IN FOCUS: BIOGEN ‘ IT’S HIGH RISK, BUT THAT’S THE BUSINESS’

Biogen is a large biotechnology company and the dominant player in multiple sclerosis treatments.

The shares are trading at 12 times 2019 earnings, which is really cheap. Earnings growth should be 10pc to 15pc annually for the base business and it has some really interesting new drugs that are selling well.

But the real kicker is that is has an Alzheimer’s treatment programme, with an antibody currently in phase three clinical trials. These trials have the possibility of early stoppage in 2019 in the event of success, which would send the company’s share price up significantly.

It also has a collaboration in Alzheimer’s with a Japanese company. The valuation, considering the potential for the introduction of a disease-modifying treatment for Alzheimer’s within two years, is far too cheap.

There is a lot of controversy, as some people think the programme is worth nothing, but even then the base business is worth quite a bit, and modestly valued.

There’s no certainty, and it’s super high risk, but that’s the business. It would be great for society if it succeeds. At present I don’t own shares. I just joined the board and haven’t had a chance to buy yet, and it is difficult buying a British-listed trust in America. I spent 10 years on the board of the Biotech Growth Trust and what I held there shows I put my money where my mouth is.

The company is a partnership, so we share in its profits. We have to exceed the performance of the benchmark and maintain it for a year. Shareholders only pay when we do a very good job, which we have done. While studying I was a windsurfing instructor, so I could have kept doing that.

www.telegraph.co.uk/funds