Interim Report of BB Biotech AG as at March 31, 2011
(Thomson Reuters ONE) -
BB BIOTECH AG /
Interim Report of BB Biotech AG as at March 31, 2011
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The issuer is solely responsible for the content of this announcement.
Important product approvals for biotech companies on the horizon
Shares of BB Biotech AG performed very well in a generally sideways trending
market during the first quarter, gaining 12.1% (in CHF, incl. dividends). The
discount between Net Asset Value and the share price declined from 25.9% to
18.9% during the quarter. A number of measures to further reduce the discount
are now being implemented. The investment strategy focusing on mid-cap companies
has produced good returns and will be retained. Prime candidates for investment
are companies with innovative therapies as well as select companies in emerging
markets. Many important milestones and product launches are expected for the
companies in BB Biotech's portfolio, which, together with the inexpensive
valuations across the industry, augurs well for future investment returns.
Stock markets were impacted by far-reaching macroeconomic events during the
first quarter of 2011. The political reform movements in Northern Africa and the
Middle East and the natural catastrophe in Japan will have a long-lasting impact
on the global community. While the general market moved sideways in the face of
this challenging environment, the biotechnology sector was unshaken by all the
headlines and ended the first quarter with a positive performance of 7.3% (in
USD) as measured by the Nasdaq Biotechnology Index. BB Biotech AG's share price
delivered an even greater gain, advancing by 12.1% in CHF, including the
dividend of CHF 3.20 per share, and by 8.3% in EUR. The Net Asset Value (NAV) of
BB Biotech rose by 6.5% (in USD).
Strategy for reducing the discount enters implementation phase
In March 2011 the Board of Directors of BB Biotech AG took a decision with far-
ranging consequences by adopting a broad range of measures designed to bring
about a lasting reduction in the discount. In order to better serve the
interests of company shareholders and to make the stock more attractive to
potential investors, the Board of Directors has formulated and will now
implement an EPS accretive strategy by carrying out a series of share buyback
programs. The objective of the initial implementation phase of this strategy
(accretion), which will entail intensified share buyback activities over a
period of 12 to 18 months, will be to bring the discount down into the targeted
range of 10% to 15%. In the subsequent consolidation phase, efforts will be made
to stabilize the discount and effect a high correlation between Net Asset Value
and the quoted stock price. Additional measures will be taken to ensure the
success of this accretive strategy.
At the annual general meeting on March 21, 2011, the vast majority of
shareholders voted to initiate a new share buyback program. Management initiated
the buyback program in a steadfast and suitable manner immediately following the
AGM and a total of 127'000 shares had already been repurchased by the end of the
reporting period on March 31, 2011.
As the intended effect of the company's former dividend policy - bringing about
a sustained reduction of the discount - was not realized, the Board of Directors
and executive management have decided to forgo future dividend payments. This
decision was made in the firm belief that this capital can now be deployed more
effectively through the EPS accretive strategy. The Board of Directors took the
decision to forgo dividend payments in full awareness that there would also be
some critical voices from shareholders. The initial reactions of institutional
and private investors to the accretion strategy have been positive, however, and
underscore our conviction that the company is on the right track with this
strategy. The discount declined from 25.9% to 18.9% during the first quarter.
Portfolio update
Celgene (-2.6%, in USD) suffered deep losses in January due to renewed fears
regarding the side effects of Revlimid, its drug for treating multiple myeloma
patients. Additional clinical data will be presented during the course of the
second quarter that should strengthen Revlimid's clinical profile.
Actelion's (+3.2%, in CHF) share price in the first quarter was mainly driven by
the struggle for boardroom power. The general meeting scheduled for May 5, 2011
will bring some clarity with regard to the company's future strategy.
Gilead (+17.2%, in USD) extended its recovery that began during the second half
of 2010 into the first three months of 2011. The company published positive
clinical Phase III data on Elvitegravir, its HIV integrase inhibitor for HIV-
positive patients. Other important clinical data for an HIV combination therapy
are scheduled for publication at the end of 2011.
Vertex Pharmaceuticals (+36.8%, in USD) presented very positive clinical data on
VX-770. Results from Phase III studies revealed that this drug candidate for
treating patients with cystic fibrosis improved lung function significantly.
This outcome means Vertex will probably be able to launch two drugs during the
next 12 months, namely Telaprevir for patients with hepatitis C and VX-770 for
patients with cystic fibrosis.
Novo Nordisk (+6.7%, in DKK) also extended its positive newsflow in the first
quarter with the publication of good clinical data on the long-acting insulin
analog degludec for treating patients with type 2 diabetes.
Smaller participations:
* Alexion (+22.5%, in USD) profited in the first quarter from the additional
line extensions for its Soliris product, which raised the drug's estimated
sales potential.
* Incyte (-4.3%, in USD) was unable to advance on the news of positive
clinical results for Ruxolitinib in the treatment of myelofibrosis due to
worries about a rival product in an early stage of clinical development,
which we think are overblown.
* Amylin (-22.7%, in USD) suffered a setback in its development of Bydureon, a
long-acting GLP analog for the treatment of type 2 diabetes. Bydureon did
not meet its primary endpoint in a head-to-head comparison with Victoza
(Novo Nordisk), which led to a downward revision of market expectations
regarding Bydureon.
The strategic overweighting of mid-cap companies was maintained in the first
quarter. With the exception of the Celgene position, all other core investments
were reduced and the resulting proceeds were either reinvested in smaller
positions such as Incyte, Halozyme, Amylin, Isis, and Probiodrug (a private
company) or used for the repurchase of 631'569 BB Biotech shares. In addition,
three new companies were added to the portfolio in the first quarter.
* Dendreon (+7.2%, in USD) has developed a cancer vaccine for the treatment of
hormone-refractory prostate cancer.
* Human Genome Sciences (+14.9%, in USD) received FDA approval for Benlysta, a
drug for treating lupus erythematosus, a serious autoimmune disorder.
* Swedish Orphan Biovitrum (-28.6%, in SEK) is marketing a wide range of drugs
for orphan diseases. The company has promising drugs for treating patients
with bleeding disorders in the pipeline.
BB Biotech's position in Genzyme was closed during the quarter as a result of
the acquisition of Genzyme by Sanofi-Aventis.
Shareholders vote for all proposals put forward by the Board of Directors
All proposals put forward by the Board of Directors at the Annual General
Meeting of March 21, 2011 were approved by a vast majority of shareholders, in
particular the election of Dr Erich Hunziker to the Board of Directors. BB
Biotech stands to benefit from Dr Hunziker's many years of experience as the
Chief Financial Officer and Deputy Head of the Corporate Executive Committee of
one of the world's largest pharmaceutical companies as well as from his profound
knowledge of the healthcare sector. After 17 years on the Board of Directors of
BB Biotech AG, Dr David Baltimore has decided not to stand for reelection for
age-related reasons. BB Biotech is deeply grateful to David Baltimore, who has
served on the Board of Directors ever since the company was founded. His
untiring commitment over the course of nearly two decades was instrumental for
the success of BB Biotech.
Many important milestones expected in 2011
The investment strategy of scaling back core investments while building up
exposure to mid-cap companies will be steadfastly pursued. In addition to the
investment focus on innovative medications, a new theme has been added to the
portfolio: Emerging markets. The Board's resolutions for reducing the discount
will be implemented through the continual share buyback programs.
Many important milestones are expected to be reached this year by the companies
in BB Biotech's portfolio. Besides a slew of clinical data, 2011 will also be a
year of key product launches for portfolio companies. Benlysta was approved by
the US FDA for the treatment of lupus in March 2011, clearing the way for Human
Genome Sciences to begin marketing the product in the second quarter. Other
decisions expected to be announced in the current year by the US FDA include
Optimer's Fidaxomicin, Vertex's Telaprevir and possibly also VX-770, as well as
Ruxolitinib from Incyte. Important clinical data on Celgene's Revlimid that will
be presented at an oncology conference should strengthen the product's profile
and calm market worries regarding side effects. Results of a multiyear study
with Macitentan for the treatment of pulmonary arterial hypertension (PAH) due
for publication at the end of 2011 will have a major impact on Actelion's
future. Micromet will be publishing data on its clinical trials with the
bispecific MT103 antibody in treating patients with refractory ALL.
Ongoing progress in research and development will lead to safer, more effective
drugs and allow unmet medical needs to be addressed. The general public will be
willing to pay appropriate prices for effective healthcare therapies in the
future as in the past. Moreover, the opportunities associated with the
challenges facing healthcare systems in Western countries are complemented by
rapid growth in emerging markets. Therefore, the attractively valued
biotechnology industry continues to offer very interesting investment
opportunities.
The Interim Report as at March 31, 2011 and the video interview with Dr. Daniel
Koller, Head Management Team BB Biotech, can be viewed at www.bbbiotech.com
For further information:
Bellevue Asset Management AG, Seestrasse 16, 8700 Küsnacht, Switzerland
Thomas Egger, Tel. +41 44 267 67 09,teg(at)bellevue.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 1.2 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.
Composition of BB Biotech's portfolio as at March 31, 2011
(in % of securities, rounded values)
CORE HOLDINGS
Celgene 17.9%
Actelion 17.9%
Gilead 13.3%
Vertex Pharmaceuticals 13.0%
SMALL HOLDINGS
Novo Nordisk 6.6%
Incyte 4.9%
Dendreon 3.0%
Micromet 2.6%
Immunogen 2.4%
Halozyme Therapeutics 2.3%
Amylin Pharmaceuticals 2.1%
Alexion Pharmaceuticals 1.9%
Isis Pharmaceuticals 1.9%
Amgen 1.8%
Optimer Pharmaceuticals 1.7%
Biomarin Pharmaceutical 1.7%
Bavarian Nordic 1.0%
Swedish Orphan Biovitrum 0.8%
Affymetrix 0.7%
Idenix Pharmaceuticals 0.5%
Human Genome Sciences 0.4%
Basilea Pharmaceutica 0.3%
Cosmo Pharmaceuticals 0.2%
Intercell 0.1%
Probiodrug (1)) 1.0%
Cosmo Pharmaceuticals put option (long) <0.1%
SWAP agreement on treasury shares <0.1%
Basilea Pharmaceutica call option (short) <(0.1)%
Gilead call option (short) <(0.1)%
Total securities CHF 1 331.7 mn
Liquid funds (net) CHF (132.9) mn
Other assets CHF 12.4 mn
Other payables CHF (22.0) mn
Total shareholder's equity CHF 1 189.1 mn
Treasury shares (in % of company)(2)) 19.7%
1) Unlisted company
2) Correspond to the total of all own shares held in Switzerland, Germany and
Italy including the second trading line
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BB BIOTECH AG
Vordergasse 3 Schaffhausen Switzerland
WKN: AONFN3;ISIN: CH0038389992;
Media Release BB Biotech Q1 2011_21.04.11 (PDF):
http://hugin.info/130285/R/1508158/443043.pdf
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Source: BB BIOTECH AG via Thomson Reuters ONE
[HUG#1508158]
Datum: 21.04.2011 - 07:30 Uhr
Sprache: Deutsch
News-ID 53793
Anzahl Zeichen: 16492
contact information:
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Kategorie:
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