BB BIOTECH AG

Outlook for the biotech sector remains positive despite sell-off - Seite 2

Dividend of CHF 14.50 per share proposed for 2015 fiscal year 

In line with the distribution policy established in 2013, the Board of Directors will propose a distribution of CHF 14.50 per share at the Annual General Meeting on March 17, 2016, which corresponds to a 5% yield based on the volume-weighted average price of BB Biotech shares in December 2015. This marks another significant increase of 25% compared to the previous year. The remaining paid-in capital reserves of around CHF 136 mn will be distributed with the difference to be paid out as a regular dividend from retained earnings.

Five-for-one share split proposed

A five-for-one share split is being proposed in the light of BB Biotech's strong performance of +461.4% (in CHF) over the past five years and the positive prospects for its investment portfolio. The number of fully diluted outstanding shares will increase from 11.85 million to 59.25 million, excluding shares repurchased on the second trading line.

Portfolio changes in the fourth quarter and throughout 2015

Trading activity in the fourth quarter was significantly below prior quarters. Three takeovers alone, Pharmacyclics, Synageva and Receptos, had a significant impact on BB Biotech's portfolio and generated CHF 541 mn in cash in the first nine months of 2015. The small holdings in Immunogen, Theravance and Theravance Biopharma were also sold during the course of 2015. Meanwhile BB Biotech added eight new small and mid-cap positions over the year and increased many of its existing shareholdings.

The level of investment fluctuated in relation to the underlying sector performance. At the beginning of 2015 BB Biotech's cash position was zero whereas in the summer, when the biotech sector was trading at its high, the cash position was about 5%. Afterwards, during the ensuing correction, BB Biotech built up new investments and traded back into existing positions, which led to an investment level of 104% by the end of the year.

At the end of 2015, BB Biotech's portfolio consisted of six core holdings, each accounting for more than 5% of portfolio assets, namely Celgene, Incyte, Ionis Pharmaceuticals (formerly Isis), Actelion, Gilead and Radius Health. BB Biotech's investment portfolio comprises 34 positions in all.

Two new positions were added during the fourth quarter of 2015 - Sage Therapeutics and Cidara Therapeutics. Sage is focused on central nervous system (CNS) disorders with its lead pipeline candidate SAGE-547 under development to treat super-refractory status epilepticus. Cidara is developing novel anti-infectives, including their lead product CD101, a novel molecule from the echinocandin class, for the treatment of systemic Candida infections.