Your browser is out-of-date!

Update your browser to view this website correctly.

Disclaimer
To continue, please select your country of domicile and investor type. Depending on your domicile and the investor type that you select, you will have full or restricted access to the information due to legal reasons.

Retail clients: according to Art. 4 Abs. 2 FinSA

Professional/Institutional investors: according to Art. 4 paragraph 3-5 and Art. 5 paragraph 1 and 3-4 FinSA and Art. 10 paragraph 3 and 3ter CISA in conjunction with Art. 6a CISO

Important

Principles 

By using the website www.bbbiotech.com, you confirm that you have read, understood and accepted the general information provided by the BB Biotech AG as well as these legal provisions. These may be subject to change and the use of the site may be restricted or terminated at any time without prior notice.

No recommendation and/or offer for subscription (or for purchase) and/or redemption (or for sale)

The information, products, data, services, tools and documents contained or described on this site ("website content") are for information purposes only and constitute neither an advertisement or recommendation nor an offer or solicitation (to buy) or redemption (sell) investment instruments, to effect any transaction or to enter into any legal relations.

The financial products mentioned on this site are not suitable for all investors. The information contained on this site does not constitute a financial, legal, fiscal or any other recommendation. Investment or other decisions should not be made solely on the basis of this document. In particular, you should not enter into any investment before you have read the corresponding fund agreement or legal prospectus, the annual and semi-annual reports, the articles of association (as far as they are applicable), as well as all other documents, as required in accordance with local legislation or the regulations applied in the legal jurisdictions or countries in which the corresponding investment fund has been licensed or approved for public offer or sale to the public.rlich sind.

The financial products mentioned on this site are not suitable for all investors. The information contained on this site does not constitute a financial, legal, fiscal or any other recommendation. Investment or other decisions should not be made solely on the basis of this document. In particular, you should not enter into any investment before you have read the corresponding fund agreement or legal prospectus, the annual and semi-annual reports, the articles of association (as far as they are applicable), as well as all other documents, as required in accordance with local legislation or the regulations applied in the legal jurisdictions or countries in which the corresponding investment fund has been licensed or approved for public offer or sale to the public.

In order to determine whether the investment in shares of a certain investment fund meets your specific requirements and matches your envisaged risks, we recommend that you contact an independent financial adviser. Furthermore, we recommend that you consult an independent tax adviser in order to obtain information on the tax regulations relating to a specific investment in your legal jurisdiction and with regard to your personal circumstances. In particular tax treatment depends on individual circumstances and may be subject to change.

As the funds are recognised (ie. registered) but not authorised in the UK, the UK Financial Services Authority's financial services compensation scheme does not apply to investments in the fund but the Financial Services Authority regulated firm approving this document for the purposes of UK regulation has taken reasonable steps to satisfy itself that Bellevue will deal in an honest and reliable way and is so satisfied.

Performance

Past performance is not an indication or guarantee of the future performance of the investment. The value of investments may be subject to fluctuations and, under certain circumstances, investors may not get back the full amount invested. The performance data are calculated without taking account of commissions and costs that result from subscriptions and redemptions and commissions and costs have a negative impact on performance. Changes in foreign-exchange rates may also cause the value of investments to go up or down.

Data protection

By accessing this website you state that you agree with the data protection statement. If you do not agree with this statement you should refrain from accessing any further pages of this website. This statement may be updated at any time. We therefore recommend that you check this statement regularly.

Confirmation

By clicking on "Accept", you confirm that you agree to the legal provisions. Alternatively, you can select "I don't accept" if you wish to leave the website.

US drug pricing legislation drives biotech business to adapt for further innovation

Financial markets remained volatile throughout the third quarter, and the healthcare sector was no exception. The US Inflation Reduction Act (IRA) signed into law in mid-August had an impact on biotech stocks. The IRA establishes a new framework for federal spending on prescription drugs but is not expected to jeopardize US leadership in medical innovation. The Nasdaq Biotech Index ended the third quarter with a slightly positive return of 0.7% in USD, thanks to positive clinical trial results from Alnylam in TTR cardiomyopathy as well as from Eisai/Biogen’s trial of an Alzheimer's drug. BB Biotech shares ended the quarter with a negative return of 6.9% in CHF and 4.7% in EUR. This contrasts with the change in portfolio Net Asset Value (NAV), which increased by 8.3% in CHF, 12.1% in EUR and 4.8% in USD over the same period. Reported net profit for the third quarter of 2022 amounted to CHF 210 mn compared to a net loss of CHF 208 mn in the prior-year period. A direct consequence of the above developments is the significant reduction in the share price premium to portfolio NAV. Investor interest has focused on the continued successful market uptake of drugs launched by mid-sized biotech companies. In the eyes of BB Biotech's Investment Team, the biotech sector is attractively valued and offers attractive investment opportunities.
21.10.2022

Healthcare markets held up in July and August, but sold off in September, ending the third quarter with losses more or less in line with broader markets. The MSCI World Healthcare Index declined 6.7% (in USD), while the Nasdaq Biotech Index (NBI) ended with a small gain of 0.7% (in USD) consequent to acquisitions and positive clinical trial data from Alnylam for TTR and the surprising data from Eisai/Biogen’s newest Alzheimer program. Within the NBI smaller and mid cap biotechnology companies (XBI S&P Biotechnology ETF +6.8%, in USD) outperformed larger cap names during the quarter. The US Inflation Reduction Act (IRA) was signed into law by President Biden in mid-August – resulting in a pause of the pharmaceutical and biotechnology sectors as investors digested the implications. Conclusions have been mixed, ranging from significant concerns about price negotiations and controls to diffidence. BB Biotech believes that the legislation, if it is maintained, will spur innovation so that winners emerge in a more competitive and price-sensitive environment.

BB Biotech’s third quarter 2022 share price performance was -6.9% in CHF and -4.7% in EUR. In contrast, the Net Asset Value (NAV) gained 8.3% in CHF, 12.1% in EUR and 4.8% in USD. The net gain was CHF 210 mn compared to a net loss of CHF 208 mn for the same period in 2021. The solid third quarter numbers brought total share price return for the first nine months of 2022 – including the dividend – to -27.7% in CHF and -22.4% in EUR; in line with European markets but well behind the evolution of the NAV’s deprecation of 9.9% in CHF, 3.3% in EUR and 16.7% in USD. The performance difference is an erosion of the share price premium over NAV, accentuated by exclusion from the SMIM Index on September 16, 2022, which precipitated a sell-off by ETFs. Year-to-date, the net loss was CHF 323 mn compared to a net gain of CHF 141 mn at the same time in 2021. USD/CHF exchange-rate fluctuations contributed 6.8% to performance for the first nine months and 13.4% for the USD/EUR.

Portfolio activity –  New private equity investment

Radius Health was taken private by Gurnet Point und Patient Square for USD 10 per share and one contingency value right of USD 1 per share depending on future sales targets. While at a disappointingly low price, the cash inflow of USD 87 mn increased the investment management team’s flexibility to act on interesting investment opportunities. First, the capital released from Radius was invested privately into Rivus Pharmaceuticals’ Series B financing. The funds will support clinical advancement of HU6, a first-in-class controlled metabolic accelerator designed to treat cardio-metabolic diseases with a focus on obesity. Second, the investment management increased it’s holdings in Celldex. Third BB Biotech increased the holdings in Revolution Medicines as the company progressed two clinical studies for their promising KRAS G12C and RAS-Multi inhibitors.

Encouraging developments at portfolio companies

Positive trial read outs drove our third quarter results. The RNA companies Alnylam (siRNA) and Ionis (antisense RNA) both presented positive results in TTRA amyloidosis patients.

Alnylam reported the APOLLO-B Phase III study of patisiran. Statistically significant improvements were reported among TTRA patients with cardiomyopathies, in the 6 minute walk test at 12 months. This was the first siRNA late stage trial with a clear-cut benefit for patients cardiac manifestations of TTRA.

Relay Therapeutics presented promising results for RLY-4008, a selective FGFR2 inhibitor for treating cholangiocarcinoma patients with FGFR2-driven disease.

Several products from portfolio companies were approved during the third quarter. Incyte won US approval for topical agent Opzelura for forms of vitiligo. Myovant and Pfizer won US approval of Myfembree for pain associated with endometriosis.

The Inflation Reduction Act (IRA)

On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law by President Biden. Key provisions include:

Medicare’s right to negotiate
Certain high-cost, older drugs that lack competition will be subject to repricing 9 years post launch for small molecules and 13 years post launch for biological drugs. The first cohort of Part D drugs will be eligible for negotiation in 2026, followed by a larger number of candidates each year. Part B drug repricing negotiations will start in 2028. Orphan drugs for a single rare disease and drugs from small biotechnology companies that represent >80% of total revenues will be excluded.

Rebates for price increases that exceed inflation
Drug price growth will be tied to inflation. Rebates, or penalty taxes, will be applied for price increases that exceed inflation.

Redesign of Medicare Part D
As soon as 2025, Medicare Part D (which covers mostly oral outpatient products) will be redesigned to limit annual out of pocket spending to USD 2000. A so-called «coverage gap» will be eliminated and out of pocket contribution in catastrophic situations will be shifted entirely to insurance plans and manufacturers, while annual insurance premium growth will be limited to 6% until 2030.

Overall, BB Biotech foresees these changes will affect companies differentially, with a handful of winners and losers. Nevertheless, the US will remain the largest and most attractive market for innovative prescription drugs.

Outlook for the final quarter of 2022

US midterm elections will be on November 8. Healthcare investors will watch for results which suggest strict implementation, or possible revisions of the IRA.

Some of BB Biotech’s small and mid cap portfolio companies will need capital. The investment management team will continue to look out for investment opportunities into novel, fairly valued companies, such as our recent additions Celldex and Rivus Pharmaceuticals.

Although the pandemic phase has transitioned to an endemic model, the spread of SARS-CoV-2 variants of concern will be carefully monitored this fall and winter in the Northern hemisphere. The biotechnology sector will continue to solve problems associated with COVID-19 and continue to bring forward other valuable products for severe and chronic diseases.

The quarterly report of BB Biotech AG as at September 30, 2022 can be downloaded at report.bbbiotech.ch/Q322 or www.bbbiotech.com.

For further information:

Investor Relations
Bellevue Asset Management AG, Seestrasse 16, 8700 Küsnacht, Switzerland 
tel. +41 44 267 67 00
Dr. Silvia Siegfried-Schanz, ssc@bellevue.ch
Maria-Grazia 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

TE Communications AG, Bleichestrasse 11, 9000 St. Gallen, Switzerland, tel. +41 79 423 22 28
Thomas Egger, teg@te-communications.ch

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.