BB Biotech says it had to weather the storm last year

Added 17th February 2017

BB Biotech managed to “weather the storm” that gripped the biotech sector in 2016 and beat its benchmark index, according to its latest annual report.

BB Biotech says it had to weather the storm last year

With heightened volatility in markets before and after the US presidential election and large-cap biotech stocks trading at near record lows, the sector as a whole suffered big losses last year with the Nasdaq Biotech Index down 21.3%.

However, while suffering from the downturn with its net asset value down more than 20%, BB Biotech reported it share price managed to beat the index by 19.9% in US dollars.

In its report it said: “Large cap biotech stocks were trading near record-low price/earnings multiples as the year came to an end; mid and small caps experienced an even greater valuation contraction. None of these stock market developments were attributable to any adverse changes regarding biotechnology itself or to the fundamental news flow from biotech companies.”

A key trend that favours the biotech industry, the firm said, was the purchasing of biotech products by pharmaceutical firms looking to keep their product list growing which has resulted in a steadily maturing industry that is still managing to meet expectations in drug development and growth.

In a letter to shareholders, the firm revealed it had added to its positions in Juno and remained optimistic on the prospects for Alnylam, but trimmed back on Actelion based on an evaluation of the risk against returns and used the proceeds to invest into a new portfolio addition, Myovant.

The letter said: “With biotechnology valuations at very attractive levels, more acquisitions by large players, including pharmaceutical firms, are expected. Actions of the incoming presidential administration in the

US may accelerate this likely trend – and BB Biotech expects investors to follow suit. Repeal and replacement of the Affordable Care Act (ACA) will be front and centre throughout the year, and there may be choppy reactions to possible drug price controls or moderation in the US.

“Despite these transitional events that may cause near-term volatility, BB Biotech remains strongly convinced that the future of the biotechnology industry is bright.”

It added that BB Biotech had “strengthened its market position” despite the difficult stock-market environment and proposed a regular dividend of CHF 2.75 per share, equivalent to a 5% dividend yield based on its average share price in December 2016.


Overseas earners will be key amidst 2017 inflation

Sponsored by Neptune

Overseas earners will be key amidst 2017 inflation...

A by-product of sterling weakness is inflation, and we expect this to continue to gather steam over the coming months, with energy and food prices the hardest hit....

Kames Income Hub


Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

Square Mile Research

AXA Distribution Fund
AXA Distribution Fund

Talking Factsheets is a video service for users...

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address



Investment Strategy




PA Alternative Ucits 2017 Congress
PA Alternative Ucits 2017 Congress

Tuesday 25 April
The Langham, London

PA Europe 2017
PA Europe 2017

Thursday 11 May
Furniture Makers' Hall

PA Channel Islands 2017
PA Channel Islands 2017

Wednesday 24 May
Royal Yacht Hotel, Jersey

PA UK Equity 2017
PA UK Equity 2017

Thursday 15 June
Radisson Blu Edwardian Bloomsbury Street Hotel

Sponsored Content

Investment Strategy