Industry Voice: Biotech - double-digit return for 2017

clock
Industry Voice: Biotech - double-digit return for 2017

With a total return of 23.1% in CHF and 13.1% in EUR buoyed by the euro's substantial appreciation against the dollar, BB Biotech delivered a strong performance in 2017 and will propose a record regular dividend of CHF 3.30 per share .

With a total return for BB Biotech's shareholders of 23.1% in CHF and 13.1% in EUR buoyed by the euro's substantial appreciation against the dollar, BB Biotech delivered a strong performance in 2017. The underlying portfolio performed well, ending the year up 23.4% in CHF, 12.5% in EUR and 29.2% in USD - which is 7.5% ahead of the Nasdaq Biotech Index (NBI).Consolidated, but not yet audited, full year 2017 data showed a net gain of CHF 688 mn. Continuing the 5% dividend policy based on the average December 2017 share price, BB Biotech will propose a record regular dividend of CHF 3.30 per share at the AGM.

Multiple product approvals for 2017

The US FDA approved 12 new drugs in the fourth quarter 2017, bringing the total number of approvals for the year to 46, more than in any of the previous 20 years. The majority of these approvals were granted to biotechnology companies.

A proposed dividend of CHF 3.30 per share

The Board of Directors will propose a record regular dividend of CHF 3.30 per share at the general assembly on March 13, 2018. This is computed as a 5% dividend yield applied to the average share price during December 2017 - consistent with the dividend policy introduced in 2013. Compared to the stocks on the FTSE 100, BB Biotech ranks in the top 20%  in terms of dividend yield. This makes it an option, which is really worth considering at a time of record low interest rates on fixed-income investments

Three new companies added to the portfolio

Following management's late year strategic review, new positions were opened in Wave Life Sciences, Voyager Therapeutics and Akcea Therapeutics. Wave Life Sciences develops stereo-selective nucleic acid therapeutics with a focus on severe neurological diseases. Voyager is developing a gene therapy for advanced Parkinson's disease and Akcea is addressing serious rare lipid disorders with antisense products.

Outlook - promising 2018 with an expectation for continued product approvals

BB Biotech believes that 2018 will continue to bring important product approvals and milestones for the sector and for its portfolio. The FDA continues to improve the efficiency of the drug review process - and candidate drugs which address serious and unmet medical needs are expected to move through the process expeditiously.

BB Biotech anticipates continued debate around the US Affordable Care Act. One major change to the Affordable Care Act was included in the new tax bill which passed in late 2017 - namely the repeal of the individual mandate - and this will likely reduce the pool of insured individuals. After 2018, healthy and younger individuals will be allowed to opt out of healthcare insurance plans without financial penalty - and this may put pressure on premiums for those remaining on plan.

As predicted, concerns around drug pricing restrictions by the US government are sporadic more than systematic. But BB Biotech continues to monitor potential changes, particularly with the anticipated appointment of Alex Azar as the Secretary of Health and Human Services. Azar is a former drug company executive who is considered a pragmatist and pro-innovation and pro-competition actor.

Biotechnology valuations are attractive at current levels. The financial aspects of the US tax reform bill - including lower corporate tax rates and allowances for repatriation of ex-US cash may presage both improved and simplified balance sheets for US large cap pharma and perhaps an uptick in M&A activities in biotechnology.

More fundamentally and therefore importantly, BB Biotech expects the biotechnology sector to grow based on its ever increasing strengths of innovation and an increasing share of novel drugs in 2018 and beyond. It looks forward to another productive and exciting year in 2018. BB Biotech remains dedicated to identifying leading-edge biotechnology firms developing market dominant drugs based on cutting-edge technologies.

Read more

Disclaimer:
BB Biotech will publish its complete annual report 2017 on February 16, 2018.

For more information, please contact:
Claude Mikkelsen
[email protected], +44  203 326 29 83, www.bbbiotech.com

Disclaimer
Bellevue Advisors LLP is an appointed representative of Mirabella Advisers LLP, which is authorised and regulated by the Financial Conduct Authority. This advertisement is directed at professional clients and eligible counterparties as defined by the FCA in the UK only. Past performance is not indicative of future results.

More on Technology

Phil Kent of GCP Infrastructure Investments

Are high energy prices a sign of things to come?

UK's decarbonisation commitments part of the issue

Phil Kent
clock 18 October 2021 • 4 min read
YT Boon: Semiconductor shortage is fixable but it will take a long time

YT Boon: Semiconductor shortage is fixable but it will take a long time

The ongoing semiconductor shortage is set to continue for years but is a “fixable” issue that will not plague 5G for its entire lifespan, according to manager of the Neuberger Berman InnovAsia 5G fund YT Boon.

James Baxter-Derrington
clock 28 September 2021 • 2 min read
Blockchain is a fast-growing industry

Is the future of blockchain Irish?

Country is in a unique position

Dr Nicola Stokes
clock 17 September 2021 • 4 min read