BB Biotech AG

DGAP-Adhoc: BB BIOTECH AG: Tailwind for biotech investors


DGAP-Ad-hoc: BB BIOTECH AG / Key word(s): Half Year Results
BB BIOTECH AG: Tailwind for biotech investors

21-Jul-2017 / 07:00 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR, transmitted by DGAP
- a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Media release as of July 21, 2017

Interim Report of BB Biotech AG as of June 30, 2017

Tailwind for biotech investors

The half-year results confirm that BB Biotech has resumed its solid growth
trajectory

The total return for BB Biotech shares in the second quarter stood at 4.2% in
CHF, 1.6% in EUR and 9.0% in USD. Net Asset Value (NAV) rose by 3.2% in CHF and
the resulting quarterly profit amounted to CHF 103 mn. This compares with the
profit of CHF 36 mn reported for the second quarter of last year. Whereas BB
Biotech ended the first half of 2016 with a loss, in the current year it
recorded a profit for the period of CHF 478 mn. The takeover of Actelion by
Johnson & Johnson marked the end of one of BB Biotech's most successful
investments. Over the years BB Biotech earned more than CHF 750 mn from its
investment in Actelion. Proceeds from the acquisition were used to increase BB
Biotech's shareholdings in Alexion, Alder, Avexis, Esperion, Halozyme,
Intra-Cellular, Neurocrine Biosciences and Radius Health. There was plenty of
positive company news flow during the period under review, but uncertainty
prevailed on the policymaking front, especially in Washington. The outcome of
Congressional action on the new healthcare law is still uncertain. Consequently,
temporary swings in volatility cannot be ruled out going forward.

Healthcare stocks outperformed the broad equity indices, with the MSCI
Healthcare Index gaining 7.1% and the Nasdaq Biotechnology Index gaining 5.9%
during the second quarter of 2017 (in USD). Local returns in the broader equity
markets were also positive, ranging from 1.2% for the Euro Stoxx 600 (in EUR),
to 3.1% for the S&P 500 (in USD), and 5.1% for the Swiss Performance Index SPI
(in CHF).

Equity trends played out against a backdrop of currency shifts associated with
the political and economic outlook. The US Federal Reserve Bank did take action
on interest rates, the European political landscape stabilized with the French
elections, and ramifications of Brexit (now called Brexodus) began to sink in.
These and other factors drove the value of the US dollar down by more than 6%
against the Euro and by more than 4% against the Swiss Franc, while Sterling
strengthened modestly in the second quarter.

Healthcare stocks, including those in the drug space, were driven by corporate
fundamentals, but also by continued chatter about the potential for US
healthcare "repeal and replace legislation" - which was finally deferred once
more as the Senate failed to move forward with the latest Republican bill. As
the saga plays out, BB Biotech's prediction that US drug pricing policy changes
are more likely to be evolutionary rather than revolutionary seems to be holding
true so far.

BB Biotech Q2 2017 and H1 2017 performance
Total share return for BB Biotech in the second quarter of 2017 was 4.2% in CHF,
1.6% in Euro and 9.0% in USD, reflecting short-term currency fluctuations. The
NAV gained 3.2% in CHF, 0.7% in EUR and 8.0% in USD. Consequently, second
quarter net income amounted to CHF 103 mn, compared to CHF 36 mn for the same
period in 2016.

Total share return for BB Biotech in the first half was 12.2% in CHF, 8.8% in
EUR and 19.4% in USD, while total return for the NAV was 16.1% in CHF, 13.1% in
EUR and 23.5% in USD. Consequently, H1 2017 net income amounted to CHF 478 mn,
compared to a loss of CHF 1 170 mn for H1 2016.

BB Biotech's level of investment, which had been 106.8% at the beginning of the
year and 109.5% at the end of the first quarter declined to a non-leveraged
100.1% by the end of Q2 2017.

These financial data demonstrate that the challenges of early 2016 have been
overcome and that the company is back on a growth trajectory.


BB Biotech's portfolio delivered important milestones
Actelion's share price traded around the USD 280 per share take-over bid from
Johnson & Johnson during the entire Q2 following the official announcement of
the transaction in January 2017. Therefore, closure of the transaction in
mid-June 2017 did not add much to the portfolio performance in Q2. But the
transaction strengthened the cash position substantially. In addition, the
granted dividend, which was paid out as Idorsia shares, got off to a promising
start - trading well on the Swiss stock exchange. Actelion has been a
substantial success for BB Biotech. Over the life time of the investment, BB
Biotech achieved cumulative long term gains well above CHF 750 mn. The team can
be patient in waiting for additional likely M&A activities within the
biotechnology sector going forward.

The biotech sector continued to deliver important new products to the US market.
In all, 23 new drugs were approved in the first six months of 2017, already
surpassing the total number of drugs approved in 2016, which was a somewhat lean
year. In BB Biotech's portfolio, a series of valuable and important products
reached the US market during the second quarter of 2017:
Tymlos (abaloparatide) from Radius Health, a human parathyroid hormone-related
peptide analog, for the treatment of osteoporosis in post-menopausal women at
high risk for fractureIngrezza (valbenazine) from Neurocrine Biosciences, a
VMAT2 inhibitor, for the treatment of tardive dyskinesiaZejula (niraparib) from
Tesaro, a poly ADP-ribose polymerase inhibitor, for the treatment of recurrent
ovarian cancerKevzara (sarilumab) from Regeneron, an antibody targeting the
interleukin-6 receptor, for the treatment of moderate and severely active
rheumatoid arthritis
The Eli Lilly/Incyte JAK inhibitor - Olumiant (baracitinib), being developed for
the treatment of rheumatoid arthritis, received an unexpected complete response
letter of rejection from the FDA. Eli Lilly signaled their intention to work
with FDA officials to clarify options ahead which they say range from re-filing
an NDA to performing additional clinical trials. Olumiant has in the meantime
been approved by the European agency and by the Japanese Ministry of Health,
Labor and Welfare.

Recently approved products got off to promising commercial starts in the US.
Biogen Idec, commercial partner for Ionis' Spinraza (Nusinersen) reported USD 47
mn in sales for the first quarter of launch. Dupixent (Dupilumab) from
Regeneron, approved in the first quarter of 2017, also appeared to enjoy strong
uptake in the first three commercial months based on US prescription data.

Clinical trial results continue to influence valuations of the smaller and
mid-sized portfolio companies. Ionis announced positive Phase III clinical trial
results for Inotersen (IONIS-TTRRX) in patients with familial amyloid
polyneuropathy (FAP). Inotersen demonstrated beneficial effects for both the
modified Neuropathy Impairment Score and for the quality of life questionnaire.
These results lifted Ionis' share price. The news read-through to Alnylam -
expected to report data from an ongoing Phase III study for Patisiran treating
hereditary ATTR amyloidosis - as investors anticipate success of the Patisiran
program. While BB Biotech is looking forward to seeing the data, some investors
are apparently assuming a better adverse event profile for Patisiran over
Inotersen.

Celgene announced positive Phase III trial results for Ozanimod in patients with
relapsing multiple sclerosis. Ozanimod, a selective sphingosine 1-phosphate 1
and 5 (S1P1/5) receptor modulator, demonstrated a reduced annual relapse rate
compared to interferon beta-1a (Avonex). Celgene plans to submit a new drug
application to the US FDA by end of 2017.

Alder reported initial Phase III data for eptinezumab, their monoclonal antibody
inhibiting CGRP, for the prevention of frequent episodic migraine. While the
trial met its primary endpoint, investors focused on the observed effect size
for higher doses of the test medication and concluded the results don't quite
measure up to those of competitors. In light of Alder's need to raise capital,
the data comparison pushed its shares down in price significantly.

Improved capital markets sparked renewed fund-raising activities in smaller and
midcap holdings. During the second quarter, six of the portfolio companies
(Neurocrine, Alnylam, Agios, Avexis, Halozyme and Macrogenics) raised a total of
about USD 1.6 bn in new equity capital. This demonstrates the strength of
capital market conviction in the future of biotech and mirrors BB Biotech's own
optimism about these promising companies.

Portfolio changes
Thanks in large part to cash gains from the Actelion take-over by Johnson &
Johnson, the second quarter of 2017 portfolio turnover was significantly above
last year's average. Excluding the more than 8% change in the portfolio due to
Actelion alone, portfolio adjustments of remaining positions were in line with
the first quarter. BB Biotech did not invest in any new companies during the
second quarter of 2017. Idorsia shares were received as a dividend in kind from
the Actelion - Johnson & Johnson transaction. The remaining shares in Puma
Biotechnology and in PTC Therapeutics were sold as both companies reached their
valuation targets. Shareholdings in Alexion, Alder, Avexis, Esperion, Halozyme,
Intra-Cellular, Neurocrine and Radius Health were increased during the second
quarter. Further profits were taken in Novo Nordisk, Celgene, Regeneron, Ionis,
Kite and Swedish Orphan Biovitrum positions.

Outlook
In the second half of 2017, BB Biotech expects continued US Congressional debate
on healthcare legislation - but also continues to believe that drug price policy
shifts will be more evolutionary than revolutionary. Uncertainty remains,
however, and while the financial community is now accustomed to Presidential
tweets, the future of US healthcare cannot be predicted with precision - and
therefore sporadic volatility should be anticipated. BB Biotech will continue to
monitor discussions, activities and developments very closely. Despite US - and
indeed global - uncertainties regarding healthcare, BB Biotech's long-standing
and successful process of selecting investments in companies which deliver novel
drugs for unmet medical needs with a simultaneous focus on pharmaco-economic
value and evolving pricing policies continues to be an approach which can
deliver excellent returns to BB Biotech shareholders. Overall, the encouraging
progress seen in biotechnology during the first half of 2017 should continue as
portfolio companies move forward with their drug development programs, gain
approvals of important new products, and continue to demonstrate commercial
progress. BB Biotech's confidence and long-term commitment to the biotechnology
sector remain very strong.

The complete interim report as at June 30, 2017 is available on
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 Schanz,ssc@bellevue.ch
Maria-Grazia Iten-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, Schweiz, Tel. +41 79
423 22 28
Thomas Egger,teg@te-communications.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. 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.

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.
 

Composition of BB Biotech's portfolio as of June 30, 2017
(in % of securities, rounded values)

 

Incyte                               12.7%

Celgene                              12.1%

Ionis Pharmaceuticals                10.8%

Radius Health                        6.6%

Gilead                               5.6%

Vertex Pharmaceuticals               5.5%

Alexion Pharmaceuticals              4.7%

Neurocrine Biosciences               4.6%

Agios Pharmaceuticals                4.2%

Novo Nordisk                         4.0%

Tesaro                               3.5%

Halozyme Therapeutics                3.0%

Alnylam Pharmaceuticals              2.8%

Regeneron Pharmaceuticals            2.5%

Sage Therapeutics                    2.1%

Esperion Therapeutics                2.0%

Kite Pharma                          1.9%

Juno Therapeutics                    1.9%

Macrogenics                          1.2%

Myovant Sciences                     1.1%

AveXis                               1.0%

Intercept Pharmaceuticals            0.9%

Swedish Orphan Biovitrum             0.8%

Intra-Cellular Therapies             0.8%

Five Prime Therapeutics              0.7%

Alder Biopharmaceuticals             0.6%

Probiodrug                           0.6%

Prothena Corp.                       0.5%

Idorsia                              0.4%

Novavax                              0.3%

Cidara Therapeutics                  0.2%

Achillion Pharmaceuticals            0.2%

                                      

Radius Health warrants, 04/23/2018   0.1%

Radius Health warrants, 02/19/2019   0.1%

                                      

Total securities                     CHF 3 332.6 mn

                                      

Other assets                         CHF 26.5 mn

Other payables                       CHF (30.0) mn

                                      

Total shareholders' equity           CHF 3 329.1 mn

                                      

                                      

                                      

                                      

                                      
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21-Jul-2017 CET/CEST The DGAP Distribution Services include Regulatory
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Language: English

Company:  BB BIOTECH AG

          Schwertstrasse 6

          8200 Schaffhausen

          Switzerland

Phone:    +41 52 624 08 45

E-mail:info@bbbiotech.com

Internet: www.bbbiotech.ch

ISIN:     CH0038389992

WKN:      A0NFN3

Listed:   Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial
Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart; SIX



 

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594383  21-Jul-2017 CET/CEST
 



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