The Biotech Growth Trust (BIOG) has been managed by global healthcare specialist OrbiMed Capital since May 2005. During its tenure, the trust has outperformed its benchmark, the NASDAQ Biotechnology Index. OrbiMed favours the prospects for emerging (smaller-cap) biotech stocks rather than large-cap biotech businesses, as this is where the most industry innovation occurs. BIOG’s manager, Geoff Hsu, considers innovation to be the most important driver of the biotech sector’s long-term positive performance. He believes that we remain in a ‘golden era’, evidenced by an expanding pipeline of new drug candidates across all therapeutic areas. The manager expects an acceleration in mergers and acquisitions (M&A) as major pharma companies, facing patent expirations, seek to bolster their product pipelines by acquiring smaller biotech companies.