News
2020
Arcutis Biotherapeutics (Nasdaq: ARQT), a privately held company in the portfolio of HBM Healthcare Investments, successfully went public last Friday. Due to the high demand, the company increased the number of newly issued shares by around one fifth to 9.375 million new shares. The shares were placed at the upper end of the price range at USD 17 per share, raising gross proceeds of USD 159 million for the company. On the first trading day, the stock price rose to USD 21.80 (+28.2%).
HBM Healthcare Investments first participated in a private financing round in October 2019 with USD 15 million in Arcutis and invested an additional USD 7.65 million in the IPO. After the IPO, HBM Healthcare Investments holds approximately 1.74 million shares with a total value of USD 37.9 million. The IPO of Arcutis increases the net asset value per HBM share (NAV) by CHF 1.80 (+0.8%).
The Westlake Village, California-based Arcutis Biotherapeutics is advancing a pipeline of drug candidates for the treatment of various skin diseases. The Company's lead candidate is ARQ-151, a PDE4 inhibitor for the treatment of plaque psoriasis and atopic dermatitis, currently in phase 3 of clinical development.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
In the third quarter of the 2019/2020 financial year, HBM Healthcare Investments achieved a net profit of CHF 163.2 million. As a result, for the first nine months of the 2019/2020 financial year, net profit rose to CHF 265.7 million, with an increase in net asset value per share (NAV) of 20.2 percent. The share price rose disproportionately by 36.3 percent, closing at CHF 222.50 at the end of December at a small premium to NAV.
The positive quarterly result is primarily based on the price gains of public investments. The private portfolio was further strengthened with a new investment in Arcutis Biotherapeutics as well as various follow-on financings. The outlook for the current calendar year is positive, as many portfolio companies have important IPOs, approval decisions and clinical data releases pending, each with considerable potential for value growth.
The public investments in HBM Healthcare Investments' portfolio recorded a strong increase in value of CHF 223 million in the quarter ended December 2019. Approximately one-third of this amount is attributable to former private companies, mainly Y-mAbs, Principia, TP Therapeutics, SpringWorks and Viela Bio, all of which went public in the past fifteen months and have since shown very encouraging performance. The value of private companies, funds and other financial assets fell slightly by CHF 25 million due to currency effects. Overall, the quarter saw a net profit of CHF 163.2 million.
Significant events in the quarter under review
Viela Bio and Galera Therapeutics from the private company portfolio completed an IPO in the quarter under review. Both companies subsequently recorded a positive share price performance and contributed approximately CHF 17 million to the quarterly profit.
At the beginning of December, Cathay Biotech submitted the prospectus for its intended IPO at the "Science and Technology Board" of the Shanghai Stock Exchange ("STAR Market") for review. Accordingly, the company achieved a turnover of almost CNY 1.59 billion in the first 9 months of the 2019 financial year (2018 for 12 months: CNY 1.79 billion) and a net profit of approximately CNY 0.37 billion (2018 for 12 months: CNY 0.47 billion). Among the public companies, the two investments in RA Pharma (acquired by UCB) and XBiotech (sale of the antibody "Bermekimab" to Johnson & Johnson) made a significant contribution to the quarterly profit, totalling CHF 29 million.
New investment in private companies
A new USD 15 million investment in Arcutis Biotherapeutics was added to the portfolio of private companies during the quarter. The company, based in Westlake Village, California, is active in the field of dermatology. The most advanced compound for the treatment of psoriasis is in phase III of clinical development. At the beginning of January 2020, the company announced its intention to go public on the US Nasdaq stock exchange.
In addition, a total of around CHF 11 million was invested in existing private companies as follow-on financing (Arrakis USD 5.6 million, Adrenomed EUR 1.4 million, Forbius CAD 2.5 million, Complexa USD 1.0 million and Neurelis USD 1.0 million).
Further new investments in private companies are at an advanced stage of the investment process and should be completed in the first quarter of the current year.
Outlook
After the balance sheet date, at the beginning of January the private company Neurelis received approval from the US Food and Drug Administration for ValtocoTM, a nasal spray for the treatment of acute epilepsy seizures, and Apellis published positive phase III study results for the C3 inhibitor for the treatment of paroxysmal nocturnal hemoglobinuria (PNH), a life-threatening genetic blood disease.
For the calendar year 2020, HBM Healthcare Investments expects a continued lively flow of news due to approval decisions or important study data. Seven portfolio companies expect to receive marketing approval for the first drug they have developed:
> Y-mAbs for the two candidates "Naxitamab" and "Omburtamab" for the treatment of rare cancers in children;
> Viela Bio for the antibody "Inebilizumab" for the treatment of neuromyelitis optica spectrum disorder, a serious inflammation of the central nervous system, which typically affects the optic nerve and spinal cord;
> Immunomedics for "Sacituzumab govitecan", an antibody-drug conjugate for the treatment of patients with metastatic triple-negative breast cancer;
> Esperion for "Bempedoic acid" for the treatment of patients with elevated cholesterol levels who are resistant or intolerant to statins;
> Galapagos for "Filgotinib" for the treatment of rheumatoid arthritis;
> Biohaven for "Rimegepant" for the acute treatment of migraine;
> Zogenix for "Fintepla" for the treatment of patients with Dravet syndrome.
In the first quarter, the privately-held company Adrenomed expects results from the 300-patient phase II study AdrenOSS-2 for the antibody "Adrecizumab" for the treatment of patients with acute septic shock. If the outcome is positive, the investment in Adrenomed could open up considerable value potential.
Further significant study results are also pending at the public companies Turning Point Therapeutics (lung cancer, phase II), ArgenX (myasthenia gravis, phase III), Biohaven (migraine prevention, phase III and various other studies for neurological diseases) and uniQure (haemophilia B, phase III).
Acquisitions are also likely to continue to play an important role in the healthcare sector and in some cases bring us corresponding added value. Besides Cathay and Arcutis, other companies from the portfolio are also aiming for an IPO.
The Quarterly Report December 2019 is available on the Company’s website https://www.hbmhealthcare.com/en/investors/financial-reports.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments benefited from its well developing investments in private and public companies and achieved a high value increase in a friendly market environment in calendar year 2019: The net asset value per share (NAV) rose by 33.0 percent to CHF 220.17 as at 31 December 2019. The share price increased by 48.0 percent and closed at CHF 222.50 with a small premium to the NAV.
Private companies (value growth through IPOs and revaluations due to financing rounds) and listed companies contributed to the increase in value in roughly equal parts.
The carefully compiled portfolio has potential for further value growth. Of the net assets of CHF 1.53 billion, 45% is attributable to private companies, milestonesy and funds, 54% to listed companies (or 47% after market hedging) and 18% to cash (or 11% after deduction of the repurchase obligation from market hedging). Market hedging was continuously increased in the fourth quarter of 2019 to just over one-eighth of the portfolio value of the listed companies. The level of current and non-current liabilities remains moderate at just under 10%.
Expected net profit of approximately CHF 265 million for the first 9 months of financial year 2019/2020
For the first nine months of the 2019/2020 financial year ending 31 March, the net asset value per share increased by 20.2 percent and the share price rose by 36.3 percent. Based on the reported NAV as of 31 December 2019, HBM Healthcare Investments expects a significantly higher net profit of approximately CHF 265 million for the first 9 months of the financial year. In the same period of the previous year, net profit amounted to CHF 81.3 million.
This is a preliminary result based on the current status of the closing process. The final numbers will be published on 24 January 2020 with the quarterly report December 2019.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
2019
HBM Healthcare Investments continued successfully in the second quarter of the 2019/2020 financial year. A quarterly profit of CHF 27 million took the Company’s overall first-half result to CHF 102 million. Net asset value rose by 7.8 percent during the same period, and the share price advanced by 18.9 percent.
The principal contributors were positive developments of private portfolio companies, which led to higher valuations. Private companies account for 46 percent in total, while the public portfolio has been scaled back to 40 percent of assets. Thanks to considerable liquidity, HBM Healthcare Investments has plenty of room for manoeuvre.
HBM Healthcare Investments achieved a profit of CHF 27 million in the second quarter of the 2019/2020 financial year. Net asset value (NAV) per share rose by 2.0 percent. The Company benefited from growth in the value of a number of holdings in the portfolio of private companies as a result of financing rounds, IPOs, trade sales and milestone payments.
HBM Healthcare Investments made a total profit of CHF 102 million in the first half of the reporting year to 30 September 2019, leading to a NAV increase of 7.8 percent. The share price surged by 18.9 percent during the same period. This meant that HBM Healthcare Investments’ performance over the past six months has significantly exceeded that of the relevant stock market indices in the healthcare sector (MSCI World Health Care Index +0.7 percent, Nasdaq Biotechnology Index –10.5 percent).
Value-driving developments at private companies
In August, Harmony Biosciences received US market approval for Wakix®, a drug to treat narcolepsy. The company also completed a financing round of USD 50 million, in which HBM Healthcare Investments took a USD 6 million stake. Since this financing round resulted in the company’s upward revaluation, the value of the holding increased by CHF 27 million.
Chinese company Shanghai Cathay Biotech conducted a further capital increase of CNY 1 billion (CHF 140 million) in September, which also raised the company’s valuation. HBM Healthcare Investments did not participate in this financing round. However, the value of its holding increased by CHF 14 million as a result of it.
SpringWorks Therapeutics, a US company working in the field of targeted cancer treatment, went public on the Nasdaq in September, generating a book profit of CHF 17 million for HBM Healthcare Investments.
Claims to performance-related sales proceeds from a variety of previous trade sales yielded a total of CHF 32 million for HBM Healthcare Investments during the quarter under review – a gain of CHF 15 million compared with balance sheet figures to date. The largest such amount originated from the 2011 sale of German diagnostics company mtm laboratorieso Roche.
The medical technology company Rebound Therapeutics was acquired by Integra LifeSciences during the quarter. Rebound was founded and held by the Medfocus Fund. The sale increased the fair value of HBM Healthcare Investments’s units in the Medfocus Fund by CHF 6 million.
Balanced portfolio
The portfolio of private companies was expanded by a small investment of CHF 3 million in MicroOptx. Based in Maple Grove, Minneapolis, the company is developing an implant to treat patients with elevated pressure in the eye.
The portfolio retains its very cautious and balanced composition. Private companies account for 46 percent of assets, comprising 35 percent direct investments, 10 percent funds, and one percent expected milestone payments.
Meanwhile, public companies make up 42 percent of assets, or 40 percent when the market hedge is taken into account. The quarter just ended saw profit-taking on certain investments, and the disposal of just under CHF 90 million of listed positions. These moves were prompted by liquidity considerations (par value repayment), and the IPOs of SpringWorks Therapeutics and Viela Bio in September and early October respectively, both of which increased the size of the Company’s public portfolio. The scale of the market hedge was reduced slightly.
Following the par value repayment, cash and cash equivalents represented 11 percent of assets, or 9 percent when the repurchase obligation under the market hedging arrangement is taken into account.
Outlook
In addition to the companies mentioned above, many of HBM Healthcare Investments’s other private portfolio companies are also developing very well. Neurelis expects the approval for its Valtoco nasal spray to treat acute epileptic seizures at the beginning of 2020. Viela Bio achieved its listing on the US Nasdaq in early October, after the balance sheet date. Other private companies are also planning to go public.
Some of the companies in which HBM Healthcare Investments initially invested relatively small amounts are proceeding as planned with their clinical trials and will be publishing results over the coming months. If positive, this will open up considerable value-generation potential for these companies.
Among the public companies, HBM Healthcare Investments is expecting Y-mAbs Therapeutics to submit applications for the market approval of its Naxitamab and Omburtamab compounds to treat rare cancers in the nervous systems of children by the end of 2019. Pivotal study data and approval decisions are also likely at a range of other companies in the months to come, which should have a positive overall effect on their value.
General sentiment on the financial markets was a little subdued in the first few trading days of October. However, with a sound portfolio of companies that are performing very well operationally, not to mention a reduced allocation of public companies, HBM Healthcare Investments is less exposed to market turbulences and volatility.
HBM Healthcare Investments starts the second half of the financial year with great confidence in the further development of its portfolio companies but proceeds with a certain degree of caution because the general market environment is difficult to assess.
The Half-Year Report September 2019 is available on the Company’s website https://www.hbmhealthcare.com/en/investors/financial-reports.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
Viela Bio (Nasdaq: VIE), a privately held company in the portfolio of HBM Healthcare Investments, successfully went public. The company raised USD 150 million through the issuance of 7.9 million new shares at a price of USD 19.00 per share. On yesterday’s first trading day the stock price rose to USD 23.41 (+23.2%).
HBM Healthcare Investments participated for the first time in a private financing round in June 2019 with USD 20 million in Viela and invested a further USD 9.5 million at the IPO. Following the IPO, HBM Healthcare Investments holds 1.75 million shares worth USD 41 million. As a result of this transaction, the net asset value per HBM-share (NAV) increases by CHF 1.40 (+0.7%).
Viela specializes in the treatment of severe inflammatory and autoimmune diseases. The lead product candidate inebilizumab, an antibody for the treatment of neuromyelitis optica spectrum disease, has successfully completed Phase III clinical development and is currently in the approval process with the U.S. Food and Drug Administration (FDA). Neuromyelitis optica spectrum disease is a serious inflammation of the central nervous system typically affecting the optic nerve and spinal cord.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
| in CHF | Performance in % |
30.09.2019* | MTD | FYTD | CYTD | |
NAV | CHF 196.71 | 2.8% | 7.8% | 19.3% |
Share Price | CHF 193.20 | 4.5% | 18.9% | 29.2% |
Total Net Assets (in million) | 1'369 |
*Factoring in the cash dividend of CHF 7.50 per registered share as paid out on 12 September 2019.
Based on the current NAV, HBM Healthcare Investments expects a gain for the first half of the financial year 2019/2020 of around CHF 102 million (previous year: CHF 177 million).
MTD | Month to Date |
FYTD | Financial Year to Date (since 1.4.2019) |
CYTD | Calendar Year to Date (since 1.1.2019) |
SpringWorks Therapeutics (Nasdaq: SWTX), a privately held company in the portfolio of HBM Healthcare Investments, successfully went public last Friday. The company placed 9 million new shares at USD 18.00 per share, raising a total of USD 162 million. On the first trading day, the stock price rose to USD 22.63 (+25.7%).
HBM Healthcare Investments invested USD 12 million in SpringWorks in a private financing round in March 2019 and increased its stake by an additional USD 3.15 million in the IPO. Following the IPO, HBM Healthcare Investments holds approximately 1.4 million shares worth USD 32.6 million. As a result of this transaction, the net asset value per HBM-share (NAV) increases by CHF 2.11 (+1.1%).
SpringWorks is a clinical-stage biopharmaceutical company applying a precision medicine approach to developing life-changing medicines for underserved patient populations suffering from devastating rare diseases and cancer. SpringWorks has a differentiated portfolio of small molecule targeted oncology product candidates and is advancing two potentially registrational clinical trials in rare tumor types, as well as several other programs addressing highly prevalent, genetically defined cancers.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
HBM Healthcare Investments had a successful start to the new 2019/2020 financial year, with net asset value (NAV) per share rising by 5.7 percent to CHF 200.29 during the first quarter. The share price increased by 8.9 percent to CHF 183.80 during the same period. Overall, the quarter under review generated a profit of CHF 75 million as at 30 June 2019.
This positive result was driven by two events, in particular. The fair value of our holding in privately owned Chinese company Cathay Industrial Biotech rose by CHF 57.5 million during the quarter under review owing to a secondary market transaction at a significantly higher valuation. HBM Healthcare Investments participated in this transaction, increasing its investment in the company by CHF 10 million. With a fairvalue of CHF 192.6 million, Cathay is by far the largest holding in the portfolio.
In addition, in view of a potential IPO, HBM Healthcare Investments accepted the exchange of its holding in Cathay Industrial Biotech, based in the Cayman Islands, for a direct stake in its China-based parent company Shanghai Cathay Biotechnology R&D Center Co. This share swap means that the holding will now be reported in Renminbi instead of US dollars.
Turning Point Therapeutics, which focuses on targeted treatments for cancer, went successfully public in April 2019. This generated a book profit of CHF 27.9 million for HBM Healthcare Investments during the quarter under review. The company issued 10.6 million new shares at a price of USD 18 each at its IPO, thereby raising USD 191.5 million in new capital. By the end of June, the company’s share price had risen to over USD 40. HBM Healthcare Investments took an initial USD 10 million stake in Turning Point in October 2018, and increased its holding by a further USD 4.5 million as part of the IPO.
Two new investments in private companies
HBM Healthcare Investments made two new investments in private companies during the quarter just ended. USD 20 million has been invested in US company Viela Bio, which specialises in the treatment of severe inflammatory and autoimmune diseases. Its lead product candidate is inebilizumab, which is an antibody to treat neuromyelitis optica spectrum disorder. It has successfully completed phase III clinical trials, and an application for approval will be submitted to the US FDA in the near future. Neuromyelitis optica spectrum disorder is an inflammation of the central nervous system that can have severe, lasting consequences. It typically affects the optic nerve and the spinal cord.
US company Arrakis Therapeutics, based in Waltham near Boston, received an investment commitment of USD 7 million. The first tranche of USD 1.4 million has now been paid in. Arrakis uses a proprietary platform for the identification and development of a new class of small-molecule compounds which do not bind to proteins, but directly to ribonucleic acids (RNAs) to change their biological function and thereby treat diseases.
Outlook
Cathay’s new investment currency increases the portfolio’s foreign exchange diversification, with the proportion in Renminbi now standing at 12 percent. The US dollar allocation thus falls from 76 percent to 64 percent.
The HBM Healthcare Investments portfolio continues to exhibit a balanced composition in terms not only of the respective shares of private and public companies, but also its geographical focus. Many of the major portfolio companies are performing very well operationally, with key events such as approval decisions and clinical study data due in the near future as expected. These should have a positive effect on net asset value overall. HBM Healthcare Investments is also expecting the publication of trial results from a number of our smaller portfolio companies, some of which are subject to somewhat elevated risk. If positive, the Company is likely to increase its holdings in these companies further if an appropriate opportunity presents itself.
HBM Healthcare Investments expects further private portfolio companies to go public or to release added value following financing rounds or strategic transactions over the coming year and a half and we are encouraged by the fundamental development of many listed portfolio companies. With regard to the general market development nothing has changed fundamentally in recent months; HBM Healthcare Investments continues to closely monitor global economic and monetary policy developments with regard to a potential increase in market volatility. The partial market hedging remains at a lower level.
The Quarterly Report June 2019 is available on the Company’s website https://www.hbmhealthcare.com/en/investors/financial-reports
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
At the Annual General Meeting of HBM Healthcare Investments AG on 24 June 2019, the shareholders approved a new share buy-back programme for a maximum of 696’000 shares (10% of the shares issued) for the purpose of cancellation by means of a capital reduction. The repurchase programme will be conducted via a separate trading line on the SIX Swiss Exchange. It begins on Friday, 28 June 2019 and lasts until 27 June 2022 at the latest.
Further information on the new buyback programme can be found on the website at https://www.hbmhealthcare.com/en/investors/information
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
At today’s ordinary Shareholder’s Meeting of HBM Healthcare Investments Ltd the Shareholders approved all proposals submitted by the Board of Directors. A total of about 42% of all shares were represented at the Shareholders’ Meeting.
The Chairman of the Board of Directors, the Members of the Board of Directors as well as the Members of the Compensation Committee were all re-elected for a further term of one year. The Shareholders also approved the proposed compensation to the Board of Directors and to the Management.
The Shareholders’s Meeting also approved a partial payback of nominal value of CHF 7.50 per share. The cash payment will be made on 12 September 2019, and registered shares entitled to receive the distribution will be traded for the last time on 9 September 2019 (as of 10 September 2019 without the distribution entitlement, ex-date).
Further, the Shareholders agreed to a new share buy-back programme of up to a maximum of 10% of the shares outstanding, in order to cancel those shares as part of a capital reduction.
The presentation shown at the Shareholders’ Meeting is available on the Company’s website http://hbmhealthcare.com/en/investors/information.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments today completed the share buyback programme launched in October 2016. 243’910 treasury shares (corresponding to 3.5% of the shares issued) were repurchased via a separate trading line on the SIX Swiss Exchange for a total amount of CHF 26.9 million. Of the shares acquired, 241’000 have already been cancelled by resolution of the Annual General Meeting.
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
Viela Bio, a privately held biotechnology company, today announced the successful completion of a USD 75 million private placement. HBM Healthcare Investments led the financing round and invested USD 20 million. Additional new investors include Viking Global Investors, Cormorant Asset Management, Terra Magnum Capital Partners, Goldman Sachs, and Barer & Son Capital. Existing investors participating include Temasek Holdings. Since launch in February 2018, Viela raised more than USD 300 million.
The financing will support Viela in the anticipated regulatory filing and pre-commercial planning for its lead product candidate, inebilizumab, for the treatment of neuromyelitis optica spectrum disorder (NMOSD) and allows to advance development of additional clinical candidates targeting autoimmune and inflammatory diseases.
Viela Bio, headquartered in Gaithersburg, Maryland, USA, is a clinical-stage biotechnology company pioneering and advancing treatments for severe inflammation and autoimmune diseases by selectively targeting shared critical pathways that are the root cause of disease. Visit www.vielabio.com for more information.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
HBM Healthcare Investments Ltd
Bundesplatz 1, 6300 Zug
Invitation to the 18th Ordinary Shareholders' Meeting
Monday, 24 June 2019, 2:00 pm
Theater Casino Zug
Artherstrasse 2 - 4
6300 Zug
The admission office opens at 1:30 pm.
The invitation to the 18th Ordinary Shareholders’ Meeting on 24 June 2019 has been sent to the shareholders of HBM Healthcare Investments today.
The detailed invitation with all motions of the Board of Directors is enclosed and displayed on the Company’s website www.hbmhealthcare.com.
Agenda for the 18th Ordinary Shareholders’ Meeting on 24 June 2019
1. Statutory financial statements and group financial statements 2018/2019; reports of the auditors
2. Discharge from liability of the members of the Board of Directors and Management
3. Appropriation of results
- Appropriation of disposable profit of CHF 182'099'847
4. Elections regarding the Board of Directors
- Re-election of the Chairman and of the Members of the Board of Directors
- Re-election of the Members of the Compensation Committee
5. Compensation to the Board of Directors and to the Management
6. Appointment of auditors
7. Appointment of independent proxy-holder
8. Reduction of share capital: partial payback of nominal value
- Cash distribution to shareholders of CHF 7.50 per share through nominal value repayment
9. Approval of a new share buy-back programme and capital reduction in principle
10. Miscellaneous
HBM Healthcare Investments also published today its Annual Report 2018/2019 on the Company’s website www.hbmhealthcare.com/en/investors/financial-reports.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
With an increase in net assets of 18 percent, HBM Healthcare Investments looks back upon another successful financial year. With a profit of CHF 209 million, the 2018/2019 year-end result seamlessly carries forward the achievements of previous years. Cumulated profits over the past six years exceed CHF 1 billion. During the same period, net asset value (NAV), including distributions, per share more than trebled, while the share price almost quadrupled. This steady growth in value has resulted in a significantly stronger shareholder base. The proposed cash distribution of CHF 7.50 represents an increase of 50 cents compared to the previous year.
Innovations in the healthcare market are the main driving force behind investment success. The potential is far from exhausted. The need for new therapies remains considerable, despite the current record level of new drug approvals. HBM Healthcare Investments is grasping the opportunities presented by these developments, having invested CHF 141 million in private companies during the year under review, including 15 new holdings. The Asian allocation has been increased to 22 percent. The portfolio remains balanced, well diversified, and partially hedged.
Many private portfolio companies are performing very well. Both private and public portfolio companies are expected to publish significant study results and approval decisions during the new financial year, with the corresponding effect on their value.
Review of the 2018/2019 financial year
Net asset value (NAV) per share rose by 18 percent, while the share price advanced by 22 percent. Profit for the year as at the end of March 2019 stood at CHF 209 million. Investment activities achieved a net CHF 266 million contribution to profits, with CHF 153 million generated by private companies and funds, CHF 101 million by public companies, and CHF 12 million by other assets.
In the portfolio of private companies, the IPOs of Y-mAbs Therapeutics (profit contribution of CHF 50 million) and Principia Biopharma (CHF 20 million) released added value. In addition, the following investments were revalued due to higher valuations in financing rounds with third-party investors: Cathay Industrial Biotech (CHF 38 million), Neurelis (CHF 20 million), SAI Life Sciences (CHF 11 million) and 1mg (CHF 8 million). These revaluations demonstrate the successful operating performance of the companies concerned.
In the portfolio of fund investments, the value of our largest holding – in WuXi Healthcare Ventures II (profit contribution of CHF 11 million) – increased significantly as Chinese oncology firm CStone Pharmaceuticals went public in Hong Kong.
HBM Healthcare Investments also benefited from three takeovers in the portfolio of public companies. Former private company ARMO BioSciences (profit contribution of CHF 22 million) was acquired by Eli Lilly, Tesaro Pharmaceuticals (CHF 8 million) by GlaxoSmithKline, and AveXis (CHF 8 million) by Novartis. HBM Healthcare Investments acquired its holding in the latter two of these companies via the stock market.
The reporting year also brought significant increases in the value of our holdings in Ultragenyx (profit contribution of CHF 20 million), Argenx (CHF 19 million), BioArctic (CHF 17 million) and Ra Pharma (CHF 16 million).
The partial market hedge of the public portfolio had no effect on net income during the financial year. Two-thirds of the hedge was closed out following the sharp drop in share prices towards the end of the fourth calendar quarter of 2018, and increased slightly once again after the sharp counter-movement in the first quarter of 2019. Around 13 percent of the public portfolio was hedged as at the end of March 2019.
Management fees of about CHF 17 million are in line with the rise in net assets, while the Company‘s other administration costs remain unchanged at around CHF 3 million. In addition, in view of the increase in value achieved during the reporting year, which significantly exceeds the previous highwater mark, a performance fee of CHF 31.9 million is due to the investment advisor. The Board of Directors will receive variable compensation of CHF 2.0 million.
Higher cash dividend
The Board of Directors will propose to the Ordinary Shareholders‘ Meeting that the cash dividend be increased by CHF 0.50 to CHF 7.50, in the form of a withholding tax-exempt par value repayment. This corresponds to a distribution yield of 4.4 percent, which thus remains at the upper end of the target bandwidth of 3 to 5 percent.
CHF 141 million for private companies
HBM Healthcare Investments invested a total of CHF 114 million in 15 private companies during the year under review. Of this, CHF 87 million has already been paid in. Investment tranches of CHF 27 million remain outstanding. Further, CHF 27 million was dedicated to follow-on investments in existing private companies.
In the final quarter of the financial year HBM Healthcare Investments made a new investment of USD 12 million in the US company SpringWorks Therapeutics. SpringWorks has a pipeline of compounds for the treatment of rare forms of cancer in late-stage clinical development.
Other major new investments during the reporting year included Jianke Pharmaceutical (USD 15 million, an online healthcare service platform), Principia Therapeutics (USD 12 million, immunology and oncology), Turning Point Therapeutics (USD 10 million, oncology), Sublimity Therapeutics (EUR 8 million, compound to treat chronic inflammation of the colon), Sphingotec (EUR 9 million, diagnosis and treatment monitoring in the case of acute renal injury, heart failure and septic shock), Adrenomed (EUR 6 million, antibodies to treat patients with septic shock), Galecto Biotech (EUR 7 million, idiopathic pulmonary fibrosis), and iTeos Therapeutics (EUR 5 million, immuno-oncology).
Smaller investments of USD 3 to 5 million were also made in six further companies.
Broadly diversified portfolio
HBM Healthcare Investments continues to provide a portfolio that is well balanced in terms of diversification, liquidity, and geographical reach. The largest holding at the end of March 2019 accounts for around 9 percent of net assets, and the ten largest investments together make up one third of the portfolio overall. The relative proportion of individual investments may nonetheless rise sharply at times, in connection with the revaluation at a financing round or an IPO, for example.
The Company‘s assets of CHF 1.5 billion are also well balanced. They were composed as follows as at the end of March 2019: 26 percent private companies, 9 percent funds and 45 percent public companies (39 percent when the hedge is taken into account). Cash and cash equivalents account for 17 percent (11 percent if all market hedge positions are closed out). At around 7 percent, non-current financial liabilities remain at a very moderate level.
The portfolio is also broadly diversified geographically, with 58 percent of investments in the world‘s largest healthcare market, the US, 20 percent in Europe and 22 percent in Asia, HBM Healthcare Investments is positioned to engage in opportunities around the globe.
Positive portfolio outlook
Many private portfolio companies are performing very well. In accordance with HBM Healthcare Investments policies, these investments are conservatively valued, and should generate considerable added value in the event of an IPO or trade sale.
Both private and public portfolio companies (such as Neurelis and Harmony Biosciences) are expected to publish significant study results and approval decisions during the new financial year, with the corresponding effect on their value. Here, too, HBM Healthcare Investments anticipates a range of positive publications, most of which will release value potential or open up strategic opportunities.
In view of the relatively low level of visibility on the financial markets, the Company will continue to keep a critical eye on general market trends, and will reduce its exposure to listed stocks, or increase the hedge, as necessary.
HBM Healthcare Investments has a high conviction that its balanced, high-quality portfolio continues to offer more value-creation potential.
In the appendix to this media release you will find the balance sheet and income statement in accordance with IFRS, the portfolio details and an overview of the consolidated financials including a translation to the IFRS Financial Statements. The detailed Annual Report will be published on 31 May 2019 and will be available on the Company's website from that date onwards.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
- The carrying amount of the investment in Cathay increased by USD 34 million in the financial year ended March 31, 2019 based on a financing round. As a result, the net profit for the 2018/2019 fiscal year increased by CHF 29 million to CHF 209 million. The net asset value per share (NAV) as of 31 March 2019 increased by 2.2 percent to CHF 189.48.
- The book value of the investment in Cathay was increased by a further USD 61 million as of mid-May 2019 based on transaction values. Upon completion of an additional investment, the book value of the investment will amount to USD 196 million.
- Including the two value adjustments, the net asset value per HBM-share (NAV) amounts to CHF 201.46 as at 15 May 2019.
- The media release on the annual results 2018/2019 will be published tomorrow, Friday, 17 May 2019, pre-market.
HBM Healthcare Investments currently holds its stake in the Chinese company Shanghai Cathay Biotechnology R&D Center Co. Ltd. ("Cathay R&D Center") together with other shareholders indirectly via the holding company Cathay Industrial Biotech Ltd. based in the Cayman Islands ("CIB Cayman"). Cathay R&D Center is the parent company of the Cathay Group ("Cathay") in China, which owns the various operating subsidiaries.
HBM Healthcare Investments agreed to exchange its stake in CIB Cayman for a direct stake in Cathay R&D Center in view of a possible going public of Cathay R&D Center. HBM Healthcare Investments' shareholding in Cathay thus remains unchanged.
As part of the transaction, HBM Healthcare Investments and other new financial investors will acquire additional shares in Cathay R&D Center. HBM Healthcare Investments has committed USD 10 million.
As a consequence of these developments, HBM Healthcare Investments is revaluing its investment in Cathay. The book value of the investment increases by a total of USD 95 million to USD 196 million (including the additional investment). In accordance with our valuation principles and the provisions of IFRS, part of the increase in value of USD 34 million was recorded in fiscal year 2018/2019. This is based on a financing round conducted by Cathay R&D Center in 2018. As a result, the net profit in the audited financial statements 2018/2019, as approved today by the Board of Directors, increased by CHF 29 million, from previously announced CHF 180 million to new CHF 209 million.
The additional value increase of USD 61 million will be booked in the new 2019/2020 financial year and is included in the Net Asset Value per HBM-share (NAV) published today on 15 May 2019.
Upon completion of the share swap, HBM Healthcare Investments will change the investment currency for its investment in Cathay from previously US Dollars (USD) to Renminbi (RMB).
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
Turning Point Therapeutics (formerly TP Therapeutics, Nasdaq: TPTX), a so far privately held company in the portfolio of HBM Healthcare Investments, has delivered a spectacular start in its IPO yesterday. Due to the high demand, the company increased the number of newly issued shares by around a quarter to 9.25 million new shares. The shares were placed at the upper end of the price range at USD 18.00 per share, raising gross proceeds of USD 166.5 million for the company. On yesterday’s first trading day, the stock price rose to USD 28.90 (+60.6%).
HBM Healthcare Investments initially invested USD 10 million in Turning Point Therapeutics in a private financing round prior to the IPO in October 2018 and increased its stake by an additional USD 4.5 million in the IPO. Following the IPO, HBM Healthcare Investments holds approximately 1.1 million shares worth USD 31.9 million. As a result of this transaction, the net asset value per HBM-share (NAV) increases by CHF 2.52 (+1.4%).
Turning Point Therapeutics is a clinical-stage precision oncology company with a pipeline of internally discovered investigational drugs designed to address key limitations of existing cancer therapies. The company’s lead program, repotrectinib, is a next-generation kinase inhibitor targeting genetic drivers of non-small cell lung cancer and advanced solid tumors.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
The financial year 2018/2019 once again ended successfully for HBM Healthcare Investments. The net asset value per share (NAV) increased by 15.6 percent to CHF 185.33 as of March 31, 2019. The share price rose by 22.1 percent to CHF 168.80.
Expected annual profit of about CHF 180 million
Based on the reported NAV as of 31 March 2019, HBM Healthcare Investments expects to report a net income of about CHF 180 million for the financial year 2018/2019 (previous year net income of CHF 116 million).
The result is preliminary and unaudited based on the current state of the financial closing process. The final annual result will be published on 17 May 2019.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
HBM Healthcare Investments withstood the market correction relatively well thanks to the partial hedge that the Company had in place, timely realisations from the portfolio of public companies to generate liquidity and the growth in the value of the portfolio of private companies. With a decline of 7.4 percent, the net asset value (NAV) per share contracted much less than comparable indices during the third quarter of the current financial year 2018/2019. Overall, HBM Healthcare Investments made a loss of CHF 96 million during the quarter under review.
Notwithstanding the negative result for the most recent quarter, the Company is showing a profit of CHF 81 million for the first nine months of the 2018/2019 financial year, with NAV up by 7.0 percent. The share price advanced by 12.8 percent during the same period.
Positive trend among private companies
A number of firms in the portfolio of private companies performed very well:
Neurelis filed for regulatory approval to the US FDA for VALTOCOTM, a nasal spray for the treatment of acute epileptic seizures. Approval is expected in 2019. In addition, in November the company concluded a USD 55 million financing round with CMS Medical Ventures, as a new investor. HBM Healthcare Investments contributed USD 9.5 million to this financing arrangement, which led to a CHF 20 million increase of the value of the holding.
In December, 1mg – the leading digital healthcare platform in India – completed a financing round over the equivalent of CHF 70 million that was led by a Swiss investor group. HBM Healthcare Investments itself contributed CHF 5 million. Once again, this financing round resulted in the upward revaluation of the company, increasing the value of the existing investment by around CHF 8 million.
Meanwhile, in all of 2018, Swiss company Amicus concluded new agreements with 15 companies to license, market or represent products in central and eastern Europe. This rapidly-expanding firm generated sales of more than EUR 70 million in 2018, and is on course to raise turnover to over EUR 100 million in 2019. The holding in Amicus continues to be valued at cost in the portfolio.
Shortly before the end of 2018, Harmony Biosciences applied to the FDA for regulatory approval for Pitolisant for the US market. Pitolisant is a drug that is used to treat narcolepsy and cataplexy, and is already approved in Europe.
Cathay Industrial Biotech, the Chinese manufacturer of organically based materials from renewable resources, completed the first phase of construction of a new production facility in Xinjiang, which is now operational. The company is planning to invest a further USD 500 million in a second phase of construction to double the production capacity in Xinjiang.
New investments in private companies
In addition to the follow-on financing rounds referred to above, the quarter under review brought new investments in four private companies:
> A total of CHF 15 million is being invested in two companies set up by the former scientific head and cofounder of Brahms, a very successful former HBM Healthcare Investments portfolio company. Both companies are based in Henningsdorf, Germany:
- Diagnostics firm Sphingotec develops and markets the innovative penKid® and bio-ADM® biomarkers to predict, diagnose and monitor the treatment of acute kidney injuries, heart failure, and septic shock. An initial EUR 4.5 million tranche of a total of EUR 9 million has been paid in.
- Andrenomed is conducting a phase II trial to test the adrecizumab antibody in the treatment of patients with septic shock. EUR 0.3 million in share capital has been paid in to date, with three further tranches to follow from early 2019 onwards. Andrenomed will receive a total of EUR 6 million.
> TP Therapeutics, an oncology firm based in San Diego, USA, received USD 10 million. In its most advanced development programme, the company is conducting a phase I/II trial of a kinase inhibitor for the targeted treatment of lung cancer.
> EUR 7 million is being invested in Danish company Galecto Biotech, with the first tranche – of EUR 3.2 million – already paid in. Galecto is conducting clinical trials of a compound to treat idiopathic pulmonary fibrosis.
Outlook
The accelerated price drop on the financial markets was followed after Christmas by a counterreaction which continued into the first few weeks of the new year. The lower level of valuations has also prompted resurgent M&A activity in the healthcare sector in recent weeks, with GSK acquiring Tesaro, Bristol-Myers Squibb purchasing Celgene, and Eli Lilly buying Loxo Oncology. The buyers offered high purchase premiums in each case. The takeovers have restored market sentiment in the healthcare sector somewhat, which should benefit HBM Healthcare Investments.
That said, financial market volatility can be expected to remain high as we enter the new year. The primary reasons for this are political developments, signs that the global economy is slowing down, and the tighter monetary policy that is already in place in the United States and will affect Europe in the future. HBM Healthcare Investments will monitor these developments closely and, when necessary, increase the market hedge on a portion of our public portfolio once again – having closed out around two thirds of it owing to the sharp drop in share prices during the fourth quarter.
With a global portfolio of high quality private and public companies, as well as plenty of liquidity, the Company remains very well positioned even in the current market climate. HBM Healthcare Investments is confident that the investment strategy and the carefully crafted portfolio will continue to generate attractive added value, in the years to come.
The Quarterly Report December 2018 is available on the Company’s website https://www.hbmhealthcare.com/en/investors/financial-reports
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
HBM Healthcare completed a challenging calendar year 2018 for equity investments with a close to double-digit percent increase in value. The net asset value per share (NAV) rose by 9.9% to CHF 171.12 as at 31 December 2018. The share price gained 21.8%.
By contrast, the general market development in the healthcare sector showed a mixed picture for 2018. While the MSCI World Health Care Index rose by 3.1% in Swiss Franc terms, the Nasdaq Biotech Index (-9.6%) and the S&P Biotech ETF (-16.3%) posted significant declines in value.
HBM Healthcare Investments benefited primarily from value contributions from the portfolio of private companies (takeovers, IPO’s and revaluations of individual companies by third-party investors on the occasions of financing rounds). In addition, the partial market hedging on the portfolio of listed companies paid off. Due to the strong market correction in the fourth quarter of 2018, this hedging position was closed by about two-thirds.
HBM Healthcare Investments remains well positioned for the current volatile market environment. As of 31 December 2018, the Company had a high level of cash and cash equivalents of CHF 157 million (net of the CHF 46 million remaining repurchase obligation for market hedging). This corresponds to 13% of the net assets of about CHF 1.19 billion. With the expected completion of the acquisition of portfolio company Tesaro by GSK at the beginning of January 2019, cash and cash equivalents will increase by a further CHF 24 million or 2% of net assets. The share of listed companies is 53% (of which 7% hedged and 2% Tesaro) and that of private companies 43% of net assets. The volume of short-term and long-term liabilities of 9% of net assets remains moderate.
Result for the first 9 months of the financial year 2018/2019
Performance for the first nine months of the financial year 2018/2019, which ends on March 31, is also a positive, despite the sharp market correction in the 4th quarter of 2018. The net asset value per share rose by 7.0% and the share price by 12.8%. Based on the reported NAV as of 31 December 2018, HBM Healthcare Investments expects to report a net profit of about CHF 81 million for the first nine months of the financial year. In the same period of the previous year, net profit amounted to CHF 85.6 million.
These results are a preliminary based on the current state of the financial closing process. The definitive results will be published with the quarterly report December 2018 on 25 January 2019.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
2018
The second quarter of the 2018/2019 financial year saw HBM Healthcare Investments far exceed what had already been a very successful first-quarter result to make a profit of CHF 110 million. This takes net earnings for the first half of the year to CHF 177 million. As in the previous quarter, the share price rose almost twice as strongly as net asset value (NAV) per share, at 28.8 percent and 15.3 percent respectively, thereby further reducing the discount.
The increase in value came from private and public companies equally, confirming the Company's investment strategy. To ensure that the portfolio remains well balanced, HBM Healthcare Investments invested more than CHF 44 million in five private companies during the quarter just ended. It is also considering locking in the profits generated by certain public holdings. The partial hedge of the public portfolio remains in place.
HBM Healthcare Investments generated a profit of CHF 110.4 million in the second quarter of the 2018/2019 financial year, taking the total for the first half-year to CHF 176.9 million. Net asset value (NAV) per share rose by 15.3 percent in the first six months, while the share price soared by as much as 28.8 percent, thereby further reducing its discount to NAV.
The main contributors to the increase in profit were two private and two public companies.
The value of our holding in Y-mAbs Therapeutics was up by over CHF 48 million, to CHF 80 million, following the company's IPO in September. HBM Healthcare Investments took a CHF 23 million stake in Y-mAbs in October 2017, and increased its holding by a further CHF 9 million as part of the IPO.
Principia Biopharma, in which HBM Healthcare Investments made an initial investment of CHF 12 million in August 2018 as part of a private financing round, also went public in September. Here, too, the company took the opportunity of the IPO to increase its holding, by CHF 7 million. The value of this position had increased by CHF 17 million to CHF 36 million by the end of September.
BioArctic, which is listed on the Stockholm stock exchange, is working with partners Biogen and Eisai to develop a compound to treat Alzheimer's disease. The company attracted considerable attention in early July with the publication of positive data from a phase II trial. HBM Healthcare Investments invested just under CHF 8 million as the anchor investor when BioArctic went public in October 2017. Positive study results have seen the share price more than quadruple since then, contributing CHF 22 million to HBM Healthcare Investments’ earnings.
The Pacira Pharmaceuticals share price also recovered from a low level, taking the value of the investment CHF 18 million higher, to CHF 53 million.
New investments in private companies
In addition to the investment in Principia Biopharma referred to above, HBM Healthcare Investments has taken stakes in four more private companies since the end of June.
> USD 15 million was invested in Guangdong Jianke Pharmaceutical, China's leading online pharmacy and healthcare service platform. The company is planning to go public in the USA in 2019.
> Cardialen, a US medical technology company, is developing a small implant as a new means of treating cardiac arrhythmia. We invested USD 5 million in the company.
> A further USD 5 million was invested in Galera Therapeutics. Galera is conducting clinical trials of a compound to treat oral mucositis, a common side-effect of radiation therapies to treat cancer.
> USD 2 million was invested in the Chinese company Nuance Biotech as a co-investment with C-Bridge Capital. Nuance has a portfolio of products for the Chinese healthcare market. Among its other ventures, in June the company acquired the Chinese rights to the pain-killer Exparel® from Pacira.
Outlook
The two IPOs – of Principia and Y-mAbs – increased the proportion of public companies in the portfolio by nine percentage points compared with the previous quarter. They now account for 66 percent of net assets, or 55 percent when the market hedge is taken into account. Private companies (including funds and milestone payments) contracted slightly to 36 percent. The portfolio thus remains carefully balanced and well diversified.
In view of further potential IPOs in the future, HBM Healthcare Investments will realise some of the increase in value on the public companies and use the liquidity this generates for new investments and follow-on financing in the private companies segment. With these new investments, as well as upward revaluations following new financing rounds, the company expects the proportion of private companies in the portfolio to rise again in the months to come.
All in all, HBM Healthcare Investments remains confident about future growth in the value of its portfolio companies, although uncertainty about general market trends persists where the public companies are concerned. HBM Healthcare Investments will therefore maintain the partial market hedge of around a fifth of this part of the portfolio.
The Half-Year Report September 2018 is available on the Company’s website https://www.hbmhealthcare.com/en/investors/financial-reports.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
HBM Healthcare Investments’ net asset value per share (NAV) increased by 15.3% to CHF 184.86 in the first six months of the current financial year 2018/2019. The share price rose by 28.8% to CHF 178.40.
Based on the reported NAV, HBM Healthcare Investments expects a profit of around CHF 176 million for the first six months of the financial year. This compares to a profit of CHF 13.6 million for the same period of the previous year.
These results are preliminary based on the current state of work in preparing the financial statements. The semi-annual report September 2018 will be published on 25 October 2018.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
With Y-mAbs Therapeutics (Nasdaq: YMAB), another privately held portfolio company of HBM Healthcare Investments went public on Friday last week. The company issued 6 million new shares at a price of USD 16.00 per share, raising a total of USD 96 million. Y-mAbs’ share price rose to USD 24.00 (+50%) on the first trading day.
HBM Healthcare Investments invested USD 23.2 million in Y-mAbs in October 2017 and increased the position by a further USD 9.4 million in the IPO. Following the IPO, HBM Healthcare Investments owns 3.1 million shares worth USD 73.8 million, representing an ownership of approximately 9% in the company. The value increase of USD 41.1 million on the Y-mAbs investment raises the net asset value per HBM-share (NAV) by CHF 4.82 (+2.7%).
Y-mAbs is a late-stage clinical biopharmaceutical company focused on the development and commercialization of novel, antibody-based therapeutic products for the treatment of cancer. The Company has a broad and advanced product pipeline, including two pivotal-stage product candidates, naxitamab and omburtamab, which target tumors that express GD2 and B7-H3, respectively.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
Principia Biopharma (Nasdaq: PRNB), a so far privately held company in the portfolio of HBM Healthcare Investments, successfully completed its planned IPO on Friday last week. The company issued 6.25 million new shares at the upper end of the price range at USD 17.00 per share, raising a total of USD 106.25 million for the company. On the first trading day on Friday, the stock price rose to USD 32.65 (+92%).
HBM Healthcare Investments invested first USD 12 million in Principia in a private financing round prior to the IPO in August 2018 and increased its stake by an additional USD 7.2 million in the IPO. Following the IPO, HBM Healthcare Investments holds approximately 1.26 million shares worth USD 41.1 million. As a result of the IPO, the net asset value per HBM-share (NAV) increases by CHF 2.58 (+1.5%).
Headquartered in South San Francisco, California (USA), Principia Biopharma is a clinical-stage biopharmaceutical company dedicated to bringing transformative oral therapies to patients with significant unmet medical needs in immunology and oncology.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
The reduction of the share capital by means of cancellation of 80’000 registered shares and the par value reduction of CHF 1.50 per share, which were both approved at the Annual Shareholders’ Meeting on 25 June 2018, have been registered in the commercial register.
The share capital of HBM Healthcare Investments Ltd now amounts to CHF 396’720’000.-, divided into 6'960'000 registered shares with a par value of CHF 57.00 each. The par value repayment of CHF 1.50 to Shareholders will be made on 21 September 2018 (ex-date 19 September 2018).
Contact
For further information, please contact Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
Jianke, a privately held company based in Guangzhou, China, today announced the closing of a USD 130 million financing round. HBM Healthcare Investments participated with USD 15 million in this financing.
Jianke was founded in 2006 and is the largest online B2C pharmacy and healthcare services platform in China. The company has served more than 100 million customers in China by offering 680’000 stock keeping units (SKUs) and its healthcare advisory services.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments got off to a strong start in the first quarter of the 2018/2019 financial year, generating a profit of CHF 66.6 million for the first three months to 30 June 2018. Net asset value (NAV) per share rose by 5.8 percent to CHF 170.50, while the share price advanced by 13 percent to CHF 157.20.
The portfolio remains well diversified and balanced. Thanks to a number of new investments in private companies, this allocation now accounts for 39 percent of net assets, while the proportion of public portfolio companies has fallen slightly to 57 percent (corresponding to 45 percent when the market hedge is taken into account). Management remains confident about prospects for the future.
A number of acquisitions, initial public offerings and financial transactions on the part of portfolio companies contributed to this pleasing profit for the quarter: Eli Lilly took over the public immuno-oncology company ARMO BioSciences (profit contribution for the quarter under review: CHF 22.3 million) for USD 1.6 billion. Prior to and during the IPO, HBM Healthcare Investments invested a total of USD 22 million in ARMO. This investment generated a total profit of USD 57 million.
The quarter also saw AveXis, which operates in the gene therapy field, acquired by Novartis (profit contribution for the quarter under review: CHF 8.5 million). HBM Healthcare Investments had invested a total of USD 14 million in the public company since 2016 and realised an aggregate profit of USD 17 million from its holding.
Meanwhile, private company Aptinyx completed a successful IPO (profit contribution for the quarter under review: CHF 13.8 million). HBM Healthcare Investments took an initial USD 6.5 million stake in Aptinyx in December 2017 and increased its holding by a further USD 2 million as part of the IPO.
The takeover of private company TandemLife (Cardiac Assist) by LivaNova was completed at the beginning of April. HBM Healthcare Investments received about CHF 24 million from the upfront payment.
In addition, the holding in private Indian company Sai Life Sciences performed very successfully (profit contribution for the quarter under review: CHF 10.6 million). A major US private equity investor acquired a significant stake from co-investors and will provide the company with further growth capital. HBM Healthcare Investments did not exercise its right to sell its stake and will instead participate in the financing for the company. The holding in Sai Life Sciences has therefore been revalued on the basis of the company’s value following this transaction.
The 3.8 percent appreciation in the US dollar against the Swiss franc also had a positive effect on results for the quarter.
New investments in private companies
A capital commitment of USD 10 million was made to C-Bridge Capital during the quarter under review. C-Bridge is a private equity investor which specialises in the Chinese healthcare sector. In partnership with C-Bridge, HBM Healthcare Investments has made an initial direct investment of USD 3 million in Everest Medicines. Everest is developing a platform to licence compounds from abroad and distribute them in the Chinese healthcare market.
Additionally, a further four new investments were made in private companies:
> The Irish company Sublimity Therapeutics will receive a total of EUR 8 million, the first tranche of which – EUR 3.5 million – has already been paid. The company is conducting clinical trials of an oral formulation for a compound to treat patients with ulcerative colitis, a chronic inflammation of the colon.
> USD 4 million went to Corvidia Therapeutics, a spin-off of AstraZeneca that is based near Boston. Corvidia has an antibody to treat patients with chronic kidney disease in phase II clinical development.
> An investment commitment totalling EUR 5 million was made to Belgian company iTeos Therapeutics. The first tranche of EUR 1.6 million has been paid to date. iTeos operates in the immuno-oncology field.
> USD 5 million was invested in holding company Cure Everlife. USD 3 million of the total has been paid to date. Based in Singapore, Everlife is building a distribution platform for medical devices in south-east Asia.
Asset allocation
The new investments increase the share of the portfolio accounted for by private companies (including funds and milestone payments) slightly to 39 percent of net assets. The takeover of ARMO BioSciences meant that the share of net assets accounted for by public companies fell to 57 percent. About a fifth of this share remains hedged, further reducing the general market risk attached to public companies to 45 percent of net assets.
The portfolio thus displays a healthy balance between private and public companies with significant value-creation potential. In addition, HBM Healthcare Investments has sufficient liquidity to make new investments in private companies and to seize opportunities that arise in the public segment.
Outlook
Prospects remain largely unchanged. HBM Healthcare Investments expects the portfolio of private companies to generate further value over the next 18 months thanks to IPOs, trade sales and financing rounds. Further attractive new investments in private companies will also be finalised in the near future.
A number of potentially value-generating events – such as clinical study data and approval decisions – are expected for the portfolio of public companies. HBM Healthcare Investments expects these to have a positive overall effect on the Company’s net asset value.
All in all, the portfolio is well positioned in the current market climate in terms of both its mix between private and public companies, and its geographical allocation in the USA, Europe and Asia.
The Quarterly Report June 2018 is available on the Company’s website https://www.hbmhealthcare.com/en/investors/financial-reports
Contact
For further information, please contact Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
.
At today’s ordinary Shareholder’s Meeting of HBM Healthcare Investments Ltd the Shareholders approved all proposals submitted by the Board of Directors. A total of about 44% of all shares were represented at the Shareholders’ Meeting.
The Chairman of the Board of Directors, the Members of the Board of Directors as well as the Members of the Compensation Committee were all re-elected for a further term of one year. The Shareholders also approved the proposed compensation to the Board of Directors and to the Management.
Along with the reduction of the share capital by means of cancellation of 80’000 registered shares, the Shareholders also approved a withholding tax-exempt distribution from the reserve from capital brought in of CHF 5.50 per share. The cash payment to Shareholders will be made on 29 June 2018. Until 26 June 2018, the shares will be traded with entitlement for the cash distribution (as from 27 June 2018 without such entitlement, ex-date).
Further, the Shareholders approved an additional withholding tax-exempt cash distribution of CHF 1.50 per share by means of a par value reduction. The cash payment to Shareholders will be made after the expiration of the legal deadlines, presumably on 21 September 2018 (ex-date 19 September 2018).
After the entry of the two capital reductions in the commercial register, which is expected in early September 2018, the new share capital of HBM Healthcare Investments Ltd is CHF 396’720’000.-- and is divided in 6'960'000 registered shares with a par value of CHF 57.-- each.
The presentation shown at the Shareholders’ Meeting is available on the Company’s website http://hbmhealthcare.com/en/investors/information
Contact
For further information, please contact Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
The initial public offering (IPO) of Aptinyx (Nasdaq: APTX), a company in the portfolio of HBM Healthcare Investments, attracted considerable interest. The company increased its offering from 5.3 million shares to 6.4 million shares. The new shares were placed at a price of USD 16.00 per share, at the high end of the price range, which raised a total of USD 102 million in new capital for the company. On the first trading day, the share price rose to USD 20.20 (+26.3%).
HBM Healthcare Investments first invested USD 6.5 million in Aptinyx in December 2017 (purchase of 0.79 million shares at USD 8.22) and increased its stake by an additional USD 2 million in the initial public offering. Following the IPO, HBM Healthcare Investments holds approximately 0.92 million shares worth USD 18.55 million. As a result of the IPO, the net asset value per HBM-share (NAV) increases by CHF 1.21 (+0.68%).
Aptinyx is developing novel small molecule therapeutics for neurological disorders.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
Zug, 18. May 2018
HBM Healthcare Investments Ltd
Bundesplatz 1, 6300 Zug
Invitation to the 17th Ordinary Shareholders' Meeting
Monday, 25 June 2018, 2:00 pm
Theater Casino Zug
Artherstrasse 2 - 4
6300 Zug
The admission office opens at 1:30 pm.
Agenda and motions of the Board of Directors:
1. Statutory financial statements and group financial statements 2017/2018;
reports of the auditors
Motion: Approval of statutory financial statements and group financial statements for the 2017/2018 business year
2. Discharge from liability of the members of the Board of Directors and Management
Motion: Discharge from liability of the members of the Board of Directors and of the Management for the 2017/2018 business year
3. Appropriation of results
Motions:
3.1 Appropriation of disposable profit of CHF 136'370'716 as follows:
in CHF | 2017/2018 | |
profit for the year profit carry forward | 54'974'908 81'422'808 | |
disposable profit | 136'370'716 | |
– allocation to the general legal reserve | 0 | |
– carry forward to the new account | 136'370'716 | |
3.2 Withholding tax-exempt cash distribution from the reserve from capital brought in of CHF 5.50 per entitled share*, i.e. a maximum of CHF 38.3 million
* All registered shares in HBM Healthcare Investments Ltd which are not held by the Company itself are entitled to receive a distribution. Changes in the Company's holdings may still change the number of entitled shares.
In view of the business result, the Board of Directors proposes first a cash distribution of CHF 5.50 per share, in the form of a withholding tax-exempt dividend from the reserve from capital brought in. Should the motion be passed, the cash payment of CHF 5.50 per registered share will be made on 29 June 2018. Registered shares which are entitled to receive the dividend will be traded for the last time on 26 June 2018. As of 27 June 2018 they will be traded without the distribution entitlement (ex date). An additional distribution is proposed in agenda item 9.2.
4. Elections regarding the Board of Directors
4.1 Re-elections of the Chairman and of the Members of the Board of Directors
Motions:
a. Re-election of Mr Hans Peter Hasler as Chairman of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
b. Re-election of Prof. Dr h.c. mult. Heinz Riesenhuber as member of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
c. Re-election of Dr Eduard Holdener as member of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
d. Re-election of Mr Robert A. Ingram as member of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
e. Re-election of Dr Rudolf Lanz as member of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
f. Re-election of Mr Mario Germano Giuliani as member of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
Mr Hans Peter Hasler has been a member of the Board of Directors since 2009, and its Chairman since 2011. To date he also was a member of the Compensation Committee. He knows the biotech business, having spent eight years in leading positions at Biogen Idec and, previously, Wyeth. Mr Hasler is CEO of Vicarius Pharma, Chairman of the Board of Directors of MIAC AG (Medical Imaging Analysis Center, a not-for-profit organisation of the University Hospital of Basel), member of the Board of Directors of Dr. Reddy's Laboratories and Minverva Neurosciences.
Mr Prof. Dr Heinz Riesenhuber has been a member of the Board of Directors since 2001, and its Vice-Chairman since 2006. He has also been a member of the Audit Committee. He is a certified chemist and has 15 years' industry experience as the CEO of subsidiaries of Metallgeschaft AG. Prof. Riesenhuber was a member of the German Federal Parliament from 1976 until 2017 and served as Federal Minister of Research and Technology from 1982 to 1993. Prof. Riesenhuber is a member of the Investors Committee of Heidelberg Innovation BioScience Venture II, as well as Chairman of the advisory board of Rock Tech Lithium Inc..
Mr Dr Eduard Holdener has been a member of the Board of Directors since 2008. He is an onco-haematologist, and has 14 years' clinical experience in a hospital environment in Switzerland and the USA, as well as 22 years' experience in clinical research and development at Roche. In his last eight years at Roche, he was Head of Global Clinical Deve-lopment, as well as member of the Pharma Executive and the Corporate Executive Committee. Dr Holdener is Chairman of the Board of Directors and CEO of NovImmune SA.
Mr Robert Ingram has been a Member of the Board of Directors since 2006. He is also a member of the Nominating Committee and a member of the Compensation Committee. He is an economist with world-wide knowledge and personal network in the pharma industry, especially in the USA, where the majority of HBM Healthcare Investments' portfolio companies are based. Mr Ingram worked at GlaxoSmithKline for 20 years, in positions including Chairman, COO and CEO. He is Chairman of the Board of Directors of Novan Inc., Viamet Pharmaceuticals Inc., Cree Inc. and BioCryst Pharmaceuticals Inc..
Mr Dr Rudolf Lanz has been a member of the Board of Directors since 2003. He is also a member of the Audit Committee and a member of the Nominating Committee. He has a master's degree in economics and a doctorate in law, and has longstanding professional experience in acquisitions, divestments, mergers and major financing transactions. For 20 years, Dr Lanz worked mainly in management positions at Ernst & Young, before founding "The Corporate Finance Group" with partners, and becoming the Chairman of its Board of Directors. Dr Lanz is a member of the Board of Directors of Pearls Fashion Holding AG and of MIAC AG (Medical Imaging Analysis Center, a not-for-profit organisation set up by the University Hospital of Basel).
Mr Mario Germano Giuliani has been a member of the Board of Directors since 2012. He is also a member of the Compensation Committee. He is an economist. In the course of 16 years at his family pharmaceutical company, Milan-based Giuliani SpA, he has held positions at all levels: member of the Board of Directors since 1999, Chairman of the Board of Directors from 2003-2014 and Chief Executive Officer from 2001-2014. Mr. Giuliani is also a member of the Investment Committee of Mosaix Ventures LLP and Royalty Pharma, member of the Board of Directors of Jukka LLC as well as Chairman of the Board of Directors of NGR (Monaco) SAM and Fair-Med Healthcare AG.
4.2 Re-election of the members of the Compensation Committee
Motions:
a. Re-election of Mr Mario Germano Giuliani as a member of the Compensation Committee to the close of the 2019 Ordinary Shareholders' Meeting
b. Re-election of Mr Robert Ingram as a member of the Compensation Committee to the close of the 2019 Ordinary Shareholders' Meeting
To date Mr Hans Peter Hasler was a member of the Compensation Committee too. He now wishes to refrain from re-election to this committee. The Board of Directors sees no need for a replacement.
5. Compensation to the Board of Directors and to the Management
5.1 Fixed compensation to the Board of Directors
Motion: Approval of the maximum fixed compensation to the Board of Directors of CHF 450’000 (including social security contributions) for the time between the Ordinary Shareholders’ Meetings 2018 and 2019
5.2 Variable compensation to the Board of Directors
Motion: Approval of the variable compensation to the Board of Directors of CHF 1'017'600, plus pro rata social security contributions of CHF 36'082, for the 2017/2018 business year
5.3 Fixed compensation to the Management
Motion: Approval of the maximum fixed compensation to the Management of CHF 330‘000 (including social security contributions) for the time between 1 July 2018 and 30 June 2019
The amounts proposed are explained in detail in the Compensation Report. Due to the fact that the High Water Mark has been exceeded, the Members of the Board of Directors are entitled to a variable compensation for the financial year 2017/2018. There is currently no agreement for a variable compensation to the Management in place.
6. Appointment of auditors
Motion: Re-appointment of Ernst & Young AG, Zurich, as auditors of the statutory financial statements and the group financial statements for the 2018/2019 business year
7. Appointment of independent proxy-holder
Motion: Appointment of KBT Treuhand AG, Zurich, as independent proxy-holder to the close of the 2019 Ordinary Shareholders' Meeting
8. Reduction of share capital by means of cancellation of own shares
Motion: (1) Reduction of share capital of CHF 411'840'000.-- to CHF 407'160'000.-- by cancellation of 80‘000 registered shares at a par value of CHF 58.50 each;
(2) Formal acknowledgement of the audit report from Ernst & Young AG, which states that creditor receivables are covered in full even after the share capi-tal has been reduced;
(3) Amendment of Art. 3 of the Articles of Association, concerning share capital, as follows (changes marked):
"The share capital of the corporation is CHF 411'840'000.-- 407'160'000.-- and is divided in 7'040'000 6‘960‘000 registered shares with a par value of CHF 58.50 each. All shares are fully paid in."
As part of the 2016 share buy-back programme, up to the date on which this invitation was sent out, the Company acquired another 80‘000 of its own shares, i.e. about 1.1% of the shares outstanding, via a second trading line on SIX Swiss Exchange AG, which are to be cancelled at the Ordinary Shareholders' Meeting.
9. Nominal value reduction and partial repayment (additional distribution)
Motion: (1) Reduction of the share capital from CHF 407'160'000.-- [after execution of agenda item 8] to CHF 396'720'000.-- by reducing the par value of the 6'960'000 registered shares from CHF 58.50 to CHF 57.-- and repayment of CHF 1.50 per share to the shareholders;
(2) Formal acknowledgement of the audit report of Ernst & Young AG, which states that creditor receivables are covered in full even after the share capital has been reduced;
(3) Amendment of Art. 3 of the Articles of Association, concerning the share capital, as follows (changes marked, depending on agenda item 8):
"The share capital of the corporation is CHF 407,160,000.-- 396'720'000.-- and is divided in 6'960'000 registered shares with a par value of CHF 58.50 57.-- each. All shares are fully paid-in."
10. Miscellaneous
Documentation
The 2017/2018 annual report, including the statutory financial statements, the group financial statements, the compensation report, as well as the reports of the auditors, is sent out to all shareholders entered in the Shareholders' Register unless they have requested not to receive a copy. It is also available for review at Bundesplatz 1, 6300 Zug, Monday to Friday from 9.00 am to 5.00 pm. It can be ordered from the same address. Please call +41 (0)41 710 75 77. The same applies to the Ernst & Young AG audit reports with regard to agenda items 8 and 9.1. The annual report is also available on the www.hbmhealthcare.com website.
Admission cards / voting materials
Shareholders who are entered in the Shareholders' Register with the right to vote as at 5.00 pm on 15 June 2018 (the qualifying date) will receive the invitation as well as, upon request, a personal admission card and the voting materials directly from the company.
Shareholders who are entitled to vote according to the Shareholders' Register as of the qualifying date may participate in the Ordinary Shareholders' Meeting. Each share carries one vote. Shareholders who have sold their shares before the Ordinary Shareholders' Meeting takes place are no longer entitled to vote.
Granting of powers of attorney
Shareholders who do not participate in person in the Ordinary Shareholders' Meeting may appoint as a representative a different shareholder, a third party, or Mr Reto Leemann, chartered fiduciary agent, KBT Treuhand AG, Zimmergasse 16, 8032 Zurich, as independent proxy holder in the sense of Art. 689c of the Swiss Code of Obligations. Granting of powers of attorney to members of governing bodies or custody accounts is illegitimate.
The power of attorney on the registration form must be filled in accordingly, signed and returned to the independent proxy holder, or to the Shareholders' Register at Computershare Switzerland Ltd., Baslerstrasse 90, CH-4600 Olten, by 20 June 2018 at the latest.
In the absence of any specific instructions, the independent proxy-holder will be deemed to have been instructed to exercise the voting right in favour of the motions of the Board of Directors. This also applies to motions put forward in the Ordinary Shareholders’ Meeting.
As an alternative to written power of attorneys, Shareholders have the opportunity to submit power of attorneys and voting instructions to the independent proxy-holder electronically via the platform https://ip.computershare.ch/hbmag of Computershare Switzerland Ltd. Shareholders who wish to make use of this may follow the enclosed instructions regarding the opening of a Shareholder account and the registration to the Ordinary Shareholders’ Meeting.
Admission office
The admission office opens at 1.30 pm on the day of the Ordinary Shareholders' Meeting. Shareholders are asked to present their admission cards at the entrance.
Registration
We ask you kindly to return the registration form by 20 June 2018 if you intend to participate in the Ordinary Shareholders' Meeting.
Reception
The Board of Directors is pleased to invite you to a reception after the meeting.
Zug, 1 June 2018 On behalf of the Board of Directors
The Chairman: Hans Peter Hasler
Due to the ongoing debate and last week’s decision by the Council of States in Switzerland on the tax bill 17, the Board of Directors of HBM Healthcare Investments AG has decided to amend agenda item 9 of the invitation for the Annual Shareholders Meeting taking place on 25 June 2018 as follows:
The two motions of the Board of Directors for a par value reduction of CHF 30.- per share to increase the reserve from capital brought in (agenda item 9.1) and the subsequent cash payment of CHF 1.50 per share from this increased reserve (agenda item 9.2) shall be limited to a simple reduction in par value with a cash payment of CHF 1.50 per share.
The proposed cash distribution for the 2017/2018 financial year thus remains unchanged at a total of CHF 7.00 per share. If approved, CHF 5.50 per share will be paid, free of withholding tax, from the existing capital reserve after the Annual General Meeting (payment date June 29, 2018, ex date June 27, 2018). A further CHF 1.50 per share will be paid after the statutory deadline as a withholding tax-exempt par value repayment, expected on September 21, 2018 (ex date September 19, 2018).
This amended resolution does not change the distribution policy of the company. It merely serves the purpose of optimally preserving the company's withholding tax-free distributable substrate. This is due to the development in the ongoing debate on the tax bill 17 concerning the introduction of a possible repayment rule for distributions from the capital reserve and the legal uncertainty currently associated with it.
Shareholders will receive the voting documents for the amended motion under agenda item 9 by post this week.
Contact
For further information, please contact Erwin Troxler on +41 41 710 75 77, or at erwin.troxler@hbmhealthcare.com
Due to the ongoing debate and last week’s decision by the Council of States in Switzerland on the tax bill 17, the Board of Directors of HBM Healthcare Investments AG has decided to amend agenda item 9 of the invitation for the Annual Shareholders Meeting taking place on 25 June 2018 as follows:
The two motions of the Board of Directors for a par value reduction of CHF 30.- per share to increase the reserve from capital brought in (agenda item 9.1) and the subsequent cash payment of CHF 1.50 per share from this increased reserve (agenda item 9.2) shall be limited to a simple reduction in par value with a cash payment of CHF 1.50 per share.
The proposed cash distribution for the 2017/2018 financial year thus remains unchanged at a total of CHF 7.00 per share. If approved, CHF 5.50 per share will be paid, free of withholding tax, from the existing capital reserve after the Annual General Meeting (payment date June 29, 2018, ex date June 27, 2018). A further CHF 1.50 per share will be paid after the statutory deadline as a withholding tax-exempt par value repayment, expected on September 21, 2018 (ex date September 19, 2018).
This amended resolution does not change the distribution policy of the company. It merely serves the purpose of optimally preserving the company's withholding tax-free distributable substrate. This is due to the development in the ongoing debate on the tax bill 17 concerning the introduction of a possible repayment rule for distributions from the capital reserve and the legal uncertainty currently associated with it.
Shareholders will receive the voting documents for the amended motion under agenda item 9 by post this week.
Contact
For further information, please contact Erwin Troxler on +41 41 710 75 77, or at erwin.troxler@hbmhealthcare.com
Kindly receive hereafter the media release
Publication of Annual Report 2017/2018 and Invitation to the Ordinary Shareholders' Meeting
the
Invitation to the 17th Ordinary Shareholders' Meeting
as well as the