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China: The new player in Biotech
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The sky is the limit in emerging Biotech
Biotech – Invest in the science, not the macro-outlook
n recent years the biotech industry has grown significantly and despite the current challenges in the macroeconomic environment, the sector is well-positioned with new
technologies and performance that are less dependent on economic cycles.
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“Net zero commitments are set to revolutionise the world of long-dated real assets”
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BIOTECH INVESTING
Not for Retail distribution: This marketing communication is intended exclusively for Professional, Institutional or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly. This marketing communication does not constitute on the part of AXA Investment Managers a solicitation or investment, legal or tax advice. This material does not contain sufficient information to support an investment decision. Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. 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In particular units of the funds may not be offered, sold or delivered to U.S. Persons within the meaning of Regulation S of the U.S. Securities Act of 1933. The tax treatment relating to the holding, acquisition or disposal of shares or units in the fund depends on each investor’s tax status or treatment and may be subject to change. Any potential investor is strongly encouraged to seek advice from its own tax advisors. For more information on sustainability-related aspects please visit https://www.axa-im.com/what-is-sfdr. AXA Framlington Biotech Fund is a part of AXA Framlington Range of Authorised Unit Trust Schemes and is managed by AXA Investment Managers UK Limited, part of the AXA IM Group. The capital of the Fund is not guaranteed. The Fund is invested in financial markets and uses techniques and instruments which may be subject to sudden and significant variation, which may result in substantial gains or losses. 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In this Spotlight guide, we hear why the biotech sector presents investors with an opportunity not immediately influenced by the macroeconomic environment and why the best judge of performance is the quality of the science. We also explore the changing landscape as China becomes a new player in biotech.
The future looks bright
The outlook for the biotech industry looks positive as innovative technologies continue to drive performance
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Past performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested.
he growth of responsible and sustainable investing is changing the shape of the investment industry and could prove critical in
supporting the transition to a lower carbon and more socially just world.
For Professional Clients only
Additionally, we lift the curtain on exciting new opportunities in the sector that have the potential to reshape treatments across some of the most pressing healthcare challenges we face. We hear how AXA IM fund managers approach picking biotech disruptors while seeking to provide long term capital growth.
In depth Q&A: How AXA IM picks Biotech disrupters
BY THE NUMBERS: THE INVESTMENT CASE FOR BIOTECH
For Professional investor use only, not suitable for a retail audience.
But does it need to watch its step?
Finally, we look deeper into the investment case for biotech, including the top-selling drugs, compelling names at the forefront of the sector, and where valuation stands.
SPOTLIGHT
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Managers, argues that the outlook for the biotech sector remains positive and should be viewed separately from the macro environment; in biotech, the best judge of performance is the quality of the science.
he macroeconomic outlook for investing is going through a period of uncertainty. Share prices across many sectors have fallen amid rising inflation and interest rates. However, Peter Hughes, Fund Manager at AXA Investment
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“These drugs tested in clinical trials, they don't care what the price of oil is, they don't care how much it costs to fill up at a gas station”
Biotech – invest in the science, not the macro-outlook
In a struggling macroeconomic environment the biotech sector presents investors with an opportunity to invest in businesses resilient to market forces
He says: “Over the last 5 years, we had more drugs approved than in any other 5-year period in the US. I think there's been an acceleration of innovation and drug approvals.”
He explains that from an investment perspective at AXA they don’t change their cost of capital assumptions through an economic cycle. They feel the same level of comfort with the stocks they bought a year ago as they do today.
“The move to quantify everything could really be dangerous if it ends up removing that human layer of judgment”
who has lived with a teenager knows that fast maturation comes with challenges and a few wrong turns.
he world needs responsible and sustainable investing to mature and grow so that it can drive beneficial change more quickly. But anyone
Researching reality
Fox thinks there is a danger that numbers will take priority over more subtle word-based judgements. “Words are inconvenient because they're unstructured – you can't spreadsheet them and they can mean different things,” he says. “If you're trying to come up with a low-cost, scalable solution, words are a nightmare – you just want a set of data to crunch and create a sustainable portfolio around.”
Recent legislation in the UK mandates pension trustees evaluate and report on climate risks and opportunities. It is likely that pension schemes with over £5bn in assets will have to report in line with the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) from October 2021. This is particularly pertinent when it comes to real assets, with the long-term investment commitments easily lasting until 2030 and beyond.
Hughes says: “These drugs tested in clinical trials, they don't care what the price of oil is, they don't care how much it costs to fill up at a gas station. The trials will either work or they won’t, and they won't necessarily be influenced by the macro environment.”
Hughes also argues that the exciting outlook for the biotech industry is fuelled by hundreds of innovative projects that could see a strong performance. He explains that new technologies like mRNA that underpin the first Covid vaccines are ready to disrupt and accelerate product development in many other areas of biotech.
Beyond Covid
Despite having over $1trn of assets under management, Wellington remains a private partnership. It isn’t owned by an investment bank or an insurance firm, and only does asset management. Kooy-Henckel believes this allows it to take a very long-term investment horizon, which is particularly important when it comes to sustainable investing.
“We can engage with companies over the long term to positively influence them, and our portfolio managers have a time horizon where they can be much better aligned with the capital allocation perspectives of the companies or the issuers that they invest in.”
To complement this bottom-up approach, there is a strong emphasis on collaboration. Each team brings its own particular focus or expertise and shares it across the firm. “We can have growth investors talking to value investors, for example,” says Kooy-Henckel. “We can have a sustainable-thematic portfolio manager speaking to a growth portfolio manager to see how that fits in with their approach. And our climate research can feed into any of our portfolios.”
But Wellington’s focus on sustainable investment isn’t an evangelical endeavour. The firm is responding to and anticipating demand, with investors increasingly focusing not just on climate but also on sustainability more broadly. “There is really strong momentum to implement more sustainability across their portfolios and I think a strong recognition that this is making their investments more resilient to climate and other sustainability-related risks.”
This momentum is reflected in the changing conversations Wellington is having. Where before many of the key concepts were new, now the emphasis has shifted to due diligence.
In recent years, the biotech industry has grown significantly in its profile. Before the Covid-19 pandemic, the average investor would likely be unable to name a biotech company. Today Moderna is a household name and organisations such as BioNTech have grown in public awareness. During the pandemic, this growth in familiarity contributed to spikes in performance for biotech indices.
Growing Awareness
Hughes says: “To save 20 million lives within a year is an unprecedented achievement. Covid highlighted the groundwork put in place over the last couple of decades within biotech to build an industry that can respond very quickly and with the right attitude.”
However, despite biotech's achievements during the pandemic, as society has reopened, investor interest has shifted to industries offering more immediate returns. Hughes sees this fall in interest as a significant long-term investment opportunity for a sector whose underlying performance is less dependent on the macroeconomic outlook.
Crucially, the most important variables to consider when investing in biotech companies include management quality and the science adopted. Hughes highlights that drug development spans several stages and years, requiring the company to transition into a commercial operation. Ensuring there is a strong management team in place to help make the appropriate decisions is more important to the success of a company than the macro-economic outlook.
“There's been an acceleration of innovation and drug approvals”
He also emphasises that when new technologies such as the enhanced use of antibodies in the brain, cell therapy and gene editing are approved, the number of profitable biotech companies will likely grow. In fact, with ageing populations and rising global obesity levels, the necessity for more sustainable healthcare spending will only drive further investment into the sector.
The emergence of China as the second largest market in the world for pharma and biotech also presents further room for growth in the sector. While geopolitics might present some hurdles to overcome, there is great potential for organisations to partner in delivering innovative products to Asian markets.
Despite the challenging macro-economic climate, the biotech sector is well-positioned with exciting new technologies and performance that is less dependent on economic cycles.
Hughes concludes: “We are buying what we think is the best science and the best management teams to drive that science forward. We think that is the best approach to investing”.
Not for Retail distribution: This marketing communication is intended exclusively for Professional, Institutional or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly. This marketing communication does not constitute on the part of AXA Investment Managers a solicitation or investment, legal or tax advice. This material does not contain sufficient information to support an investment decision.
The sky is the limit in emerging biotech
Emerging technologies and advancements in existing cancer and neurodegeneration treatments are bringing new opportunities to the biotech sector
Linden Thomson, Lead Fund Manager at AXA Investment Managers, explores several exciting emerging technologies that can reshape treatments across the healthcare sector.
“We have come a long way in cancer treatment and are still only halfway there”
That dual objective – generating returns and also delivering a positive change – is the same both for the equity and for the fixed income fund.
Safety and security
Education and job training
Digital divide
Alternative energy
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Financial inclusion
We spend a lot of time on the fixed income side interrogating issuers as to how we can be sure the capital is going to the right place. For example, last year Italy issued a green sovereign bond. We were initially very concerned to know exactly how the proceeds were going to be used. In our dialogue with the debt office, they agreed to have an independent assessor track the use of proceeds, which gave us the comfort we needed to invest in that bond. As a large, fixed income investor, we feel that we have a great opportunity to work with the sell-side community and share best practices on issuance within the sustainable debt world.
“Once an investment is made, a constant process of engagement and improvement is necessary to ensure assets meet rigorous criteria”
Capital at risk. For professional investors only. Not suitable for retail audience.
barrier to investors understanding the opportunities in the sector.
nnovation is the lifeblood of the biotech sector. Without innovation, the sector cannot develop new treatments to address the long list of diseases impacting society. But with innovation comes complexity, and its lack of familiarity can act as a
One area that is unsurprisingly seeing a lot of research and development is cancer. Genome sequencing has historically been costly but is becoming cheaper and more accessible, opening the door to the development of treatment that focuses on the specific genetics of the cancer rather than relying on chemotherapy. With these advances, the next natural step for cancer treatment is to detect potential cancer in patients in remission and eventually detecting early stage cancer in otherwise healthy people through a simple blood test, vastly expanding the use of genomics in oncology.
Next step in cancer treatment
Thomson says: “We have come a long way in cancer treatment and are still only halfway there. It remains a hugely important part of biotherapeutics in terms of innovation that looks at immunotherapies, targeted therapies, and beyond.”
Another area of treatment primed for growth is neurodegeneration. Ageing populations will increase the number of expected neurological diseases – such as Alzheimer’s and other forms of dementia – over the next 50 years. Yet, while the need for treatment in these areas will increase, developments in neurodegeneration still lag considerably behind other diseases such as cancer, which puts it in a position ripe for investment.
When compared to oncology our understanding of the genetic basis or underlying biology for some of the most common neurological conditions is nascent which has hampered development of targeted therapy. Further, traditionally neurology clinical trials have been higher risk than for other therapeutic categories.
Neurodegeneration
Thomson explains that multiple US firms are due to report phase-three data for amyloid beta targeting agents used to combat Alzheimers disease, which could act as a catalyst for the sector. She emphasises how the perceived willingness of the regulator to approve drugs addressing neurodegeneration will encourage more firms to develop treatments.
From a neurology perspective, greater attention is also being paid to diseases such as schizophrenia, psychosis and epilepsy with drugs in development offering the potential for new ways to treat these conditions. Very recently we have seen some compelling late stage clinical data in schizophrenia and we’re expecting more clinical data over the next couple of years.
The other side of innovation in the biotech sector is in the technology underpinning drug development. The mRNA technology that was used to develop the Covid-19 vaccine in record time has scope to be used in the development of other vaccines as well as other areas. This includes potentially combatting the flu and even treating cancer.
Thomson highlights that cell and gene therapy is also becoming more prominent in treatment and enables the direct insertion of a healthy gene to replace a mutated gene causing a specific disease. She says: “Gene therapy so far has focused on rarer diseases, and I think the next step forward is probably in the larger diseases like haemophilia. That's where the next catalyst will come from.”
Emphasising the pace of the innovation, Thomson highlights how biotech industries operated at a speed during the pandemic, surpassing established pharmaceutical companies. This showed that biotech innovations aren’t decades into the future; they are very much a reality.
Future drug development
When asked about the potential of the sector, she says: “The sky is the limit.”
“Gene therapy so far has focused on rarer diseases, and the next step forward is probably in the larger diseases like haemophilia”
rising inflation and interest rates. However, Peter Hughes, Fund Manager at AXA Investment Managers, argues that the outlook for the biotech sector remains positive and should be viewed separately from the macro environment; in biotech, the best judge of performance is the quality of the science.
he macroeconomic outlook for investing is going through a period of uncertainty. Share prices across many sectors have fallen amid
China: The new player in biotech
As global trends of ageing populations and lifestyle changes begin to become a reality, China has developed its biotech sector and become a new player in the world of innovative healthcare
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From a private funding perspective, there has also been a significant increase in investment. The number of financing deals and total capital raised reached a record high in 2020.
In recent years the Chinese government have also implemented a series of reforms that have placed greater emphasis on biotech research and development capabilities, encouraging innovative therapy development and shortening the approval timelines for important treatments.
“It's still early days, but over the next 10 years, Chinese biotech is positioned for its next big step”
“Return profiles may vary but all the approaches are looking to outperform their markets”
That doesn't mean that we never divest if at some point we're not seeing progress. We've divested companies that weren't embracing a robust climate strategy that we thought was appropriate for their business and their risks, or that weren’t managing and allocating capital in a way that seemed responsible or sustainable. We hold companies to account on material topics that we believe will differentiate leaders over time, like supply-chain oversight, including sustainable sourcing and fair labour practices.
Microsoft absolutely stands out for their approach to net zero. They have committed not only to mitigating their current carbon footprint but to removing all the carbon they have emitted into the atmosphere all the way back to their founding in 1975. That's a very noble agenda. They integrate this strategy in their own operations and also work very closely with their suppliers to ensure that their entire supply chain improves its carbon footprint as well.
as the rest of the world. Cinney Zhang, Fund Manager at AXA Investment Managers, explores the emergence of China in the biotech industry and the opportunities and challenges facing the region.
he US has and continues to dominate the biotech sector, but the landscape is evolving. Ageing populations and health concerns related to lifestyle changes such as growing obesity prevalence are global issues, impacting Asia as much
China, as with the rest of the world, is experiencing significant demographic shifts. Its population of senior citizens is to nearly double over the next three decades to around 366 million in 2050. Zhang explains that healthcare expenditure will rise rapidly over that period, and the need for drugs for neurodegenerative disorders will be particularly high. Moreover, the increasing incidence of cancer in the region, the emergence of obesity, and the rising demand for fertility clinics and the treatment of genetic diseases has reinforced the need for innovation and increased options in the biotech sector.
Global Trends
Accordingly, there has been a huge rise in investment allocated to Chinese biotech funds. In 2018, the Hong Kong stock exchange implemented new listing rules that allowed pre-profit revenue companies to list, greatly expanding the sector in Asia.
Zhang says: “From then, more than four dozen biotech/medical device companies achieved initial public offerings on the Hong Kong stock exchange, raising billions of dollars to support the development of novel therapies.”
She says: “It's still early days, but over the next 10 years, Chinese biotech is positioned for its next big step and that presents exciting investment opportunities.”
Investment opportunities in the Chinese biotech sector are already becoming apparent. Zhang highlights several high-profile partnership deals where multi-national companies have licensed drugs from Chinese biotech firms – a reversal of trends where Chinese firms typically license drugs from western firms.
The next step
She says: “We have seen well-established multi-national companies signing deals and licensing drugs from Chinese biotech firms: I-Mab and AbbVie, Novartis and BeiGene, Lilly and Innovent, to name a few. Many of the drugs being developed by Chinese biotech companies are truly innovative which means they now stand as peers with the R&D pipelines of many of the Western biotechnology companies when large cap are considering deals.”
However, one factor that could impede growth opportunities will be the impact of US/China tensions. With the US requiring the auditing oversight of companies listed in the US, there is a risk that Chinese biotech companies could be delisted if they are found to have inappropriate levels of auditing transparency.
Zhang notes positive developments in this regard. She says:
“Recently, two countries have preliminarily reached an agreement, providing a framework to allow inspection of China-based accounting firms by the US regulator. This is a significant step forward to alleviate the delisting risk. As an investor, we monitor the progress on this front very closely.”
Challenges for Chinese biotech firms also exist from a research perspective. For treatments to be approved in the US, trials need to span multiple regions, focusing on various ethnicities, not just Chinese. Zhang emphasised that in the long-term this could help improve the strategy of Chinese firms, as global business opportunities require globalised research practices.
Domestically, the Chinese biotech sector also needs to develop a reimbursement model that can support new therapies. In China, public insurance programmes are still the main channel for patient access. If the country is to bridge the gap with the US biotech sector, it needs to develop its private insurance market to help accommodate the high cost of transformative therapies for patients.
Despite the challenges, the Chinese biotech industry has still progressed at an unprecedented speed. In the long-term, the region could pose healthy competition to the US market, with more opportunities and choices for patients and investors.
Zhang says: “Companies that adopt sustainable research and possess a responsible management team will prevail in financial markets. It doesn't matter in which region, whether it's in the US or China.”
“Companies that adopt sustainable research and possess a responsible management team will prevail in financial markets”
Not for Retail distribution: This marketing communication is intended exclusively for Professional, Institutional or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly. This marketing communication does not constitute on the part of AXA Investment Managers a solicitation or investment, legal or tax advice. This material does not contain sufficient information to support an investment decision. AXA Framlington Biotech Fund is a part of AXA Framlington Range of Authorised Unit Trust Schemes and is managed by AXA Investment Managers UK Limited, part of the AXA IM Group. The capital of the Fund is not guaranteed. The Fund is invested in financial markets and uses techniques and instruments which may be subject to sudden and significant variation, which may result in substantial gains or losses. Single Sector Risk: as this Fund is invested in a single sector, the Fund's value will be more closely aligned with the performance of that sector and it may be subject to greater fluctuations in value than more diversified funds. Currency Risk: the Fund holds investments denominated in currencies other than the base currency of the Fund. As a result, exchange rate movements may cause the value of investments (and any income received from them) to fall or rise affecting the Fund's value. Further explanation of the risks associated with an investment in this Fund can be found in the prospectus. Past performance is not a guide to current or future performance, and any performance or return data displayed does not take into account commissions and costs incurred when issuing or redeeming units. References to league tables and awards are not an indicator of future performance or places in league tables or awards and should not be construed as an endorsement of any AXA IM company or their products or services. Please refer to the websites of the sponsors/issuers for information regarding the criteria on which the awards/ratings are based. The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. Exchange-rate fluctuations may also affect the value of their investment. Due to this and the initial charge that is usually made, an investment is not usually suitable as a short term holding.
In depth Q&A: How AXA IM picks biotech disrupters
Linden Thomson and Peter Hughes explain their funds’ investment approach and how they gain exposure to innovative companies while seeking to provide an attractive level of long-term capital growth
My starting point is that not everything that matters can be measured
“In those broker conference calls,” she says, “I told companies that we can now buy algorithms and data sets that are scanning presentations, marketing documents, and news releases relating to your company to tell us what the sentiment is on your company, in real time.”
“There is a huge impetus to invest in real assets, since you get this perfect storm from a scheme point of view because of the low correlation [to other asset classes], higher inflation protection, and higher return potential,” he says. “It’s a key thematic from a client perspective, being able to access a product that can help with both [returns and ESG commitments].”
Initially planted within the UK and expanded into Europe later, Meiklejon explains this is a “relatively small part of the portfolio, but the carbon efficiency is very significant”.
From a fund perspective, ensuring that you've got a balanced portfolio across the large caps that are lower growth but defensive, cash flow generative and profitable companies, as well as having the mid and small caps is important.
“Not all companies will be able to respond to the risks or the opportunities equally, in the same time frame or at a reasonable cost”
Thomson: AXA Investment Managers has a long history of running sector funds and the healthcare franchise is one of those. We've successfully run both biotech and a healthcare franchise for over 20 years and we're one of the most established long-only investors in healthcare in Europe.
The Biotech Fund specifically invests in biotechnology companies, and we try and keep it pure to that investment thesis so that investors know what they're getting when they buy the fund. The fund invests in biotech companies ranging from small caps to large caps, but all the focus is on innovation in drugs and bringing new medicines to patients.
Hughes: The long-term thinking feeds into the focus on management quality. You want people who are going to be at these companies for a long time and they need to develop drugs through a number of different challenging stages and then transition the company into a commercial operation.
What differentiates the fund from other products in the marketplace?
Thomson: I think the key for investing in the sector is having a scientific background and rigour to hold companies to account on what they're doing. This includes how their drug works, how competitive it is versus others and how management are executing research and development, commercialisation and communicating to investors. Every company believes they have a solution to the next medical emergency or unmet medical need, yet statistics suggest that most drugs in development will fail. Understanding the science and likelihood of success is key to what we do.
I've been looking at biotech from both the buy and sell side since soon after the sector emerged. I've seen markets get too excited and equally, too pessimistic. Being a long-term investor in a market means you can take advantage of those highs and lows relative to what the fundamentals should be.
What is your process for evaluating biotech firms?
Hughes: Argenx is a premier example of a company that we've been invested in for a long time. Management have been very pragmatic and purposeful in the way they go about their development. They realised they had a great asset on their hands and really moved that forward at pace to develop it. They're reaping the rewards of that now.
Thomson: We first invested in the company when it was a European small cap with no approved drugs on the market. However, it had a good technology base, great management quality and an intriguing mechanism of action for the lead drug, which has the opportunity to treat numerous diseases. They then launched into the US market and they have not looked back.
Do you have an example?
Hughes: There are absolutely diversification benefits. If you look at the NASDAQ Biotech index and do a daily correlation over the last 3 years to MSCI World Health, it is more aligned than Pharma. The NASDAQ Biotech index does not move in parallel with pharma.
When you look at the top 10 best-selling drugs of 2021, they were all biotech drugs. if you're looking for innovation in drug development, why look at pharma when you can just skip straight ahead to biotech? I think it's fair to correlate high sales with best innovation and I think that's proof that the best innovation is coming out of biotech.
Are there diversification benefits to the fund?
Thomson: If you assume that passive performance is equivalent to an index, then you look at the performance of the fund versus the index to know why active is better. The fund has outperformed the index across all time periods through 10 years and that speaks for itself.
Hughes: A passive index is going to weigh you more towards the large caps, which have slower growth potential than the mid-caps. It's also a fallacy to believe that these passive indexes are built upon pure biotech exposure. Many of the companies are actually pharma companies or specialty pharma companies and don’t showcase the same innovation.
Hughes: It's for people who are looking for disrupters rather than to be disrupted. And you've got a situation where if you try and get exposure to biotech through a generalist fund, it's unlikely that they're going to be able to diversify the risks sufficiently. For our fund, we've got most of the risk coming from stock-specific risk, which is exactly where you want the risk to be.
Thomson: I also think biotech right now is interesting on a macro point. You've got 5%, 6% top-line growth; people's bullish view made them think they could find better returns elsewhere over the last two years. However, now people are looking at reliable 5% and 6% growth and saying “brilliant”.
Who is the fund for?
“The key for investing in the sector is having a scientific background and rigour to hold companies to account on what they're doing”
“The fund is for people who are looking for disrupters rather than to be disrupted”
Louise Kooy-Henckel: Impact investing is an area where we’ve been a real innovator and an early mover. In the equity portfolio, we're looking to identify and invest in companies that are directly seeking to solve some of the big problems in society and the environment, as well as to deliver an attractive financial return.
Tell us about Wellington’s relationship with impact investing.
What is the active management benefit?
Making the investment case for biotech with a look at top-selling drugs, companies at the forefront of innovation, and valuation
A deeper look at the numbers
Innovation led - high growth, defensive business – supported by structural shifts in demographics and lifestyles
Top 10 selling drugs globally are all biotech derived
Fundamentals supported by structural shifts in demographics and lifestyles
Meaningful geographic expansion opportunities
Share prices correlate to sales growth long-term
Innovation in Research & Development pipelines looks good
Gene Medicine & Gene Editing
High numbers of companies are trading under their cash balance
Valuation – sector the cheapest it has been in two decades
Number of companies trading below cash
Portfolio revenue growth CAGR forecast at 18%*
Biotechnology fund offers diversification and exposure to innovative, high growth sector
Nasdaq Biotech Index (NBI) Market Cap
Returns Correlations (36m)
Targeted Neuroscience
More Oncology
Portfolio average market cap breakdown versus benchmark
Pioneering innovations
Next wave commercial
Mature large caps
AXA Framlington Biotech
Nasdaq Biotechnology Index
Source: AXA IM. Note: market cap – market capitalisation. (1) Update annually. Portfolio positioning is as at 31/05/2022. *probability adjusted.March 2022.
0.85
0.63
Source: AXA IM, CRISPR, Intellia, Ultragenyx, Moderna, Sarepta Therapeutics, Denali, Biogen, Xenon, Karuna Therapeutics, iTeos Therapeutics, Ideaya Biosciences, Arcus Biosciences, Zentalis. Companies shown are for illustrative purposes only as of 31/03/2022 and may no longer be in the portfolio later. It does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities. CR09911/07-19
Source: FiercePharma.
Source: Cowen as at 25/02/2022.
Source: US population estimates, Catapult Health Oct 2019
Source: Jefferies.
Source: Jefferies as at 08/05/2022.
$80bn China Market 2030E, +10% CAGR
The investment case for biotechnology
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Linden leads investment in the AXA IM Framlington Biotech Fund and co-manages the AXA IM Healthcare Fund. She has nearly two decades of buy-side and sell-side experience as one of the early specialists in the biotechnology sector. Her formative career was spent with Goldman Sachs in the Global Investment Research team covering healthcare/biotechnology. She has been at AXA IM since 2011. She holds a BSc in Biology (Medical Microbiology Hons) from the University of Edinburgh and is a CFA Charterholder.
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Linden Thomson
Cinney has over a decade of experience in the financial industry. Prior to joining AXA IM in 2021, she was an equity research analyst focusing on the biopharma sector. Cinney holds a MPhil in Statistics from University of Cambridge and is a CFA Charterholder. She also has a MBA degree from Cambridge, completing her thesis on “The Rise of China’s Biotech Sector: What the Future Holds”.
Cinney Zhang
Peter has been a Fund Manager at AXA IM Equities since 2015, specialising in healthcare. Head of AXA IM Equities healthcare impact research, Peter holds a PhD in Biochemistry from UCL and is a CFA Charterholder. He is also an Ambassador for the Royal Marsden Cancer Charity.
Peter Hughes
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This marketing communication does not constitute on the part of AXA Investment Managers a solicitation or investment, legal or tax advice. This material does not contain sufficient information to support an investment decision. AXA Framlington Biotech Fund is a part of AXA Framlington Range of Authorised Unit Trust Schemes and is managed by AXA Investment Managers UK Limited, part of the AXA IM Group. The capital of the Fund is not guaranteed. The Fund is invested in financial markets and uses techniques and instruments which may be subject to sudden and significant variation, which may result in substantial gains or losses. Single Sector Risk: as this Fund is invested in a single sector, the Fund's value will be more closely aligned with the performance of that sector and it may be subject to greater fluctuations in value than more diversified funds. Currency Risk: the Fund holds investments denominated in currencies other than the base currency of the Fund. As a result, exchange rate movements may cause the value of investments (and any income received from them) to fall or rise affecting the Fund's value. Further explanation of the risks associated with an investment in this Fund can be found in the prospectus. Past performance is not a guide to current or future performance, and any performance or return data displayed does not take into account commissions and costs incurred when issuing or redeeming units. References to league tables and awards are not an indicator of future performance or places in league tables or awards and should not be construed as an endorsement of any AXA IM company or their products or services. Please refer to the websites of the sponsors/issuers for information regarding the criteria on which the awards/ratings are based. The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. Exchange-rate fluctuations may also affect the value of their investment. Due to this and the initial charge that is usually made, an investment is not usually suitable as a short term holding.
