Hit 8 mergers and acquisitions and defeat 92% of competitors, IBT bets on the patent cliff to continue the global wave of biotechnology mergers.

Global biotechnology mergers and acquisitions are showing signs of revival and accelerating. The International Biotechnology Trust (IBT), listed in London and managed by Schroders Global Group, has gained attention for repeatedly hitting acquisition targets - data shows that the fund's net asset value return rate for the past year as of the end of September was 27%, outperforming 92% of similar funds; as of the end of September, the net assets were approximately 285 million pounds (3.81 billion US dollars), with a portfolio covering around 90 stocks, with rare diseases accounting for close to one third. It is understood that last week Novo Nordisk A/S Sponsored ADR Class B (NVO.US) announced the acquisition of liver disease drug company Akero Therapeutics (AKRO.US), one of the top ten holdings of IBT, becoming the 33rd acquisition since 2020 and the 8th in 2025. Other companies acquired this year include Intra-Cellular Therapies, SpringWorks Therapeutics, etc. According to statistics, the entire industry has announced over 400 biotechnology and pharmaceutical transactions with a total value of approximately $111 billion from the beginning of the year to now, exceeding the full year figure of $71 billion last year. In addition, the "patent cliff" facing large pharmaceutical companies is the main driver of mergers and acquisitions. According to industry research estimates, from 2024 to 2030, pharmaceutical companies in the US and Europe will face competition from generic drugs as patents worth over $360 billion in sales expire each year. Ailsa Craig, portfolio manager of IBT, states that pharmaceutical companies prefer to acquire products with low clinical risk, already on the market, and are about to be launched. She emphasizes that the current number and value of biotechnology acquisitions have not yet reached the level needed by large pharmaceutical companies to maintain revenue growth, and the upcoming patent expiry spree will force companies to achieve growth through multimillion-dollar transactions. At the same time, Needham's statistics show that since 2018, in 155 listed biotech company acquisitions, over 70% of the targets have late-stage assets in research, and 44% already have commercialized products. Liver disease company Madrigal Pharmaceuticals (MDGL.US), rare disease company Avidity Biosciences (RNA.US), and Insmed (INSM.US) are all considered potential targets in IBT's portfolio; Insmed's stock price has already doubled this year due to FDA approval of its drug Brinsupri for rare lung disease treatment. On a macro level, trade war fluctuations in the first half of 2025 made the M&A market cautious, but the announcement of transactions surged in August, with global M&A exceeding $1 trillion. The Nasdaq Biotechnology Index has risen 18% this year, reaching near four-year highs, and expectations for further Fed interest rate cuts have further boosted sentiment. Craig and co-manager Marek Poszepczynski believe that pharmaceutical companies are more inclined to "bolt-on" acquisitions rather than mega-mergers, and that internal integration alone will not solve the patent cliff problem. Despite the frequent mergers and acquisitions, Poszepczynski emphasizes, "We are not hunters of mergers and acquisitions, but we think about fundamentals like the business development departments of pharmaceutical companies." Even if portfolio companies are not eventually acquired, the fund remains optimistic about their long-term prospects.