BB BIOTECH AG
BB BIOTECH AG: Product approvals and solid company results lead the biotech sector higher
BB BIOTECH AG / Key word(s): 9-month figures Media release as of October 20, 2017 Interim Report of BB Biotech AG as of September 30, 2017 Product approvals and solid company results lead the biotech sector higher BB Biotech closes the third quarter with a double-digit performance in Swiss francs Several factors helped to make the third quarter a pleasing one for the sector and BB Biotech. Uncertainty regarding government price controls in the US subsided and biotech companies reported solid quarterly results and new product approvals. The US FDA has already approved more drugs this year than all of last year. There was another major acquisition with Gilead’s purchase of Kite Pharma. If the proposed US tax reform is passed, M&A activity is likely to pick up. In the third quarter, BB Biotech’s shares rose by 10.7% in CHF, 6.4% in EUR and 9.6% in USD. In the first nine months of 2017, BB Biotech achieved a total return of 24.2% in CHF, 15.7% in EUR and 30.8% in USD. Net profit amounted to CHF 365 mn for the third quarter and CHF 843 mn for the first nine months. This compares with the profit of CHF 392 mn reported for the third quarter of last year and a loss of CHF 778 mn for the first nine month of 2016. During the third quarter US equity markets increased by around 5% (S&P Index 4.5%, Dow Jones Index 5.6% and Nasdaq Composite Index 6.1%), driven by solid corporate results and a continued favorable interest rate environment. European stocks increased by around 3% (DAX 4.1%, SMI 2.9%). Healthcare stocks traded higher – including a 7.7% increase in the Nasdaq Biotechnology Index. For the same period, BB Biotech shares gained 10.7% in CHF, 6.4% in EUR and 9.6% in USD. Gains by equities, including BB Biotech’s stock, were opposed by currency fluctuations. For the third quarter, the US Dollar fell a further 3.4% versus the Euro, while gaining 1.1% versus the Swiss Franc. That brings currency headwinds for the year to -12.3% for the US Dollar against the Euro and -5.0% against the Swiss Franc. Positive environment Like others, BB Biotech was encouraged by the appointment of Dr. Scott Gottlieb as Commissioner of the FDA and is not disturbed by the recent resignation of Gottlieb’s superior, Tom Price, as HHS Secretary. The FDA has already approved more new drugs so far in 2017 than in all of 2016. Several factors drove favorable biotech performance during the third quarter. High-revenue companies reported solid Q2 2017 results. A significant number of products achieved regulatory approval, and progress was reported for a range of potentially valuable clinical candidates. Perhaps more significantly for the long-term outlook, the industry announced major breakthroughs with new approaches to medicines, including advancements with RNA-based drugs, novel gene therapies, cell-based therapies, and novel formats of antibodies. There are more exciting technologies on the horizon which offer potential transformative innovations, examples of which are gene editing CRISPR/Cas technology, and novel RNA-based therapies beyond antisense and RNA-interference. Merger and acquisition trends Third-quarter 2017 and year-to-date 2017 performance For the first nine months of 2017, BB Biotech’s share return is 24.2% in CHF, 15.7% in EUR and 30.8% in USD. The NAV performance was better, with total returns of 28.8% in CHF, 20.2% in EUR and 35.6% in USD, well ahead of the NBI’s total return of 26.5% in USD. Both the share and NAV returns include the dividend payment of CHF 2.75 per share that was paid on March 22, 2017. For the year-to-date 2017 period, value appreciation of portfolio investments led to a net profit of CHF 843 mn compared to a loss of CHF 778 mn for the same period in 2016. Pipeline highlights and product updates from portfolio companies Vertex reported positive data from Phase I and Phase II studies of three investigational triple combination regimes for cystic fibrosis patients with one F508del mutation and one minimal function mutation. The data suggest that these investigational combinations may treat the underlying cause of cystic fibrosis in severe and difficult-to-treat types. Given the significant market opportunity for these combination regimens, Vertex’s shares also increased substantially. By contrast, Sage Therapeutics reported failure of brexanolone in super refractory status epilepticus. Investors have made substantial bets on the strength of this potential indication – but BB Biotech managers were more cautious about such high expectations and had sold a substantial part of the position prior to the news. After the news, BB Biotech reacquired Sage shares at a lower price given its belief in the ultimate potential for brexanolone in post-partum depression. Some of the portfolio holdings experienced volatility as the FDA enabled greater access to its Adverse Event Reporting System on the last day of September. The FDA move should ultimately support transparency regarding innovation, but for the short term, misinterpretation of the data may have effects on share prices. BB Biotech’s investment in Intercept is an example here. The FDA disclosed all safety data in its reporting system for Intercept’s product Ocaliva, which is used for severe liver disease. The newly released FDA data included previously unknown adverse events associated with higher-than-recommended dosages of the product. Investors overreacted and BB Biotech subsequently added to its Intercept position. Product approvals from the portfolio holdings Novo Nordisk’s Fiasp (fast-acting insulin aspart) was also approved by the FDA. This is a new fast-acting mealtime insulin for adult diabetics. Novo’s share price has also been spurred by the expected approval of Semaglutide, a once weekly GLP-1 analogue. If approved in 2017, Semaglutide will extend Novo Nordisk’s GLP-1 franchise and allow them to compete more effectively against Eli Lilly’s Trulicity. However, if approved, BB Biotech anticipates a slow uptake of Semaglutide and stiff price competition in the US market place. Merger and acquisition activities within BB Biotech’s portfolio License deals BB Biotech provides fresh capital for companies Few portfolio changes in the third quarter Outlook for the sector and the portfolio Significant potential milestones for the remainder of 2017 include: – FDA approval for Semaglutide for treating type 2 diabetes patients (Novo Nordisk) – FDA approval for Axicabtagene Ciloleucel for lymphoma patients (Gilead/Kite) – Phase III data for Brexanolone for treating postpartum depression (Sage Therapeutics) – Phase III data for Revlimid in lymphoma patients (Celgene) – Phase I/II data Ivosidenib for relapse refractory AML patients (Agios) In addition, investors are focused on important, ongoing commercial launches including Spinraza for spinal muscular atrophy (Biogen and Ionis), Ocaliva for primary biliary cholangitis (Intercept), Zejula for maintenance treatment of recurrent epithelial ovarian cancer (Tesaro), and Ingrezza for tardive dyskinesia (Neurocrine). Revenue growth of these drugs will drive profit forecasts and share price valuations for these companies. Overall, BB Biotech believes that the encouraging progress in biotechnology during the first nine months of 2017 will continue for the rest of 2017 and into 2018. Management anticipates more progress with exciting drug development programs, new approvals and commercial progress of marketed products. The complete interim report as at September 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 September 30, 2017
20-Oct-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 |