Bellevue Asset Management

Biosimilars - an imperfect copy but a perfect investment - Seite 3

Who will come out on top?

In summary, sales from biosimilars should compare favorably to the typical sales cycle in the conventional generic drug business, where prices of copy-cat drugs steadily decline due to the large number of competing manufacturers. With biosimilars, the first two or three firms that receive regulatory approval for a particular product will be the dominant players or, in isolated cases, share the market with the originator drug maker. This is especially likely in public tenders where insurers negotiate reimbursement practices based on the "first come, first served" principle.

The market potential for biosimilars is huge. With a number of billion-dollar drugs about to lose patent exclusivity, for example Avastin and Herceptin in the treatment of cancer, or Humira and Enbrel for rheumatism, the fastest growth for biosimilars is still to come. According to estimates from Sandoz, the leading biosimilar drug maker, sales of biosimilars will increase ten-fold to USD 14 bn between 2015 and 2020.

The number of players entering this attractive field is steadily growing. At the global level, they include international pharmaceutical companies, biotech companies and generics manufacturers. There are also numerous specialists active at a regional or local level, especially in developing countries. A number of factors will determine the success of a biosimilar manufacturer. These include: Meeting the minimum technical requirements, setting up cost-effective production capacity, launching a product quickly after a branded drug's patent has expired, and capturing a critical mass of market share.

Biosimilars in BB Adamant's healthcare portfolios

Bellevue has already positioned its fund portfolios to benefit from this trend. The BB Adamant Global Generics (ISIN B-EUR LU1318739486) offers the greatest exposure to biosimilars with more than 30% of its portfolio invested in this theme. Oliver Kubli, Lead Portfolio Manager, speaks about the investment strategy and fund positioning in the recent video update (English subtitle).

Biosimilars have an approximately 20% weighting in the portfolios of the BB Adamant Biotech (ISIN B-USD LU0415392322) and BB Adamant Medtech (B-EUR LU0415391431) funds, and the latter includes companies not only from Europe and North America but also from Asia. About 25% of the Lacuna BB Adamant Asia-Pacific Health (P-EUR LU0247050130) fund's assets are invested in biosimilar manufacturers that operate in Asia-Pacific. This mix of fund products offers investors a range of opportunities for participating in the above-average growth of the biosimilar market.