International Biotechnology Trust (IBT) 22 sept 2003 Page 4
time of writing. This allows the performance of these companies to be closely monitored and
the input of strategic and financial advice drawing on the experience of the SVLS team and
their network of advisers, which include the IBT Scientific Advisory Board.
CONTINUATION VOTE
The Articles of Association of the Company contain provisions requiring the Directors to put a
proposal for the continuation of the Company to shareholders at the Annual General Meeting
in 2003 and thereafter at two yearly intervals.
In considering whether to recommend to Shareholders that the Company continue in
business as an investment trust, the Board of Directors has reviewed four particular aspects
of its business:
The prospects for the biotech sector
The prospects for the portfolio
The strength and depth of our management
The appropriateness of the investment trust structure
We consider the fundamentals of the biotech sector to be compelling and these are outlined
below and in the `Investment Advisers' Review'. Our adviser, SVLS, has assembled a
portfolio of quoted and unquoted, generally smaller, emerging biotech companies, which we
believe to be well positioned to benefit from the increase in interest in the sector, especially
the three unquoted companies that are potential IPO candidates. As I have said in previous
statements, I believe that we have a leading team of advisers in SVLS, with considerable
depth of skill, experience and resources. Finally, investment trusts, with their closed-end
structures and boards of independent directors, have proved to be an effective vehicle for
making long-term investments and we believe that this will continue to be the case.
For these reasons the Board of Directors is particularly excited about the prospects for your
Company. Recent soundings with major shareholders indicate strong support for the
Company to continue and the Directors intend to vote their 146,183 shares in favour of the
ordinary resolution to continue in business as an investment trust.
SHARE BUY-BACKS
At the Annual General Meeting held on 19 December 2002, the Directors were authorised to
purchase for cancellation up to 14.99% of the shares in issue. Since that time, the Directors
have utilised this authority to purchase a total of 800,000 shares for cancellation. We intend
to continue to consider opportunities to purchase shares for cancellation in appropriate
market conditions, at prices that would usefully enhance the net asset value for remaining
shareholders and with the intention of reducing discount volatility. A resolution to renew the
share buy-back authority is included in the notice of the Annual General Meeting.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held at 31 Gresham Street, London EC2V 7QA on 14
November 2003 at 3.00 p.m. A presentation will be made by Kate Bingham and other
members of the SVLS team.
OUTLOOK
Investor sentiment towards the biotech sector is currently very positive. At the time of writing,
although the biotech IPO window has yet to open, twelve biotech companies have filed to go
public in the US, and IBT has investments in three of these. We believe that our portfolio
companies, both quoted and unquoted, continue to make good overall progress and are
generally well financed.
