BB BIOTECH AG
BB BIOTECH AG: Tailwind for biotech investors
BB BIOTECH AG / Key word(s): Half Year Results 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 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.
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:
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 Outlook The complete interim report as at June 30, 2017 is available on www.bbbiotech.com For further information: Investor Relations Media Relations TE Communications AG, Bleichestrasse 11, 9000 St. Gallen, Schweiz, Tel. +41 79 423 22 28
Disclaimer Composition of BB Biotech’s portfolio as of June 30, 2017
21-Jul-2017 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. |
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 |
End of Announcement | DGAP News Service |