Pharma needs biotech for growth

Tuesday, 28. April 2009 07:30
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BB BIOTECH and its holdings experienced a difficult first quarter
2009, in line with many companies. While the ongoing business and the
fundamental news flow of most of our holdings was positive, the
valuations of many Biotech companies declined due to weak conditions
of the overall markets. BB BIOTECH's Net Asset Value (NAV) declined
by 6.2% (in CHF, adjusted for dividends). BB BIOTECH's share price
declined in line with the NAV.

Our core holdings Genentech and Biogen Idec achieved positive
performance of 15% and 10%, respectively. Genentech's share price
performance was driven by the completion of the acquisition of the
minority stake of Genentech by Roche. After nine months of
negotiations, the committee of independent directors of Genentech
agreed in March 2009 to the transaction at USD 95 per share, what
corresponds to a significant premium in current markets. The historic
acquisition was completed on March 26, 2009, when Genentech's shares
ceased trading on the New York Stock Exchange. Roche paid USD 46.8 bn
in cash for the 44% minority stake. However, given Genentech's
profitability and synergies, Roche expects the transaction to be
accretive within the first year. Roche's acquisition demonstrates the
value of biotech companies as a driver of innovations for
pharmaceutical companies and is another validation of the biotech
business model. For BB BIOTECH, the transaction generated a final
profit for our long-term holding of Genentech. BB BIOTECH is grateful
to the management and to all employees of Genentech for the
development of new breakthrough medicines and for having generated
very significant value for its shareholders.

Our holding Biogen Idec achieved positive performance of its share
price based on the continued increase of use of its core product
Tysabri, which is by far the most efficacious and most convenient
drug for treatment of multiple sclerosis. The company is working to
establish algorithms to control rare side effects. With time,
physicians and patients are gaining confidence in the drug. As we
have written many times in this shareholder letter, we continue to
expect Tysabri to become one of the dominating drugs for the
treatment of multiple sclerosis.

The ongoing economic crisis has some negative short term effects on
the revenues of BB BIOTECH's holdings, as governments around the
globe are striving to save money for drug expenses. However, there is
unanimous support in all developed countries that medical innovations
have to be rewarded. Despite some punctual push-backs, the drugs of
BB BIOTECH's holdings are sold at significant prices and continue to
achieve healthy growth rates.

During the quarter, BB BIOTECH invested in two new holdings: Novo
Nordisk is the world market leader on the area of diabetes and is
preparing to launch Liraglutide, a drug with the potential to
substantially improve the therapy of diabetes. Clinuvel is an
Australia based company which is developing a drug for the therapy of
rare diseases of patients who cannot tolerate sunlight.

Due to the unprecedented macroeconomic uncertainties, BB BIOTECH
introduced for the first time a foreign currency hedge which protects
approx. 50% of our exposure to the USD against a potential drop of
the USD below an exchange rate of CHF/USD of 1.08.

On January 28, 2009, BB BIOTECH completed its fifth share buyback
program, after most of the program had been executed already by the
end of the third quarter 2008. At the Annual Shareholders Meeting on
March 30, it was decided to cancel these shares and to start a sixth
share buyback program, in order to keep BB BIOTECH's share price
close to its NAV.

We are very optimistic about the potential of the new biotech drugs.
We expect several new drugs with blockbuster potential to enter the
market in the coming years.






This is the composition of BB BIOTECH's Portfolio as at March 31,
2009 (in % of securities, rounded values):


CORE HOLDINGS
Actelion 32.2%
Gilead 23.0%
Celgene 16.1%
Vertex Pharmaceuticals 11.9%
Biogen Idec 3.2%

SMALL PARTICIPATIONS
Novo Nordisk 2.4%
Zymogenetics 2.0%
Roche Holding GS 1.7%
Arena Pharmaceuticals 1.2%
Optimer Pharmaceuticals 1.1%
Basilea Pharmaceutica 1.0%
NicOx 1.0%
Elan 0.8%
Affymetrix 0.5%
The Medicines Company 0.5%
Epigenomics 0.2%
Rigel Pharmaceuticals 0.2%
Incyte 0.2%
BioXell 0.2%
Clinuvel <0.1%
Keryx Biopharmaceuticals <0.1%

3% convertible bond Deutsche Bank (-18.05.2012) 0.2%

Roche Holding GS put-option (short) <(0.1)%
Actelion put-option (short) (0.1)%
USD/CHF put-option (long) as 1.1%
USD/CHF call-option (short) (0.6)%
SWAP agreement on treasury shares <0.1%

Total securities CHF 1 375.1 mn

Liquid funds (net) CHF 18.0 mn
Other assets CHF 17.9 mn
Other payables CHF (17.2) mn

Total shareholder's equity CHF 1 393.7 mn
Treasury shares (in % of company) 18.6%


The Quarterly Report as at March 31, 2009 is available on
www.bbbiotech.com



For further information please contact:
Bellevue Asset Management AG, Seestrasse 16, CH-8700 Kusnacht,
Switzerland
Nafida Bendali or Maria-Grazia Alderuccio, Tel. +41 44 267 67 00



Company profile:
BB BIOTECH acquires holdings in companies in the biotechnology growth
market and is currently one of the world's largest investors in the
sector. BB BIOTECH is listed in Switzerland, in Germany and in Italy.
The focus of the holdings is on quoted companies that are
concentrating on the development and marketing of innovative
medicines. For the selection of holdings, BB BIOTECH relies on
fundamental analysis by physicians and molecular biologists. The
Board of Directors has many years of industrial and scientific
experience.



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BB BIOTECH AG
Vordergasse 3 Schaffhausen Switzerland

WKN: AONFN3;
ISIN: CH0038389992; Index: SBIOM, IGSP, SLIFE;
Listed: Investment Companies in SIX Swiss Exchange;

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