BB Biotech: The biotech sector extends its outperformance - new technologies an important driver

Friday, 23. January 2015 07:00

BB BIOTECH AG / BB Biotech: The biotech sector extends its outperformance - new technologies an important driver . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

Portfolio of BB Biotech AG as of December 31, 2014

BB Biotech increases the tax-efficient cash distribution significantly to CHF 11.60 per share

The Nasdaq Biotech Index advanced another 11.2% in USD in the fourth quarter, adding to another solid total return of 34.4% in USD for 2014. BB Biotech's portfolio performed very well. The investment company's share price ended the year with a strong fourth quarter of 27.0% in CHF, 28.4% in EUR and 22.0% in USD. The annual performance was 75.1% in CHF, 79.3% in EUR and 57.3% in USD, 23 percentage points more than the benchmark index. These excellent gains continue to be fundamentally sound and driven by new product launches, important regulatory approvals and positive outcome of key pipeline drug candidates. Keeping the payout policy established in 2013, the Board of Directors will propose a cash distribution of CHF 11.60 per share at the upcoming annual general meeting, which is a significant increase of 65% compared to the previous year. This corresponds to a yield of 5%.

Positive sector momentum continues albeit with increased volatility

The continued positive trend of the biotech sector continued in the fourth quarter of 2014 with the Nasdaq Biotech Index (NBI) gaining 11.2% in USD, outperforming the broader S&P 500 Index, which gained 4.9% in the same timeframe. For the full year 2014, the NBI gained 34.4%, more than double that of the S&P Index with 13.7% (all values in USD including dividends).

The continued upward move in the fourth quarter was driven by important product approvals, further progress in key clinical programs, further M&A activity and continued strong quarterly financial results.

BB Biotech performance for the fourth quarter and full year 2014

The share price of BB Biotech once more increased by double digits in the fourth quarter 2014 - increasing 27.0% in CHF, 28.4% in EUR and 22.0% in USD. The positive fourth quarter contributed to the full year 2014 share price appreciation of 75.1% in CHF, 79.3% in EUR and 57.3% in USD.

In the fourth quarter, the Net Asset Value (NAV) increased 26.3% in CHF, 26.7% in EUR and 21.4% in USD - and for the full year, the NAV increased 72.3% in CHF, 75.8% in EUR and 54.6% in USD (including the cash distribution of CHF 7.00 per share).

BB Biotech's performance was driven by the solid sector performance, a strong stock selection and the strengthening of the USD throughout 2014.

BB Biotech admitted to the Stoxx Europe 600

As a positive result of the ongoing success of the last years, BB Biotech was admitted to the Stoxx Europe 600 in December 2014. This decision was made in view of the increased free-float market capitalization and the investment company's higher liquidity.

Proposed cash distribution for the fiscal year 2014 of CHF 11.60 per share

In line with the distribution policy established in 2013, the board will propose a tax-efficient cash distribution of CHF 11.60 per share from paid-in capital reserves following the Annual General Assembly (AGM) on March 18,2015, applying a 5% yield to the weighted volume average share price in December 2014. Compared to the previous year's cash distribution, this represents an increase of approx. 65%.

2014 update regarding the team

Besides investing in the portfolio management team, BB Biotech continues to improve its service level towards a growing international investor base. With Claude Mikkelsen newly located in London, our investor relations activities will target both existing and potential new investors.

In the third quarter of 2014, Dr. Tazio Storni decided to leave the Portfolio Management team. Dr. Christian Koch was hired in the fourth quarter, supporting and strengthening our coverage in disease areas such as fibrosis and retinal disorders. BB Biotech continues to research companies to select new attractive investment candidates in these areas.

Existing portfolio continues to perform well

Highlights in the fourth quarter were clinical trial results from many of our midcap companies:

  • Receptos reported positive Phase II results for its S1P1 receptor modulator RPC1063 in ulcerative colitis (UC). This opens up another large indication for this potential best in class S1P1 modulator. Indeed, in the summer of 2014, the company announced positive results of a Phase II study with RPC1063 for relapsing multiple sclerosis.
  • Radius Health announced positive Phase III results for Abaloparatide-SC in postmenopausal women with severe osteoporosis. Abaloparatide-SC demonstrated strong bone rebuilding properties and led to a reduced rate of vertebral fractures. Progress with its early stage drug candidate RAD1901, a selective estrogen receptor down-regulator (SERD), was well perceived by the stock market.  
  • Isis published and presented promising data for its Factor XI Rx antisense drug candidate for the prevention of venous thrombosis in patients undergoing total knee replacement surgery. Factor-XI Rx achieved similarly low rates of bleeding compared to enoxaparin (low molecular weight heparin) with a multifold lower incidence rate of venous thrombosis (blood clots).

Aside from the overall volatile equity market environment in December, the biotech sector generated a lot of attention due to a large pharmacy benefit manager negotiating a single product preference for AbbVie's HCV drug over Gilead's HCV drug. This decision was based solely on a negotiated price rebate and led many investors to question both the pricing power of Gilead's HCV franchise as well as the market share lead over the new entrant, AbbVie, leading to a significant share price correction for Gilead. Despite the increasing completion entering the large and fast growing HCV market, we expect Gilead to retain its dominant position given its best in class HCV medicines.

Small adjustments in the fourth quarter in a well performing portfolio

All remaining holdings of emerging market stocks have been sold. The Indian investments performed well over the course of 2014, with continued strength in their generics division. Given better investment opportunities in innovative biotech companies, a decision was made to re-allocate portfolio assets, resulting in a further increase in the US asset allocation by reducing the emerging market exposure to zero. The position in Prosensa was closed, given the pending take-over offer from BioMarin Pharmaceuticals. Prosensa had been added to the portfolio together with PTC Therapeutics to cover two promising drugs in development for the treatment of Duchene Muscular Dystrophy (DMD). Besides these two holdings, two antibiotics investments were added. Tetraphase Pharmaceuticals reported initial positive Phase III results for Eravacycline in December, and Cempra announced positive Phase III results for Solithromycin in early January 2015.

Outlook

BB Biotech continues to believe that the elements for success for the biotech industry are very much intact. These include innovative drugs being marketed or developed, and double digit revenue and profit growth for the industry. Valuation multiples remain attractive given these attractive growth characteristics. BB Biotech continues to expect the sector to perform strongly and to deliver compounded mid-term double digit returns (in USD) to investors.

The company's portfolio is specifically geared towards generating above industry average revenue and profit growth. This is achieved by focusing the stock selection process on drugs addressing significant medical needs and on companies that have the potential to become dominant players in their respective therapeutic areas.

Platform companies should continue to excel with companies such as Isis, Alnylam and Agios ideally positioned to create substantial value creation both in the short as well as long term. The substantially improved RNA-based drug development candidates allow companies such as Isis and Alnylam to not only target niche markets and very severe disorders with no alternatives, but also to target much larger opportunities. Agios is expected to reveal further clinical targets identified by its unique metabolom approach.

2015 is expected to be another exciting year in biotech with significant product launches, product approvals and many key clinical trial results.

 

The complete annual report as of December 31, 2014, will be published on February 20, 2015.

 

 

For further information:

Investor Relations

Bellevue Asset Management AG, Seestrasse 16, 8700 Küsnacht, Switzerland, tel. +41 44 267 67 00
Dr. Silvia Schanz, ssc@bellevue.ch
Maria-Grazia Iten-Alderuccio, mga@bellevue.ch
Claude Mikkelsen, cmi@bellevue.ch

Media Relations

Bellevue Asset Management AG, Seestrasse 16, 8700 Küsnacht, Switzerland, tel. +41 44 267 67 00
Tanja Chicherio, tch@bellevue.ch

b-public AG, Pfingstweidstrasse 6, 8005 Zürich, Switzerland, tel. +41 79 423 22 28
Thomas Egger, teg@b-public.ch

www.bbbiotech.com

Company profile     
BB Biotech invests in companies in the fast growing market of biotechnology and is one of the world's largest investors in this sector with CHF 3.5 billion in assets under management. BB Biotech is listed in Switzerland, Germany and Italy. Its investments are focused on listed companies that are developing and commercializing novel medical treatments and cures. BB Biotech's investment selection process is guided by the fundamental research and analysis of physicians and molecular biologists. Its Board of Directors has many years of experience in industry and science.

 

Disclaimer
This release contains forward-looking statements and expectations as well as assessments, beliefs and assumptions. Such statements are based on the current expectations of BB Biotech, its directors and officers, and are, therefore, subject to risks and uncertainties that may change over time. As actual developments may significantly differ, BB Biotech and its directors and officers accept no responsibility in that regard. All forward-looking statements included in this release are made only as of the date of this release and BB Biotech and its directors and officers assume no obligation to update any forward-looking statements as a result of new information, future events or other factors.

Composition of BB Biotech's portfolio as of December 31, 2014
(in % of securities, rounded values)

Celgene   11.7%
Isis Pharmaceuticals   10.4%
Incyte   8.4%
Gilead   7.8%
Actelion   7.5%
Agios Pharmaceuticals   5.9%
     
Vertex Pharmaceuticals   4.5%
Medivation   3.9%
Alexion Pharmaceuticals   3.5%
Radius Health   3.0%
Synageva BioPharma   3.0%
Puma Biotechnology   2.8%
Pharmacyclics   2.5%
Novo Nordisk   2.4%
Regeneron Pharmaceuticals   2.3%
Receptos   2.3%
Alnylam Pharmaceuticals   2.1%
Swedish Orphan Biovitrum   2.0%
Neurocrine Biosciences   1.9%
Halozyme Therapeutics   1.9%
PTC Therapeutics   1.8%
Tetraphase Pharmaceuticals   1.5%
Novavax   1.3%
Infinity Pharmaceuticals   1.1%
Clovis Oncology   1.0%
Tesaro   0.7%
Probiodrug   0.7%
Immunogen   0.6%
Cempra   0.5%
Theravance   0.4%
Achillion Pharmaceuticals   0.4%
Theravance Biopharma   0.2%
     
Radius Health warrants 04/23/2018   0.1%
Radius Health warrants 02/19/2019   0.1%
Cubist Pharmaceuticals Contingent Value Rights - ex Optimer   <0.1%
Cubist Pharmaceuticals Contingent Value Rights - ex Trius   0.0%
     
     
Total securities   CHF 3 523.8 mn
     
Other assets   CHF 9.0 mn
Other payables   CHF (40.3) mn
     
Total shareholder's equity   CHF 3 492.5 mn
Treasury shares (in % of company) 1)   4.8%
     
     
     
     
     

1) Correspond to the total of all own shares held including the second trading line




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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: BB BIOTECH AG via Globenewswire

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BB BIOTECH AG
Vordergasse 3 Schaffhausen Switzerland

WKN: AONFN3;ISIN: CH0038389992;


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