BB Biotech AG

December was a negative month for the biotech sector. The Nasdaq Biotech Index was down by 2.9% (in USD) in December, BB Biotech´s share price was negative by 7.1% (in CHF) and Net Asset Value was negative by 6% (in USD) during the same period. This is a reversal of the positive trend seen in October and November.

2022 has been a turbulent year on a macro level directly affected by the war in Ukraine, growing inflation, interest rates as well as a number of other negative contributors. The broader stock market had a rough year in 2022 with European and US stock indices down by double-digit percentage points. The biotech sector was no exception to the negative performance in 2022 and especially small and mid cap stocks were hit hard whereas some of the large cap companies have held up better in a turbulent macro environment. Fundamentals in the biotech sector remain strong and we are seeing many positive developments across our portfolio of companies.

We remain optimistic that growth equities will come into favor again and that we will continue to see fundamental progress in the innovative companies that occupy our portfolio.

We have highlighted some of the news from December from our portfolio companies below.
 
Wave Life Sciences (+65.1%, in USD) and GSK announced on December 13 a strategic collaboration to advance oligonucleotide therapeutics, including Wave’s preclinical RNA editing program targeting alpha-1 antitrypsin deficiency (AATD), WVE-006. Under the terms of the agreement, Wave will receive an upfront payment of USD 170 mn, which includes a cash payment of USD 120 mn and a USD 50 mn equity investment. For the WVE-006 program, Wave is eligible to receive up to USD 225 mn in development and launch milestone payments and up to USD 300 mn in sales-related milestone payments, as well as tiered sales royalties. Development and commercialization responsibilities will transfer to GSK after Wave completes the first-in-patient study. For each of GSK’s eight collaboration programs, Wave will be eligible to receive up to USD 130 - USD 175 mn in development and launch milestones and USD 200 mn in sales-related milestones, along with tiered sales royalties.

Moderna (+2.1%, in USD) and its partner Merck announced on December 13 that the Phase IIb trial of mRNA-4157/V940, in combination with KEYTRUDA® demonstrated a statistically significant and clinically meaningful improvement in the primary endpoint of recurrence-free survival (RFS) versus KEYTRUDA alone for the adjuvant treatment of patients with stage III/IV melanoma following complete resection. The companies plan to discuss the results with regulatory authorities and initiate a Phase III study in melanoma patients in 2023. In October 2022, the companies announced that Merck had exercised its option to jointly develop and commercialize mRNA-4157/V940. Merck and Moderna will share costs and any profits equally under this worldwide collaboration.

Neurocrine (-6.0%, in USD) announced on December 6 that NBI-827104 did not meet its primary endpoint in the phase II STEAMBOAT study evaluating the efficacy, safety, tolerability and pharmacokinetics of NBI-827104 compared to placebo in pediatric patients with epileptic encephalopathy with continuous spike-and-wave during sleep (EE-CSWS). NBI-827104 was generally well tolerated.

We are looking forward to an interesting year ahead with several key milestone
events including new drug approvals and launches from a number of BB Biotech’s portfolio companies. We remain optimistic that growth stocks will come back in favour and that BB Biotech’s portfolio of biotech companies will continue to show fundamental progress on various fronts.