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euro adhoc: BB Biotech AG
Quarterly or Semiannual Financial
- BB BIOTECH up 15% in first semester
- convincing biotech revenues and pipeline results
- dynamic growth set to continue
- Board of Directors adopts measures to reduce discount (
--------------------------------------------------------------------- Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement. ---------------------------------------------------------------------
The dynamic trends prevailing in the biotech industry in the first half of the year had a positive impact on BB BIOTECH and returned the company to a long-term growth path. BB BIOTECHs Net Asset Value surged by CHF 282 million in the first half of the year, or 15%, to reach CHF 79 per share. As the discount of the companys stock price in relation to its Net Asset Value still amounts to a high 18% even though sentiment on the stock markets has returned to normal, the Board of Directors has decided to take measures to bring the stock price back to the bandwidth of +/- 10% in relation to the Net Asset Value, which had been in place for many years.
In the first half of the year, the biotech sector had a strong showing with numerous positive and fundamentally important events. The industry leaders - in particular, Amgen, Genentech and MedImmune - delivered exceptionally strong quarterly figures in terms of medication revenue and earnings growth. In addition, confidence in the industry was supported by the FDA approvals and outstanding clinical data presented at various healthcare conferences throughout the world. For instance, approval of the nasal influenza vaccine FluMist developed by MedImmune and the earlier-than-expected approval of the Millennium product Velcade (for treatment of multiple myeloma) helped to speed up the FDAs approval procedures for new, innovative products. In the field of clinical studies, the clinical data presented by Genentech at the annual meeting of ASCO (American Society of Clinical Oncology) on the Avastin medication for treatment of intestinal cancer were among the most outstanding accomplishments in recent years. In the first half of the year, Actelion - one of our portfolio companies - reached positive earnings territory for the first time, joining the growing field of biotech companies operating profitably. Moreover, the industry continued to receive significant funding from the cooperative ventures with partners in the pharmaceuticals industry. One example of this is the cooperation agreement between our portfolio company Pozen and GlaxoSmithKline for the development of a new migraine medication. In total, these drive factors generated a substantial upward push for the entire biotechnology sector.
In the first half of the year, BB BIOTECH stuck to its proven, conservative investment strategy geared to long-term growth. Moreover, to reduce the high market volatility, selective hedge positions were reinforced. The companys Net Asset Value and stock price rose by 15% in CHF (8% in EUR). In relative terms, a comparison of the performance of BB BIOTECHs Net Asset Value with the performance of other relevant indices conveys a mixed impression: the first quarter was good, whereas in the second we did not manage to fully participate in the biotech sectors strong development. In the long term, however, BB BIOTECHs Net Asset Value performed better since the companys establishment in 1993 than all relevant biotech indices and outperformed the key Amex Biotech (BTK) Index by as much as 38%. With net assets amounting to CHF 2 052 million at the end of the period under review, BB BIOTECH is among the biggest institutional investors in the biotechnology sector.
In the first half of the year, new additions to our portfolio were Celgene and NPS Pharmaceuticals, and we reinforced our holdings in MedImmune and Serono. We divested ourselves from Adolor, CV Therapeutics, Cubist, Endo Pharmaceuticals, Neurocrine, Transkaryotic Therapies and Regeneron since the evaluations of several of these companies either exceeded the price targets we fixed or the programs adopted were not in line with our expectations. The company 3-Dimensional Pharmaceuticals was taken over by Johnson & Johnson. In addition, two mergers were announced relating to our portfolio: IDEC Pharmaceuticals is planning a merger of equals with Biogen, and Cell Therapeutics wants to acquire Novuspharma.
The biotech industry is likely to continue on its dynamic long-term growth path. BB BIOTECH is well positioned to participate in this trend.
Discount must return to +/- 10% band: Board of Directors adopts measures Furthermore, the Board of Directors determined that the discount of the companys stock price in relation to BB BIOTECHs Net Asset Value still reflects an extent never witnessed in the previous 10 years. In view of the sectors bright long-term outlook, BB BIOTECHs good long-term performance and the normalization of the stock markets, this discount is unwarranted. Accordingly, major efforts will be made in the second half of the year to return the companys stock price to the usual bandwidth of +/- 10 per cent in relation to its Net Asset Value.
Stimulating demand In order to give an additional boost to demand on the market for BB BIOTECH shares, with immediate effect the composition of the portfolio will be published each month as long as the discount exceeds 10%. This will make the development of BB BIOTECHs Net Asset Value more readily calculable in the short term, which may attract new shareholder groups such as hedge funds, for instance.
Further we will intensify our cooperation with various banks in Switzerland, Germany, Italy and Benelux to place our shares. Moreover, the Board of Directors and the management team will use intense communication and investor relations activities to increasingly convince investors with a long-term view of the biotech industrys attractiveness.
or adjusting supply If these measures do not succeed in bringing the discount below the 10% level on a sustained basis by the end of 2003, the companys supply will need to be adjusted to demand on the market. In this case, the Board of Directors will present appropriate proposals for measures to the Shareholders Meeting (scheduled for April 2004).
The composition of BB BIOTECHs portfolio as at July 31, 2003 is the following:
CORE HOLDINGS Amgen 29.9% MedImmune 19.7% IDEC Pharmaceuticals 11.7% Serono 6.8%
SMALL PARTICIPATIONS Actelion 6.1% The Medicines Company (TMC) 6.0% Pozen 2.3% Shire Pharmaceuticals 1.6% Celgene 0.7% Virologic 0.6% Cell Therapeutics 0.5% NPS Pharmaceuticals 0.5% Durect 0.3%
PRIVATE PARTICIPATIONS Theravance (before Advanced Medicine) 1.6% EyeTech Pharmaceuticals 1.3%
Liquid funds: 10.7% Securities and Liquid funds: CHF 2 186 Mio.
end of announcement euro adhoc 07.08.2003
Further inquiry note: Bellevue Asset Management AG, Seestrasse 16, CH-8700 Küsnacht/Zürich Dr. Christian Lach or Edwin van der Geest, Tel. +41 1 267 67 00
Index: Investment Index (IGSP), Prime Standard, TecDAX
Börsen: SWX Swiss Exchange / official dealing
Frankfurter Wertpapierbörse / regulated dealing