2 310 – 310 1,084 – 1,084

Losses on investments held at fair value



8 – (32,727) (32,727) – (206,032) (206,032)

Foreign exchange losses – (3,759) (3,759) – (2,340) (2,340)

AIFM, Portfolio management and performance

fees

3 (176) (3,355) (3,531) (237) 6,232 5,995

Other expenses 4 (692) (51) (743) (678) (124) (802)

 (558) (39,892) (40,450) 169 (202,264) (202,095)

Finance costs 5 (40) (752) (792) (9) (166) (175)

 (598) (40,644) (41,242) 160 (202,430) (202,270)

Taxation 6 (56) – (56) (149) – (149)

 (654) (40,644) (41,298) 11 (202,430) (202,419)

 7 (1.6)p (100.9)p (102.5)p 0.0p (488.5)p (488.5)p



for the year” is 

Comprehensive Income has been presented.







Investment Companies.

The accompanying notes from page 77 to page 94 are an integral part of this statement.

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2023

Notes

2023

£’000

2022

£’000



 8 357,229 427,399



Other receivables 10 508 49

 2,772 –

3,280 49

 360,509 427,448



Other payables 11 8,846 1,499

Loan 14 20,170 31,741

 8, 9 1,202 –

30,218 33,240

 330,291 394,208



Ordinary share capital 12 9,684 10,289

 79,951 79,951

Capital redemption reserve 13,746 13,141

Capital reserve 16 227,968 291,231

 (1,058) (404)

 330,291 394,208

 13 852.6p 957.8p

The nancial statements on pages 73 to 94 were approved by the Board on 14 June 2023 and were signed on its behalf by:

Roger Yates

Chairman

The accompanying notes from page 77 to page 94 are an integral part of this statement.



FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2023

Notes







£’000



premium



£’000

Capital



reserve

£’000

Capital

reserve

£’000

Revenue

reserve

£’000

Total

£’000

At 1 April 2022

10,289 79,951 13,141 291,231 (404) 394,208



– – – (40,644) (654) (41,298)



(605) – 605

(22,619) –

(22,619)

At 31 March 2023 13

9,684 79,951 13,746 227,968 (1,058) 330,291

FOR THE YEAR ENDED 31 MARCH 2022

Notes







£’000



premium



£’000

Capital



reserve

£’000

Capital

reserve

£’000

Revenue

reserve

£’000

Total

£’000

At 1 April 2021

10,396 77,895 12,997 500,594 (415) 601,467



– – – (202,430) 11 (202,419)

Issue of new shares 12

37 2,060 –

– – 2,097

Cost of share issuance

– (4) –

– – (4)



(144) – 144

(6,933) –

(6,933)

At 31 March 2022 13

10,289 79,951 13,141 291,231 (404) 394,208

The accompanying notes from page 77 to page 94 are an integral part of this statement.

6 on page 94 for details of the amounts of reserves available for distribution.

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2023

Notes

2023

£’000

2022

£’000



Loss before taxation* (41,242) (202,270)

Finance costs 792 175

 8 30,945 204,987

Transaction costs** – 1,045

Foreign exchange losses 3,759 2,340

Decrease/(increase) in other receivables 28 (14)

Decrease in other payables (116) (18,255)

Taxation paid 6 (56) (149)

 (5,890) (12,141)



Purchases of investments and derivatives (459,606) (439,160)

 505,300 453,237

Transaction costs** – (1,045)

 45,694 13,032



Gross proceeds from the issue of shares – 2,097

Cost of share issuance – (4)

 (20,910) (6,933)

Finance costs – interest paid (792) (175)

 (repayment)/drawdown of the loan facility (15,330) 2,622

 (37,032) (2,393)

 2,772 (1,502)

 – 1,502



†

2,772 –

* Includes dividends earned during the year of £283,000 (2022: £1,027,000) bond income of £nil (2022: £37,000) and deposit interest of £11,000 (2022: £3,000).

** In the current year, transaction costs have been disclosed as operating activities, hence it is zero compared to the prior year.

† Collateral cash h (2022: £nil).

CHANGES IN NET DEBT ARISING FROM FINANCING ACTIVITIES

2023

£’000

2022

£’000

Balance as at 1 April 31,741 26,779

 (15,330) 2,622

Foreign exchange losses 3,759 2,340

Loan balance at 31 March 20,170 31,741

The accompanying notes from page 71 to page 94 are an integral part of this statement.

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

NOTES TO THE FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES

(A) BASIS OF PREPARATION



































Judgements and key sources of estimation and uncertainty



SF







Fair value of the unquoted investments estimate











 























FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

1. ACCOUNTING POLICIES continued

(B) INVESTMENTS











































(D) INVESTMENT INCOME























(E) EXPENSES AND FINANCE COSTS



 

 



  



  



NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

1. ACCOUNTING POLICIES continued

  





 

(F) TAXATION

































(G) FUNCTIONAL AND PRESENTATION CURRENCY





 

 





 





(H) FOREIGN CURRENCIES











NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

1. ACCOUNTING POLICIES continued

(I) RESERVES

Ordinary share capital

• 

Share premium account

• 



Capital redemption reserve

• 



Capital reserves



 

 

 

 

 



Revenue reserve

• 



(J) CASH AND CASH EQUIVALENTS







(K) OTHER RECEIVABLES AND OTHER PAYABLES





(L) LOAN

















NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

1. ACCOUNTING POLICIES continued

(M) OPERATING SEGMENTS









(N) FINANCIAL INSTRUMENTS INCLUDING DERIVATIVE FINANCIAL INSTRUMENTS

SF















(O) ADOPTION OF NEW AND REVISED STANDARDS

Standards and amendments to existing standards effective 1 January 2022





 





New standards, amendments and interpretations effective after 1 January 2023 which have not been early

adopted







 

 

 



NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

2. INCOME

2023

£’000

2022

£’000

Investment income

  

 – 

Other income

  

  

  

3. AIFM, PORTFOLIO MANAGEMENT AND PERFORMANCE FEES

Revenue

£’000

Capital

£’000

2023

Total

£’000

Revenue

£’000

Capital

£’000

2022

Total

£’000



  

  



  

  

  –

– –

–  

  

  

 









NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

4. OTHER EXPENSES

2023

Total

£’000

2022

Total

£’000













 – 











 





























7



Total expenses charged to Revenue

692

678







Total expenses

743

802









5. FINANCE COSTS

Revenue

£’000

Capital

£’000

2023

Total

£’000

Revenue

£’000

Capital

£’000

2022

Total

£’000



  

  

  

  

6. TAXATION

(A) ANALYSIS OF CHARGE IN THE YEAR:

Revenue

£’000

Capital

£’000

2023

Total

£’000

Revenue

£’000

Capital

£’000

2022

Total

£’000





–



 – 

 

–



– – –





–



 – 





NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

6. TAXATION continued

(B) FACTORS AFFECTING TOTAL TAX CHARGE FOR YEAR







Revenue

£’000

Capital

£’000

2023

Total

£’000

Revenue

£’000

Capital

£’000

2022

Total

£’000

   

  

   

  



 –  

–  

  – 

 – 

  – 

 – 

   

  

  – 

– – –

  – 

 – 







7



7









7. BASIC AND DILUTED (LOSS)/EARNINGS PER SHARE

Revenue

pence

Capital

pence

2023

Total

pence

Revenue

pence

Capital

pence

2022

Total

pence

      





NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

7. BASIC AND DILUTED EARNINGS/(LOSS) PER SHARE continued













8. INVESTMENTS





2023 2022

Quoted

Investments

£’000

Unquoted

£’000

Derivative

Financial

Instruments

– Net

£’000

Total

£’000

Quoted

Investments

£’000

Unquoted

£’000

Derivative

Financial

Instruments

– Net

£’000

Total

£’000



  – 

  – 





  – 

   



  – 

   



  – – 

  – 

  – – 

   



  – –

  –

–





   

   





   

  – 





  – 

  – 







   

  – 





   

  – 

 The







NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

8. INVESTMENTS continued

GAINS ON INVESTMENTS

2023

£’000

2022

£’000



























9. DERIVATIVE FINANCIAL INSTRUMENTS

2023

£’000

2022

£’000

 – –





–



–



10. OTHER RECEIVABLES

2023

£’000

2022

£’000

  –











11. OTHER PAYABLES

2023

£’000

2022

£’000











–











NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

12. ORDINARY SHARE CAPITAL

2023

Number of

2022

Number of









– 



 



 

 





2023

£’000

2022

£’000

  

13. NET ASSET VALUE PER SHARE

2023 2022











14. RISK MANAGEMENT POLICIES AND PROCEDURES



















OTC EQUITY SWAPS









NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

14. RISK MANAGEMENT POLICIES AND PROCEDURES continued

1. MARKET PRICE RISK:













(a) Foreign currency risk:





Management of the risk









Foreign currency exposure





Foreign currency sensitivity







2023

£’000

2022

£’000



 



 



 

–

 



 



 



  













NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

14. RISK MANAGEMENT POLICIES AND PROCEDURES continued





2023

£’000

2022

£’000

 – –

















2023

£’000

2022

£’000

 – –













(b) Interest rate risk:





Interest rate exposure







Fixed

rate

2023

£’000

Floating

rate

2023

£’000

Floating

rate

2022

£’000



– 



e

– 

–



– 





– 

–



– 



Management of the risk



Interest rate sensitivity







NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

14. RISK MANAGEMENT POLICIES AND PROCEDURES continued













Other price risk exposure

2023 2022

Assets

£’000

Liabilities

£’000

Notional

exposure*

£’000

Assets

£’000

Liabilities

£’000

Notional

exposure*

£’000



 – 

 – 

e

–  

– – –

  

 – 



2. LIQUIDITY RISK:



Management of the risk

















Liquidity exposure and maturity





2023

3 months

or less

£’000

2023

3 to

12 months

£’000

2022

3 months

or less

£’000

2022

3 to

12 months

£’000





–  –





–  –



–

– – –



–

 – –





–  –

   –

NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

14. RISK MANAGEMENT POLICIES AND PROCEDURES continued

3. CREDIT RISK:



















Management of the risk



J.P. Morgan

 

 



 

Other counterparties

 



 

 







4. FAIR VALUE MEASUREMENT

Hierarchy of investments







 

 



 

As of 31 March 2023

Level 1

£’000

Level 2

£’000

Level 3

£’000

Total

£’000



 –  

 –  – 

    

NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

14. RISK MANAGEMENT POLICIES AND PROCEDURES continued

As at 31 March 2022

Level 1

£’000

Level 2

£’000

Level 3

£’000

Total

£’000



   



   













 











 

 





Probability of Scenario







2023 Probability of scenario 5%-35%

Weighted average probability of scenario 20%

  

 

Expected time to date of sale or realisation opportunity







2023 Expected time to sale or realisation opportunity 1-2.5 years

Weighted average expected time to sale or realisation opportunity 1.75 years

  

 

NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

14. RISK MANAGEMENT POLICIES AND PROCEDURES continued

Discount rate









2023 Discount rate 22.5%

Discount rate weighted average 22.5%

  

 

Level 3 Reconciliation





2023

£’000

2022

£’000











–



 –



 



 



 









FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES:





5. CAPITAL MANAGEMENT



 

 







S









NOTES TO THE FINANCIAL STATEMENTS 

FINANCIAL STATEMENTS

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

15. TRANSACTIONS WITH RELATED PARTIES AND THE MANAGERS

Related Parties

• 





Transactions with the Managers

 

 











 77







16. CAPITAL RESERVE

2023

2022

Capital Reserves Capital Reserves

Other

£’000

Investment

holdings

gains/

(losses)

£’000

Total

£’000

Other

£’000

Investment

holdings

gains/

(losses)

£’000

Total

£’000



  

  

   

  

  – 

 – 

  – 

 – 

  – 

 – 

   

  





17. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS



NOTES TO THE FINANCIAL STATEMENTS 

FURTHER INFORMATION

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

FINANCIAL CALENDAR

31 March Financial Year End

June Final Results Announced

July Annual General Meeting

30 September Half Year End

November Half Year Results Announced

ANNUAL GENERAL MEETING

The Annual General Meeting of The Biotech Growth Trust PLC will be held at the Saddlers’ Hall, 40 Gutter Lane, London

2 for details of



SHARE PRICES





CHANGE OF ADDRESS





DAILY NET ASSET VALUE

The daily net asset value of the Company’s shares can be obtained on the Company’s website at  and is



PROFILE OF THE COMPANY’S OWNERSHIP

% OF ORDINARY SHARES HELD AT 31 MARCH



 



 



 





 



 





 



 



 



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 



 



 



 





 





 



 



 



SHAREHOLDER INFORMATION

FURTHER INFORMATION

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

ACTIVE SHARE

Active Share is expressed as a percentage and shows the extent to which a fund’s holdings and their weightings differ from





ADR

An American depositary receipt (ADR) is a negotiable security that represents securities of a foreign company and allows that





AIC



ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE (AIFMD)

Agreed by the European Parliament and the Council of the European Union and transposed into UK legislation, the AIFMD



them to appoint an Alternative Investment Fund Manager (AIFM) and depositary to manage and oversee the operations of





ALTERNATIVE PERFORMANCE MEASURE (APM)





Alternative Performance Measures, the Directors considered the key objectives and expectations of typical investors in an



DISCOUNT OR PREMIUM^



premium is calculated by subtracting the share price from the net asset value per share and is usually expressed as a





pages

As at 31

March 2023

(pence)

As at 31

March 2022

(pence)

Share price



 

Net asset value per share (see note 13 on page  for further information)



 

Discount of share price to net asset value per share



 

GLOSSARY OF TERMS AND ALTERNATIVE

PERFORMANCE MEASURES

^ Alternative Performance Measure

FURTHER INFORMATION

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

GEARING^

Gearing represents prior charges, adjusted for net current liabilities, expressed as a percentage of net assets (AIC

methodology)

pages

31 March

2023

£’000

31 March

2022

£’000

Loan



 

Net current liabilities (excluding loan and derivatives)* –

 

–

 

Net assets 

1 

Gearing



 

*current liabilities less current assets

IPO

An Initial Public Offering (“IPO”) is the process by which the shares of a previously private company are listed on a stock





IPO LOCK-IN

When a company offers shares in an IPO



LEVERAGE







For the purposes of the AIFMD, leverage is any method which increases the Company’s exposure, including the borrowing





Company’s positions after the deduction of sterling cash balances, without taking into account any hedging and netting





Gross

Method

Commitment

Method

Maximum limit

 

Actual as at 31 March 2023

 

MARGINABLE SECURITIES

Marginable securities are stocks, bonds, futures or other securities capable of being traded on a Margin Account and are



NET ASSET VALUE (NAV)

The net asset value of the Company’s assets, principally investments made in other companies and cash held, less any

“shareholders’ funds”

,





GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES CONTINUED



^ Alternative Performance Measure

FURTHER INFORMATION

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

NET ASSET VALUE PER SHARE TOTAL RETURN^

The net asset value per share return for the year ended 31 March 2023 is calculated by taking the percentage movement

from the net asset value per share as at 31 March 2022 of per share at

3 of in respect of the above

mentioned years (see pages 

ONGOING CHARGES^

Ongoing charges are calculated by taking the Company’s annualised operating expenses expressed as a proportion of the



The costs of buying and selling investments are excluded, as are interest costs, taxation, performance fees, cost of buying



pages

31 March

2023

£’000

31 March

2022

£’000

AIFM & portfolio management fees (note 3)



31 



  

Total ongoing charges

4,223 5,412

Average daily net assets for the year

 

Ongoing charges

  

OTC EQUITY SWAPS















 

exception of additional counterparty risk and not possessing voting rights in the underlying security; and

 





REHYPOTHECATION

Rehypothecation is the practice by banks and brokers of using collateral posted as security for loans as regulated by the



GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES CONTINUED

FURTHER INFORMATION

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

SUSTAINABILITY ACCOUNTING STANDARDS BOARD (SASB)









SHARE PRICE TOTAL RETURN^







shareholders in respect of 

See pages 1 and 

^ Alternative Performance Measure

VARIABLE INTEREST ENTITY (VIE)

A corporate structure through which an investor can own the economic interests of shares in a company through a



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100

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

HOW TO INVEST

RETAIL INVESTORS ADVISED BY IFAS

The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers

(“IFAs”) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (“FCA”) rules in relationship





INVESTMENT PLATFORMS

The Company’s shares are traded openly on the London Stock Exchange and can be purchased through a stock broker



ISAs, Junior ISAs and SIPPs) which facilitate both regular monthly investments and lump sum investments in the





 

 

 

 

 

 

 

 

 

 

 

FURTHER INFORMATION

101

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

Notice is hereby given that the Annual General Meeting of The Biotech Growth Trust PLC will be held at the Saddlers’ Hall, 40



ORDINARY RESOLUTIONS



 

 

  of the Annual Report for the year ended



 

 

 

 

 

 

 

of the next Annual General Meeting at which accounts are laid, and to authorise the Audit Committee to determine their



INVESTMENT POLICY

amended investment policy set out on page  of the Annual Report for the year ended 31 March 2023, a copy



hereby approved and adopted as the investment policy of the Company in substitution for, and to the exclusion of, all



AUTHORITY TO ALLOT SHARES

 







resolution is proposed) and representing  

of the issued share capital of the Company at the date at which this resolution is passed, on such terms as the Board may

determine, provided that this authority shall expire at the conclusion of the Annual General Meeting of the Company to



varied or renewed, by the Company in general meeting and provided that the Company shall be entitled to make, prior to



expiry and the Directors may allot relevant securities pursuant to such offer or agreement as if the authority conferred by



SPECIAL RESOLUTIONS



DISAPPLICATION OF PRE-EMPTION RIGHTS

 





12 set out in the notice





NOTICE OF THE ANNUAL GENERAL MEETING

FURTHER INFORMATION

102

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023





  



proportionate (as nearly as may be) to the respective numbers of Shares held by them but subject to such

exclusions or other arrangements in connection with the issue as the Directors may consider necessary,

appropriate, or exp



any other matter whatsoever; and

   (or, if



which this resolution is passed),

and expires at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or



by the Company in general meeting and provided that the Company shall be entitled to make, prior to the expiry of such





AUTHORITY TO REPURCHASE ORDINARY SHARES

 







(a) the maximum aggregate number of Shares authorised to be purchased shall be that number of Shares which is



  

  





purchased and (ii) the higher of the price of the last independent trade in Shares and the highest then current

independent bid for Shares on the London Stock Exchange;

(d) the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to be



authority is renewed prior to such time; and

(e) the Company may make a contract to purchase Shares under this authority before the expiry of such authority

which will or may be executed wholly or partly after the expiration of such authority, and may make a purchase of

Shares in pursuance of any 

GENERAL MEETINGS

 rs be authorised to call general meetings (other than Annual General Meetings) on not less than 14

clear days’ notice, such authority to expire at the conclusion of the next Annual General Meeting of the Company or, if

earlier, until expir

 

One Wood Street

Frostrow Capital LLP  

Company Secretary

14 June 2023

NOTICE OF THE ANNUAL GENERAL MEETING CONTINUED

FURTHER INFORMATION

103

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

NOTES

 

may appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached to a different share or



 





 

Group at  or, in the case of CREST members, utilising the CREST electronic proxy appointment service in accordance

with the procedures set out below, alternatively if you are an institutional shareholder you may also be able to appoint a proxy electronically via the proximity

platform



 





 



 

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 



 

“Register of Members”) at the close of business on  2023 (or, in the event of any adjournment, on the date which is two days before the time of the





 13 June 2023 (being the last business day prior to the publication of this notice) the Company’s issued share capital consists of  ordinary

13 June 2023 are 

 





 





proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the



the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the issuer’s agent is able to retrieve the





 





or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to



their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the



 



 If you are an institutional investor you may also be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed









electronic proxy appointment via the Proxymity platform may be revoked completely by sending an authenticated message via the platform instructing the



1 





1 

for receipt of proxy appointments (see above) also applies in relation to amended instructions; any amended proxy appointment received after the relevant



1 







1 



1 



 







NOTICE OF THE ANNUAL GENERAL MEETING CONTINUED

FURTHER INFORMATION

104

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

Resolution 1 – Audited Financial Statements and the Report of the Directors





Resolution 2 and 3 – Remuneration Report and Remuneration Policy

The Report on Directors’ Remuneration is set out in full on pages  to 

Resolutions 4 to 9 – Re-election of Directors



pages  to 



Resolution 10 – Re-appointment of Auditor





Resolution 11 – Investment Policy

As explained in the Chairman’s Statement beginning on page 2 and the Business Review beginning on page , the Board is

proposing to make some changes to the investment policy, principally in order to clarify the scope of the use of swaps and



– ’s loan facility as this is not considered to be a policy

matter;

– 

an aggregate

transaction; and

– Remove the current limit onaggregate net counterparty exposure through a

of



A blacklined statement showing the proposed amendments to the Investment Policy is set out on page  which forms part



Resolutions 12 and 13 – Issue of Shares

Ordinary Resolution 12 in the Notice of Annual General Meeting will renew the authority to allot the unissued share capital up

 

share capital on 14 June 2023 or, if lower















14 June 2023 or, if changed, the number









EXPLANATORY NOTES TO THE RESOLUTIONS

FURTHER INFORMATION

105

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023











Resolution 14 – Share Repurchases







to the 

This authority, if conferred, will only be exercised if to do so would result in an increase in the net asset value per share for the







Under the current Listing Rules, the maximum price that may be paid on the exercise of this authority must not exceed the



preceding the date of purchase and (ii) the higher of the last independent trade and the highest current independent bid on





Special Resolution 14 in the Notice of Annual General Meeting will renew the authority to purchase in the market a maximum

 

Notice)





Resolution 15 – General Meetings





Recommendation



Accordingly, the Board unanimously recommends to the shareholders that they vote in favour of the above resolutions to be



totalling 

EXPLANATORY NOTES TO THE RESOLUTIONS CONTINUED

FURTHER INFORMATION

106

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

EXPLANATORY NOTES TO THE RESOLUTIONS CONTINUED

AMENDED INVESTMENT POLICY

The Company seeks capital appreciation through investment in the worldwide biotechnology industry.



biotechnology companies on a worldwide basis.



– 

investment companies (including investment trusts) listed on the London Stock Exchange, except where the investment



ended investment companies (including investment trusts) listed on the London Stock Exchange.

– 

investment companies (including investment trusts) listed on the London Stock Exchange.

– 



– 





– 



–  Company’s net

assets. 

 Any loancan 

 



– The Company may be unable either to invest directly  in certain countries or share classes. In these

circumstances, the Company may gain exposure in such countries

by investing indirectly through swaps or other

. Exposure to underlying investments thus obtained will count

towards and be subject to the investment limits set out above. Further, where the Company invests in

via swaps or

exposure

.



– 





• 

restricted to an aggregate 

relevant transaction;

• aggregate net counterparty exposure

(as set out in the previous bullet point) 



FURTHER INFORMATION

107

THE BIOTECH GROWTH TRUST PLC Annual Report for the year ended 31 March 2023

DIRECTORS

Roger Yates (Chairman)

Steve Bates (Chairman of the Management

Engagement Committee)

Julia Le Blan (Chair of the Audit Committee)

Geoff Hsu

Dr Nicki Shepherd

The Rt Hon Lord Willetts FRS

REGISTERED OFFICE

One Wood Street



WEBSITE



COMPANY REGISTRATION NUMBER











ALTERNATIVE INVESTMENT FUND MANAGER,

COMPANY SECRETARY AND ADMINISTRATOR

Frostrow Capital LLP



London WC2A 1AL











like to receive a copy of the Company’s monthly fact sheet





PORTFOLIO MANAGER

OrbiMed Capital LLC



New York NY10022 USA





Registered under the U.S. Securities and Exchange

Commission.

INDEPENDENT AUDITOR

BDO LLP



London 

DEPOSITARY







CUSTODIAN AND PRIME BROKER



Suite 1, Metro Tech Roadway

Brooklyn, NY11201

USA

REGISTRAR

Link Group

10th Floor





Leeds LS1 4DL

shareholder













STOCK BROKER

Winterflood Securities Limited

The Atrium Building

Cannon Bridge



London EC4R 2GA

SOLICITORS

Charles Russell Speechlys





IDENTIFICATION CODES

  

   

  

   

GLOBAL INTERMEDIARY IDENTIFICATION NUMBER



LEGAL ENTITY IDENTIFIER (LEI)

