International Biotechnology Trust (IBT) 31 Aug 2002 Page 12
ESCROW for a year following the acquisition of Netgenics. The effect of these discounts is to
reduce the valuation of quoted investments by £1.3m at 31 August 2002.
The biotech sector is strongly underpinned but a sustained series of positive news events is
needed for a broad-based recovery in the market. The nomination of an FDA commissioner is
positive, and should go someway to allay fears about the regulatory climate. However a lasting
improvement in confidence is likely to require strong clinical data as well as new product
approvals and successful launches of new blockbuster drugs. An increase in M&A activity and
further signings of large biotech collaborations may also help sentiment.
Valuations in the biotech sector are at an attractive level and it is a good time to be making
investments for the long term. However volatility looks set to continue and it is difficult to see
how the biotech market will stage a significant recovery without a pick up in the overall markets,
which will require a marked improvement in the macroeconomic picture.