BB Biotech

Solid fundamental progress in the first quarter 2014 - Seite 2

The share price of BB Biotech increased by double digits in the first quarter 2014 - adding 15.0% in CHF and 15.5% in EUR. These first quarter results included the tax-efficient cash distribution of CHF 7.00 - while the Net Asset Value (NAV) increased 2.8% in CHF, 3.6% in EUR and 3.8% in USD (including the cash distribution of CHF 7.00 per share).

BB Biotech's portfolio continues to perform well based on strong fundamentals
The first quarter performance was driven by drug launches and key clinical data releases from BB Biotech holdings:

• Isis' SMNRx, an antisense compound for spinal muscular atrophy, demonstrated promising Phase II data in infants and children where no other therapies currently exist. The Phase III study is scheduled to begin this year.
• Medivation's Xtandi, which is already approved for post-chemo prostate cancer, presented full Phase III data in the pre-chemotherapy setting at a medical conference. The results demonstrated efficacy and safety, setting it up as a potential preferred drug for these patients.
• Endocyte's Vintafolide, a personalized medicine / drug conjugate therapy, demonstrated positive data in advanced lung cancer and received a positive opinion in Europe for conditional approval in advanced ovarian cancer.
• Gilead launched Sovaldi, a first in class nucleotide analog polymerase inhibitor for the treatment of hepatitis C Virus (HCV) infected patients, in combination with ribavirin for HCV genotype 2 and genotype 3 infected patients, and in combination with peg-interferon and ribavirin for the treatment of HCV genotype 1 infected patients.
• Actelion launched Opsumit, a novel endothelin receptor antagonist (ERA) for the treatment of PAH, with a highly differentiated product label compared to the currently marketed ERAs.
• Pharmacyclics/JNJ received an extended label for its bruton's tyrosine kinase inhibitor Imbruvica for the treatment of patients with CLL (chronic lymphocytic lymphoma).
• Celgene received FDA approval for Otezla, making it the first oral drug approved for active psoriatic arthritis.

Following strong 2013 performance, Celgene's shares underperformed in the first quarter due to a court hearing overhang regarding its lead drug Revlimid and lack of major catalysts to start 2014. Gilead received a letter from three US Congress Members requesting justification of the pricing of Sovaldi. While Gilead's response is awaited, BB Biotech believes the pricing reflects the strong clinical profile of the drug. Clinical uptake and financial data for the launch has exceeded expectations. Nonetheless, the controversy on pricing may have fueled the sector correction in March. BB Biotech believes that the fundamentals of the sector are intact and valuations remain attractive.