International Biotechnology Trust plc (IBT) Earnings Call Transcript & Summary

Well, good morning, ladies and gentlemen, and welcome to the International Biotechnology 2025 Outlook Webinar coming to you today from the Schroders headquarters in the heart of the city of London. I'm Roland Jones. I'm responsible for the investment trust sales here at Schroders. But I'm joined today by your 2 fund managers, Ailsa Craig and Marek Poszepczynski. Now over the next 20, 25, 30 minutes or so, we're going to review last year briefly, but more importantly, look at the biotechnology sector in 2025 and work out where we think we can make some money for shareholders over the next 12 months. There'll be plenty of time to ask questions. We've got some interesting developments and some good topics to discuss because, Ailsa and Marek, I gather you've just literally just returned from one of the top conferences in the biotechnology sector, the JPMorgan Healthcare Conference, run every year, and this is your 19th year, Ailsa. So what were the key standout moments from those -- from that conference?

Yes. We were thinking about this. So traditionally, when I first started going to the JPMorgan Healthcare Conference, you had come off the plane, you didn't have WiFi in the plane then and turn your BlackBerry on and you'd see deals. So this is a conference -- it's the biggest conference of the year, and that's where people tend to announce M&A and they'd saved up -- save other news like guidance as well. And this year, I got off a plane, and there was a rumor that Johnson & Johnson were looking to acquire Intra-Cellular. It wasn't confirmed at that point, which is fantastic because it was obviously our largest position in the fund. It was definitely a name that we thought could be acquired. And also, aside from that, it's the third time now in the last 2 years our largest position has been acquired. So that was fantastic news. And then we sold that position. It was about 10% of NAV and reinvested it pretty much in the next 2 days, perfect timing because we're meeting all of the biotech companies with new ideas, et cetera. And so -- and the sector actually fell off. So we had an opportunity -- buying opportunity in those names. So yes, really good start to the year, very happy about that. Anything else? Yes?

Yes. I mean it's -- generally, this is a business development conference. And what's interesting with JPMorgan is that initially, it started with having a conference in one hotel, but it has morphed and expanded over the years. So now we have 50, 100 hotels, and all the companies have leased hotel rooms, et cetera. So it's a lot of business development and future M&A that was discussed in this. It's very vibrant. And if you go to the Union Square, which is the center of JPMorgan, you can meet hundreds of pharma people and people you know. So you...

So what do you pick up -- what do you get from that? What makes the difference from going to that conference? And how does that impact the funds and the shareholders?

Well, face-to-face meetings, I think, are absolutely key in eyeballing the company management teams and hearing fresh news because like I said, they save up news for this conference. So you get the latest information. It's a really useful forum. Okay. So I'm going to -- we're going to start off with some slides. And as Roland said, we're going to do a quick review of our performance historically, how we're positioning the fund for this year and then a little bit on the sector outlook, so fund outlook and a sector outlook. So just as an intro, I'm pretty sure most people on the call have -- know us too, but I will mention that Marek hates talking about this, but he has extensive industry and drug development background. He's also founded 4 biotech companies, 2 of which have already exited. English is his third language, which tends to be why I do more of the talking, but we're going to try and be more of a discussion today so that Marek can be heard as well. Okay. So again, you know where we sort in at the Schroders team. We won't dwell on that right now. I mentioned a brief overview. So we -- the fund has done well historically on performance on every time metric. So 1, 3, 5 and 10 years, we are beating our benchmark. You know that we have an NAV -- a 4% NAV dividend paid out each year in 2 installments. And this is actually quite interesting because we communicate to shareholders that although we don't invest in companies with a natural income, M&A is a big part of the ecosystem of this industry. And the Intra-Cellular deal we just had effectively pays for the dividend payment twice over in cash coming in. So you're getting cash out as and when we have these exits. Volatility has been lower historically. And of course, we are invested in the innovative part of the sector. So these are some performance numbers to the end of December. They'll be on our factsheet as and when that's released. And you should always take some time to look at the fund disclosures. Right. So how have we managed in the past? And how are we going to manage the fund going through '25? We have historically done a top-down and bottom-up approach. We reduced our positions into binary events. We think that preserving capital is key when you invest in biotech. M&A, as I've mentioned, is a big part of the ecosystem, and Marek is going to talk a bit more about that. And like I said, we had Horizon, Seagen and now Intra-Cellular, all of which were our largest holdings at the time being acquired. We think there's more of that to come. We use our gearing tactically. Because we shifted the fund into the earlier-stage names, tilted the fund, we are looking to reduce risk by having baskets of stocks. So I'll talk a bit about that later. And then another thing of note that's changed in the last 12 months and going forward is we've reduced our position into oncology companies because we think it's a bit overcrowded, something we're going to come on to. Anything else you want to mention?

No, that's -- I think that's -- you've covered it all.

Okay. So I'm going to just speak a bit on this slide. So this is -- we've mentioned before, again, the sector does go in and out of favor for various reasons. We're currently in equilibrium. This is the best sort of investment phase, and it tends to be the longest. The next stage would be, let's say, if we saw some sort of bubbly valuations and the previous stage would be when things have come to a complete standstill and companies can't raise money and there's no IPOs coming through to the market. We're in the middle of that. So we're seeing some IPOs, albeit not very many. I think there's 4 booked at the moment, but the performance from last year's IPOs hasn't been strong. And I think actually, Marek, you were talking about this. There's a -- the venture companies aren't necessarily wanting to list, are they?

No, that's a reality. While the public markets biotech companies, which we will come back to later, have lost in valuation, especially on the smaller size area, which means the venture companies do not get the bang for the buck. So it makes much more sense for them to continue investing and make these companies more mature before they either float them or maybe what we have seen in the last couple of years that pharma straight buys these private companies rather than go through the IPO route and go through the public domain.

And they might -- I think venture companies probably want to see some IPO companies perform well before they go public. So Marek, do you want to...

Yes. So how we operate at IBT is probably everyone else, take that into consideration, but we really want to focus on the sentiment and where biotech is in the cycle of -- in the macro cycle. So one way of dealing with this is we focus on companies as such to begin with, like a company needs to have their own single own asset, meaning that they own the IP, they don't have any out-license royalties, et cetera. So they own the project or product by themselves. They address a very high unmet medical need because we believe it's very hard to get reimbursement to justify high price unless you address a high unmet medical need. A monopoly position is, of course, desirable because if you are the first or 5 years ahead of any competition, you tend to be able to take the market, consolidate the market. It's very hard to be second in line because you have already established your situation. You have long-term exposure of patients, you have a good safety data. So it's very hard to be #2. Financial strength is very important for companies, especially in biotech. And we saw during the pandemic, a lot of companies raised a lot of money, but then we had a setback in valuations. And those companies that were clever enough to raise money at that point, they actually survived. Even though they might be valued at cash, they have the financial power to execute on their plans.

And so 2024, obviously interest rates hurt our sector massively, not just biotech, but small caps because interest rates were rising. And because that's more normalized now, we think that we're more optimistic on performance for the biotech sector looking forward in '25.

Yes, absolutely true. So one way of dealing with that is the -- how we do it from the top-down perspective. One thing is to figure out which companies to invest in. And having said that, if you look at the bottom-up perspective, in our portfolio, we have between 60 and 100 companies depending on the time frame. But globally or our universe is around 1,000 companies. So you can imagine it's very few companies that actually qualify to be investable from our perspective. And I think that's the majority of our job is actually to look for red flags and disqualified companies rather than include them. And I think that's something that we seldom discuss that majority of companies are discarded by us, and that's the majority or bulk of our job. When it comes to top-down, we need to diversify by market cap. Therapeutic areas, we don't want to be too exposed. And I will come back to the macro environment because that is a key element for biotech because very sensitive to interest rates. And if you look at this slide, you can see that on the green, you can -- the green graph shows the interest rates, the 10-year yield; whereas the blue is the XBI, which is the biotech index, small-cap biotech index. As you can see, when interest rates come down, the biotech sector improves. And we have also seen when Silicon Valley Bank failed, that was an anomaly. So that was a period in time where interest rates went up and they went down and NBI went down at the same time. So we took advantage of that.

But Marek, obviously, you talked about interest rates affecting the direction of travel as far as the sector is concerned. Surely, the companies that you're investing in don't have debt. What's the reason for that relationship?

That's a really good question. So when you think about drug development, it's a 10-year effort. This is why we believe 10-year yield is a really good gauge. Once you invent something, you need to go through the process, the research, the development, and it usually takes 10 years from invention to a drug approval. And during that period, you have costs. And if interest rates are high, the cost of capital is high. And that, of course, will affect the valuations of your companies. The reverse is true, of course. This is why we -- during the pandemic, when interest rates went to 0, valuations went sky high. So this is why it's so important and why it's expensive.

So the cash expense is a long -- is coming in 10 years' time. And if you discount that back and rates go up, the valuations fall.

Yes. Understood.

Do you want to...

Yes. So let's go and see what has happened during the last 5 years. And as you can see, NASDAQ Biotech Index on the left-hand side versus S&P Biotech and S&P 500. And what's interesting, fundamentally, biotech is a growth area. I mean we get older, we get sicker, we need more medications and top line growth is around 5% on an annual basis. And also we have patent expiries. So it's a big need to replenish pipelines for the big pharma companies. And as you can see, valuations on biotech has been basically flat for the last 5 years. This is why we believe we have a pent-up demand, and we will probably hopefully see an uptick in valuations in biotech. Pharma needs to come to the table and acquire companies because that's the ecosystem that biotech works in. On the right-hand side, a very good gauge of the sentiment that we have seen in the last couple of years. The percent of biotech companies traded below cash or at cash. As you can see, we hit all-time high in 2023. 2024 has gone down a bit, but you can see it's very highly elevated, which would indicate historically that biotech is undervalued.

Yes. So just in terms of where we're positioned for 2025, we think this is where the value is right now. And as I mentioned earlier, we've tilted to SMID caps, and we're going to stay there. There's no -- at the moment, we're not thinking about moving back to the larger cap names. Should I do this one?

Yes, sure.

So these are the M&A transactions we've had in the fund. We've had 2 recently, the major one being Intra-Cellular that I mentioned. So that's a decent number, echoes Marek's background, which is that he worked in biz dev in this industry. He knows what pharma looks for, and he knows how pharma values a company. What's of note, though, you can see a distinct white gap in the latter part of '24 on the quoted part of the market. And we think that's going into an election. People were -- they were still negotiating behind the scenes according to the bankers we met at JPMorgan, but they didn't want to take the risk with the FTC being headed up by Lina Khan. So now that she is thought -- she's going to step aside and a new FTC head will be put in place by Trump, we expect that person to be more industry-friendly. Ultimately, these -- the biggest deal that we saw at JPMorgan this year, we haven't seen a deal that size for 2 years in the sector. Why? Because people are worried they're going to get sued by the FTC and it's painful. So they're waiting for this new administration, and we expect to see a pickup in M&A. This is the need for M&A. You guys know this slide. Pharma ultimately have a massive patent cliff coming up. It's vast. They really need to replenish those sales. In terms of outlook for the fund, the way we're mitigating risk is that we have a collection of companies within a disease area. And that stops any sort of major blowups by having a large position in a smaller company, and it's the smaller companies that move down hard on negative news. Emerging oncology, I'm going to come into. This is an area that's becoming increasingly crowded. M&A targets, we don't specifically meet companies and invest in them because we think they're going to get acquired. We just look for the same characteristics that you heard when you're in biz dev when we make our investments. And obesity, we do have a selection of obesity names within the fund. It doesn't make up a massive part of NAV there at the moment. This is our top 10. The one thing to pick up on this is that we have smaller positions in our top 10 now than, say, 12, 24 months ago. And why is that? It's because they're smaller companies, and we don't want to take massive risk in these smaller names. So it used to be over 50% of the fund in our top 10, and now it's just 39%. So this slide, bottom right is new. Why have we reduced our exposure to oncology? So bottom left shows, if you can see, the third bar down is 17% of the fund is invested in oncology, so cancer names. That used to be over 1/3. Why have we done that? Well, switch to the right, you can see this line graph, which shows the number of development drugs going after the same target, the same thing. So oncology, there are 5.5 drugs out there in development going after the same asset. Non-oncology, it's only 1.5. So it's much more crowded. We've taken a decision, therefore, to pull away from oncology. As and when they're proven, fine. But in development, it's a difficult market to get right. The other thing to note on this side really is -- or on this point is that when you have an incumbent, i.e., I don't know, Pfizer with an oncology product selling well, new drugs coming in, however smart the science is, however sexy it is, they've got to beat that incumbent and differentiate on safety or efficacy to a material extent such that they can take market share. It's no good just having the same efficacy and the same tox profile and launching a drug. Top right, just to show we've tilted the fund away from profitable companies, so only 18% now in profitable. But suffice to say, nearly 60% of the fund is invested in a company with an approved product. So we're not going all in on small-cap companies. It's a measured balanced portfolio.

Just before we start on the outlook, just to remind you, ladies and gentlemen, if you have any questions, we will have time to answer them. We had a few coming in already. But actually, quite a few around drugs pricing and a comment you made, Marek, about the venture side of the business staying invested for longer. So we'll come to those, ladies and gentlemen, but perhaps you can give us some idea as where we think we can make some money in 2025.

So what's the exact wording? Because are they saying, will the Inflation Reduction Act change under the new administration? Or are they just talking generally?

It's just -- so we have a question with -- about RFK. We...

Yes. Okay. We've got a slide on that. So we'll come to that. And then the venture longer, they will, wouldn't they?

Yes, they will. I mean that's what I hear when meeting venture companies. And think about what happened, I mean, time-wise, when pandemic hit, a lot of venture companies went listed, IPOs, and that's an exit for a venture company. And then they raised new funds. So they had a lot of dry powder reinvested in earlier-stage companies, probably it's somewhat overvalued or at least there was a raise for these companies and then the recession or valuations came down. And now you need to justify valuations. If you do an IPO, you need to do a write-down in your books, and probably you don't want to do that. And since you have dry powder on the side, you can as well keep it private for longer, which we, as investors believe it's not a bad thing because when we saw a lot of early-stage companies listed in 2021, a lot of them failed, which kind of left a bad -- it was bad for the industry because we have had a lot of consolidation. I think we had 350 companies in the index for a while, and now we are at 250, something like that. So 100 companies have gone out of business or being merged, et cetera.

On that topic, might we increase our exposure to SB, the private asset?

That's a Board decision. So the Board meet once a year for Strategy Day. And in the mandate of the fund, it says that there's to be within the range of 5% to 15% within venture funds. Currently, we're quite low single digit because of -- yes. And so if the Board continue with what they were doing in the past, you would expect them to invest in another venture fund at some point to bring that percentage up. Of course, the percentage can change passively. So if the quoted market recovers and is strong, that number is going to come down. And if the quoted market is weak, the number can come up.

Okay. Wonderful. Well, let's go straight to the outlook. What are you thinking for 2025?

Yes. Okay. So secondary offerings, and there was a chart that we touched on earlier showing that actually, during the dry period, the fallout in biotech in '22, '23, secondary offerings could still went ahead if the companies were high quality and showing good data. So we expect that to continue. IPOs, so we've touched on this already, we've had a definite fall in IPOs for all the points that Marek has been making. We've got a few in the pipeline. We expect it to increase. We don't think it's going to be back to 2020, 2021 anytime soon, however. Number of clinical trials, so do you want...

Yes, that we have seen in the fourth quarter, we've seen an uptick, but...

New clinical trial starts.

New clinical trial starts. And also, I would like to point to the venture that they have started to participate in these pipes as well, the secondaries, which is a good sign because they see value there as well. And what's interesting, the FDA number of approvals in 2024, we saw the percentage, for first time ever, biotech have overtaken pharma as the most productive part of the industry. 50% of drugs approved now in 2024 emanate from biotech and additional 20% have their origins in biotech. So 70%...

But they were acquired by pharma.

Yes. So 70% of drugs in 2024 were emanating from biotech.

And if you look at the same -- we've got this chart we should have put it, but the same data in 2013, so 10 years ago, it's the inverse of that. Pharma had 70% on new drugs and biotech only 30%. So that's completely flipped around. Okay. Here we go, this is the secondary slide. So you can see the green bars are secondary offerings and the blue -- dark blue is the IPO market.

Okay. So we had a question on politics.

Yes, a couple of questions on RFK and his appointment, if he gets -- if indeed he is appointed, but let's take it as read. Basically, what impact will he have on share prices as he already had an impact on share prices, and is it warranted? And also, a concern about the high price of drugs in the U.S., what impact will his appointment have on pricing on a broader level?

Yes. So the -- it's a -- we'll take drug pricing first, and then we'll do politics, which is obviously interlinked. But the Dems introduced drug -- the IRA, Inflation Reduction Act, which within that enabled Medicare, a big buyer of drugs in the U.S., to negotiate drug prices with the top 10 blockbuster drugs that they announce each year and they increase that number each year. And we don't think that that's going to change. So obviously, the U.S. administration -- new administration have come in to try and cut costs. So it was unlikely they're going to unwind that. Will they extend it? The consensus view is that it's probably just going to stay as is. Drug prices are high. However, with the way that the drug development system works is that you get free pricing for 10 years, your IP, you don't get this in mobile phones or anything else, just drugs. And then after that, it becomes generic. And that's the deal with society, and it's worked. Look at all the innovation we've had and the longevity and cancer drugs, et cetera. So we don't think that dynamic will change. Obviously, a lot of this administration is unpredictable. We -- ultimately, we can't say what these guys are going to say when they move into their nominations if confirmed. But just to -- it's sort of positives and slightly negatives. So the first point, the FTC, which we talked about, Lina Khan, incredibly difficult when it came to big deals and allowing them through. If she leaves and someone else comes in, we expect that to be a more merger and acquisition-friendly department within the U.S. administration. So we expect M&A to go up in 2025. RFK absolutely has had already an impact on biotech sector valuations and health care, pharma. So we all know, I think, that RFK has some controversial views on vaccines. He also is really pushing food. So he wants to -- and a lot of these things, no one would disagree with, food additive, food dyes. He's got concerns on agriculture. So what -- how is this going to play out? So we've had like a real nervousness in the market. We think -- we do think this is priced in. There could be, we're not saying there will be, there could be a relief rally coming out of these appointments if things are the status quo. He's had to temper his views. He's getting -- he's up against Congress tomorrow to be nominated. He's going to get absolutely grilled. It will be amazing TV if anyone has time to watch it. Anyway, so he's going to be Head of Health and Human Services, if nominated. He -- we think he's going to be tilted more to prevention and not -- he wants just to get -- make America healthy again, which is the mantra. And then the FDA, Martin Makary, he is standard, you'd expect the Trump administration, the Republican administration to appoint someone like him, sensible guy. And then CMS, Dr. Oz, again, someone that's well respected. And then NIH, we've missed off this slide for some reason, Bhattacharya is also a highly respected person. So RFK is the controversial one. You're right to ask that question you ever did. It would be good to see that play out and where does he focus. Is it the food? FDA, Food and Drug Administration and then he backs away. He's not going to tell anyone they can't have vaccines. That's not going to happen. He's come out and said that. What he doesn't like is vaccine mandates. And they might sort of -- he might look for funding to test for the safety of vaccines. That's something that's been aired.

So it's testing the efficacy of the science as opposed to...

The safety. I think he wants to have some clinical trials looking at safety. Who knows what he says he does? But that -- again, we don't invest in these companies. We should be relatively immune, the IBT, to any concerns around vaccines.

Well, as you said it, on the slide, net neutral for biotech.

Yes. So you got the FTC is positive. This uncertainty is negative, but we've seen it. People have been banging on about this for a long time. And let's see what happens tomorrow and then let's see the reality of what RFK does.

And obviously, the other sort of big news over the last couple of days has been the huge sell-off in technology driven by the deep -- the threats of DeepSeek from China. Is there any spillover, do you think, from that? And actually, another question would be, how does AI actually have an impact on biotech more generally?

Yes, you can start with that one, I can take the AI question.

Yesterday, I watched the market until 9:00. And we saw the crash with NVIDIA, and a wall of money just moved into biotech. And you can tell, I've been following biotech companies since 2001, you know when there's a wall of money there, and there was. And it moved in and you just think, whoa, and all the specialists, the only people that are investing in biotech at the moment because generalists aren't, just went, okay, this is tech money coming out. It's such a vast amount. Biotech has not been an area that investors have been favoring in recent years. They're probably in NVIDIA. So what happens when that blows up? Who knows what 2025 is going to bring, but there's a lot of money held in those 7 names and they're all these fantastic companies, all the innovation, so productive, sitting there as targets of M&A from pharma. It looks attractive to us.

That sounds good.

Yes. And I can say the wall of money and also it affected pharma because we saw pharma receiving a lot of initial flows. But what we usually tend to see is that you have the first wave of money coming into the large, well-known companies, stable one, and then has been historically trickled down to the midsize and smaller names where people feel more comfortable investing in them. And coming back to the AI, how pharma is using the tools because that's what it is, AI is using tools. I mean the Nobel Prize was awarded for protein folding, and that's AI basically, how they conform in 3D space. But in general, what pharma does initially here in AI is how to kind of produce the next drug like computerized. And -- but the problem what we see or a challenge is that despite having the best theoretical drug in the world, you still need to pass it through the system, the preclinical, the clinical phases and that is a time span of 5 to 8 years. So you can -- what can happen is that you might limit or lower the number of failures, which is a good thing for AI. And secondly, you can gather really good clinical outcome data and kind of stratify it in a smarter way so you can design studies smarter. This is where we see the benefits. But squeezing time lines, not necessarily that will happen, but you probably have better outcomes, which is very positive for the sector.

So what we're seeing yesterday is money coming out of quite a highly valued sector into hopefully an area which hasn't done -- hasn't been in the mind of investors over the last couple of years, which could benefit from it.

Exactly. Yes. Absolutely.

Wonderful. Okay. A couple of more questions. The -- do you have any exposure to medical technology within the business?

We don't, really. And we can invest in med tech and diagnostics. We found it's very difficult to make money in that area. So we -- our expertise and our ability really and returns have been driven by therapeutic companies.

Okay. And so do you invest in any companies at all that are in non-medicinal areas?

We do, yes, and we can do and we have done.

Okay. There are -- we've got some -- another question about the use of -- well, yes, the use of AI in drug discovery, which has dramatically reduced the time to market for new drugs. So you are taking advantage of AI within the fund, aren't you? And obviously, the biotechnology companies that we're investing in are using AI to reduce the time...

It's more drug discovery. So that's more venture at very, very early stage. We're looking at sort of Phase I/II all the way to commercialization. And AI at this point is used to analyze data from clinical trials. That would be its role in that phase. Equally, once a drug is on the market, a way -- this isn't something that we invest in, but a way the administration and the world really are trying to tackle health care costs is to use AI and understand how people use their health care system. So you'll hear on the news, don't go to A&E, go to your GP. Why? Because A&E is really expensive. So if they find people in the system that are going to A&E too much, zone in on them and say, look, mate, what's going on? Do you need more hands-on help with the GP and get them out of hospital? That's another way of AI to reduce costs in the system.

Yes. I like that analogy because 90% of health care costs are associated with non-pharmaceuticals, hospitals, diagnostics...

Doctors, nurses.

Doctors and nurses, everything. And pharmaceutics only corresponds to 10% of health care spend. And probably that also reduces cost because you can keep people out of hospitals and keep them healthier.

And there's basically a larger portion of any society -- a small, sorry, a small portion of society do all of the costs, right, the very elderly, whatever, and maybe a little blip when they have a baby, probably you not at all and at all because you run 10 kilometers a day every morning. It's a small portion or proportion of society that uses a huge amount of cost.

Okay. And what else should our investors expect in 2025? Is there anything else that is either concerning you or you're looking forward to and thinking, well, actually, this could make a difference within the...

Yes. Well, it's really interesting, this wasn't -- yes. So last year, we had a number of major clinical readouts like Vertex have their pain data, Alnylam had their ATTR amyloidosis data. This year is different. So this year, and it feeds to what you were saying, Marek, about drug approvals, we're having a handful of companies, biotech companies launching their own drugs themselves. At least that's what they're planning to do, right? They might get acquired. And that's not really happened before. Normally, at that point, they're in pharma, but we've had no M&A, right? So that would be interesting to see how these companies launch the drugs on their own. They don't have a marketing. They have to build the marketing team, build these reps. It would be interesting to see how those launches -- a year of launches this year.

Anything you're looking for, Marek?

No, I'm always looking at the macro perspective and how U.S. will fare because it's 40% of global pharma sales, approximately, give or take, 60%, 70% of all profits made in biotech and pharma is emanated from U.S. So the health of U.S. economy is key for biotech and interest rates as well.

Well, we've actually had a couple of questions about that. If treasury yields go higher, will this have an impact on our positioning with the small mid-cap exposure that we have in the portfolio?

That's a really good question because one thing what we have noticed is that at least our view is the large cap companies have been highly valued. I mean, if you look at the metrics, whatever metrics you want to use, valuations are relatively high. This is one of the reasons we're abstaining from being too much exposed in the large cap because they have been relatively fully valued. We believe the midsized companies that have a product on the market, have growth and relatively less exposed to higher yields because they have their own revenues and reaching profitability, that's the key when you invest, I think, in what we have seen in pharma...

We've also seen that it's the rate of increase that hits biotech and the rate of decrease. So if you have a normalized interest rates and they're just sort of a certain level, we think that, that makes it a much more investable environment.

Well, this all bodes very well, I hope, for 2025. I know, ladies and gentlemen, we are coming to the end of our allotted time. The clock has just gone past 30-odd minutes. So hopefully, we've answered most of the questions. I don't think we've got -- we don't have time for all of them. But thank you for those that have submitted those questions. You can download the presentation. And also there is a survey, which I'd be really grateful if you could complete because it allows us to tailor these sorts of events more closely to you, to your requirements as investors. So on behalf of Ailsa, Marek and myself, thank you so much for tuning in this morning, and have a great rest of the day. Good morning.