Another outstanding year for BB BIOTECH

Thursday, 25. January 2007 07:30



During 2006, BB BIOTECH's share price increased by 19% (in CHF,
including a dividend paid of CHF 1.80), while the Net Asset Value
(NAV) increased by 16% (in CHF). This represents the fourth year in a
row of double-digit performance, and is well on track with the
biotech industry's long-term 10% to 15% annualized growth trajectory.
The main contributor to the performance in 2005 was strong
performance of BB BIOTECH's core portfolio positions, out-weighting a
negative currency effect from the USD. In 2006, BB BIOTECH achieved
an out-performance of its NAV against the broad Nasdaq biotech index
of 25%, adding to the significant out-performance of the Company.
Since its inception in 1993, BB BIOTECH's share price has risen by
11.8% p.a. in CHF, and it's NAV has increased by 14.3% p.a. in USD.

Our portfolio companies once more delivered strong operational
performances, including commercial success as well as key pipeline
developments. Our core holding Actelion achieved stunning growth
rates with its key product Tracleer growing by over 40%. The company
reported positive clinical trial results for early use of Tracleer in
pulmonary hypertension patients, what should support Tracleer's
franchise going forward. In December 2006, Actelion disclosed initial
efficacy and safety results for one of its pipeline products called
Actelion-1, which is already well progressed in clinical development
and could become an important drug for the treatment of a variety of
cardiovascular diseases. In summer, Actelion signed a landmark deal
with Roche about another pipeline product called S1P1, which
demonstrated the company's quality and success in its earlier stage
drug development.
Our second most important holding Celgene successfully launched its
core product Revlimid in multiple hematological indications, while
its established product Thalomid maintained a strong position in the
market. We expect Revlimid to become the dominant drug for a number
of cancer therapies. Biogen Idec and Elan Pharmaceuticals achieved
the approval of their drug Tysabri in Europe for treatment of
multiple sclerosis and were allowed to re-launch the drug in the USA
for the same indication, reversing the surprising withdrawal of the
drug from the market in February 2005.
We increased our holding in Vertex Pharmaceuticals, because we became
increasingly confident that Vertex' drug VX950 will become a very
important drug for the treatment of Hepatitis C.
Our long term holding The Medicines Company enjoyed a very positive
performance based on strong revenue growth of its key product
Angiomax and based on the possibility of an extension of a patent
covering Angiomax.
On the flip side, our portfolio company Affymetrix experienced a
difficult year, mainly due to issues with the launch of a new
generation of DNA arrays, which allowed competitors to take market
share from the company.

During 2006, we invested in several new positions including
Zymogenetics, Roche, Basilea Pharmaceutica, Arena Pharmaceuticals and
Affymax. We divested holdings in Sepracor, OSI Pharmaceuticals,
Theravance and Auxilium Pharmaceuticals.

In 2006, the discount - the difference between the share price and
the Net Asset Value of BB BIOTECH - narrowed further to 8.9% (in CHF)
at the end of the year. Our share buy back program and the
cancellation of 1.8 mn shares contributed to the positive
development. We remain committed to our activities aimed at closing
the disocunt. Consistent with the dividend model we introduced in
2004, the Board of Directors will propose at the annual shareholder's
meeting on March 26, 2007 to pay a dividend of CHF 2.00.

Due to the strong growth of the revenues and earnings of the
biotechnology companies, valuation parameters like the PEG ratio have
decreased to very attractive levels, both in historic comparisons as
well as in comparison to other industries. In combination with the
continuing flow of new products coming from the pipeline of the
biotech industry, we are very optimistic for the next year.

This is the composition of BB BIOTECHs' Portfolio as at December 31,
2006:


+------------------------------------------------+
| CORE HOLDINGS | |
|------------------------------+-----------------|
| Actelion | 22.1% |
|------------------------------+-----------------|
| Celgene | 18.0% |
|------------------------------+-----------------|
| Gilead | 9.0% |
|------------------------------+-----------------|
| Genentech | 8.7% |
|------------------------------+-----------------|
| Biogen Idec | 7.4% |
|------------------------------+-----------------|
| | |
|------------------------------+-----------------|
| SMALL PARTICIPATIONS | |
|------------------------------+-----------------|
| Roche Holding GS | 6.6% |
|------------------------------+-----------------|
| Vertex Pharmaceuticals | 5.6% |
|------------------------------+-----------------|
| Amgen | 4.1% |
|------------------------------+-----------------|
| The Medicines Company | 3.6% |
|------------------------------+-----------------|
| Genzyme | 3.4% |
|------------------------------+-----------------|
| Affymetrix | 2.2% |
|------------------------------+-----------------|
| Elan | 2.0% |
|------------------------------+-----------------|
| Basilea Pharmaceutica | 1.7% |
|------------------------------+-----------------|
| Zymogenetics | 1.6% |
|------------------------------+-----------------|
| BioXell | 1.0% |
|------------------------------+-----------------|
| Arena Pharmaceuticals | 0.6% |
|------------------------------+-----------------|
| Keryx Biopharmaceuticals | 0.6% |
|------------------------------+-----------------|
| Rigel Pharmaceuticals | 0.6% |
|------------------------------+-----------------|
| Anadys Pharmaceuticals | 0.5% |
|------------------------------+-----------------|
| Incyte | 0.4% |
|------------------------------+-----------------|
| Epigenomics | 0.2% |
|------------------------------+-----------------|
| Affymax | 0.2% |
|------------------------------+-----------------|
| | |
|------------------------------+-----------------|
| Roche GS put options (short) | <(0.1%) |
|------------------------------+-----------------|
| | |
|------------------------------+-----------------|
| Total securities | CHF 2 540 mn |
|------------------------------+-----------------|
| Treasury shares | 9.1% |
|------------------------------+-----------------|
| Liquid funds (net) | CHF (161.1) mn |
|------------------------------+-----------------|
| Other payables | CHF (125.9) mn |
+------------------------------------------------+



The annual report will be available on www.bbbiotech.com as of March
1, 2007.


For further information please contact:
Bellevue Asset Management AG, Seestrasse 16, 8700 Küsnacht,
Switzerland
Dr. Christian Lach, Alexandre Müller or Alexandra Avila, Tel. +41 44
267 67 00


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