FUNDVIEW-Int'l Biotech waiting for market to retrace

* Has been trimming small-cap biotech holdings

* Hopes to get back in after about 20 percent fall

By Ben Deighton

LONDON, Oct 15 (Reuters) - Small-cap biotechnology shares have become too expensive and are poised for a fall, said David Pinniger, a investment manager at International Biotechnology Trust (IBT.L).

He has trimmed his holdings in biotechnology, but hopes to get back in once shares have fallen by about 20 percent.

"We've been trimming some of our smallcaps over the past month or so in anticipation that we'll be able to get back in at 20 percent lower at some point over the next part of the year," Pinniger told Reuters on Thursday.

The NASDAQ Biotechnology Index .NBI has increased by almost 40 percent since early March.

The International Biotech fund, which has an about 100 million pounds ($162.4 million) net asset value, has a strong focus on biotechnology, but is currently cutting investments back until values fall.

"What we saw was an increase and an acceleration in the quantity and frequency of follow-on financing ... what we were worried about over the summer was that all of these follow on offerings coming through would just mop up all the demand for biotech," Pinniger said.

"We think we are beginning to see that now so the smaller cap names over the past week, 10 days, two weeks have really rolled over and we think there's a little bit more to come," he said.

The fund is primarily focused on the U.S. market, and Pinniger particularly likes cancer drug company Poniard PARD.O, Alexion (ALXN.O), a company which specialises in rare diseases, and drug developer Micromet (MITI.O).

However he says he has become more positive on the British biotechnology sector in the last nine months, and picked out cancer drug company Antisoma (ASM.L), respiratory specialist Vectura (VEC.L) and drugmaker ProStrakan PSK.L. (Editing by Rupert Winchester) ($1=.6157 POUND)