BBMEDTECH

euro adhoc: BB Medtech AG
Annual Reports
Preliminary Annual Report as at December 31, 2002 (E)

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Press Release January 28, 2003

Against the trend

The year 2002 was characterized by major uncertainties and sharp price declines on European and US stock markets. Key market indices such as the S&P 500, Nasdaq, DAX or SMI shed between 23% and 47% of their value. Even the largely non-cyclical medical technology sector came under pressure, with the S&P Medical Devices Index falling by 13% (28% in CHF) and the World Healthcare Index losing 22% (36%). Thanks to our highly focused selection of stocks, BB MEDTECH managed to buck this negative trend to some extent. The Net Asset Value of our share, declined by 4.9% in CHF (in EUR by 2.8%). However, due to the poor sentiment prevailing on the stock markets, the discount of the company’s share price in relation to its Net Asset Value widened to approx. 15%. Accordingly, the price of BB MEDTECH’s shares at end-2002, at CHF 21.95 (EUR 14.80), was down by 13.6% (by 9% in EUR) year-on-year.

To enable us to react more flexibly to a hoped-for recovery of the market environment, in the course of the year we adopted measures to secure BB MEDTECH’s long-term growth potential. These included the withdrawal from the rather cyclical laboratory equipment sector and an increased focus on major established companies featuring a wide product portfolio, stable growth prospects and run by an experienced management.

The fact that there are shares that can successfully oppose a trend even in difficult conditions is reflected by our key holding, Nobel Biocare. The 29% stock price increase in the course of the year boosted the proportion of our total portfolio accounted for by this position to 72.8%. This performance indicates that the company managed to reach or even exceed its predefined targets. Thanks to its successful restructuring, the company’s operating profit was boosted substantially. Further significant improvements in profitability are anticipated for 2003. Moreover, in launching a completely new product line and a new, integrated marketing strategy, the company is well positioned for accelerated growth in future.

The share performance of other core holdings (whose weightings were reduced, however), remained below our expectations. Nevertheless, Synthes-Stratec and St. Jude Medical, market leaders in the fields of osteosynthesis and cardiology, respectively, continue to rank among our favorites. Newcomers to our portfolio include Swiss hearing-aid manufacturer Phonak and the German Drägerwerk, specializing in anesthesia systems and intensive care equipment. Both companies have new managers at their helm, with a proven track record of enhancing profitability to a substantial degree. Our holdings in Zimmer and Centerpulse were sold in the final quarter. Since only some of the proceeds generated by this sale were reinvested, our liquid assets came to CHF 66 mn at the end of the year.

Several changes are on the cards for BB MEDTECH’s Board of Directors this year. Following two years’ successful, active cooperation in helping to shape the future of Nobel Biocare, the time has now come for a concentration of powers. Heliane Canepa will not stand for re-election at BB MEDTECH to enable her to devote her full attention to running Nobel Biocare. Simultaneously, Hansjörg Wyss, majority shareholder and Chairman of the Board of our core holding Synthes-Stratec, will terminate his activity on our Board. We will present new candidates for election at the General Meeting.

The long-term prospects for investors in the field of medical technology and in the health industry as a whole remain intact on a sustained basis. We are confident that our existing holdings represent an excellent combination of long-term growth potential and solid earning capacity. Furthermore, today’s low valuations on the stock markets selectively offer a great deal of scope for fresh investments.

The composition of BB MEDTECH’s portfolio as at December 31, 2002 is the following:

CORE HOLDINGS
Nobel Biocare                                 72.8%
Synthes-Stratec                                4.3%
St. Jude Medical                              2.8%

SMALL PARTICIPATIONS
Baxter                                              1.5%
Drägerwerk                                        0.7%
Phonak                                              0.7%
Pozen                                                0.5%
Durect                                              0.4%

Liquid funds                  16.6%
Securities and Liquid funds: CHF 399 mn

The preliminary annual report is available on www.bbmedtech.com. The full annual report will be published mid of March.

end of announcement            euro adhoc 28.01.2003
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Further inquiry note: For further information please contact: Bellevue Asset Management, Grafenauweg 4, 6301 Zug, Switzerland Edwin van der Geest, Tel. +41 41 724 59 59.

Branche: Pharmaceuticals
ISIN:      CH0000428661
WKN:        898194
Index:    Investment Index (IGSP), Nemax All Share
Börsen:  Frankfurter Wertpapierbörse / Neuer Markt
              SWX Swiss Exchange / official dealing



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