News
2023
The invitation to the 22nd Ordinary Shareholders’ Meeting on 19 June 2023 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/en/investors/shareholders-meeting.
HBM Healthcare Investments also published today its Annual Report 2022/2023 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.
HBM Healthcare Investments reports a loss of CHF 146 million for the 2022/2023 financial year. Inflation and rising interest rates led to declining valuations for technology and growth stocks around the globe. Four profitable acquisitions, two IPOs, and the value increase of several operationally successful portfolio companies did not compensate for the decline.
- Net asset value per share (NAV) -7.4 percent, share price -18.9 percent
- Healthcare sector remains attractive and HBM Healthcare Investments a predestined investment instrument
- Continuation of distribution policy with a yield of 3.5 percent
Declining valuations for growth stocks
The market environment with inflation and rising interest rates had a negative impact on the valuations of technology and growth stocks. The biotechnology sector was no exception and the segment of small and medium-sized companies in particular – the main focus of HBM Healthcare's investment strategy – underwent a significant valuation correction.
In addition, the slowdown in economic growth and the prolonged restrictive policy in dealing with the Covid-19 pandemic in China affected the valuation of HBM’s largest holding, Cathay Biotech. Listed on the Shanghai stock exchange, Cathay lost some of the value growth it had achieved in previous years. However, replacing chemical products with bio-based input made from renewable raw materials remains a major trend for the future. As a global leader in synthetic biology, Cathay Biotech has a strong position in this growth market thanks to its technology and its production capacities.
The decision by the US Food and Drug Administration (FDA) to deny the portfolio company Y-mAbs Therapeutics marketing approval for its cancer therapy omburtamab on the grounds of inconclusive evidence of efficacy was unexpected.
In the past financial year, positive contributions to earnings came from the increase in value of various operationally successful private companies as well as from two IPOs and four acquisitions. However, this did not fully compensate for the negative performance.
The portfolio components contributed to the annual result as follows:
The portfolio components contributed to the annual result as follows:The portfolio of private companies closed positively, adding a total of CHF 32 million in value. The IPOs of Mineralys Therapeutics and Acrivon Therapeutics were responsible for a value increase of CHF 24 million. Fangzhou, operator of the digital healthcare platform Jianke.com in China, completed financing rounds in preparation for an IPO in Hong Kong, which increased the value of the investment by CHF 33 million. Swixx BioPharma, the largest position in the private companies portfolio, strongly increased sales and profit in the 2022 financial year, which allowed the company to return some of its excess capital to shareholders. In addition to the dividend received, the investment thus was appreciated by CHF 20 million. Value adjustments totalling CHF 45 million were necessary for companies that did not develop according to plan or had raised capital at lower valuations.
The funds' portfolio recorded a decline in value of CHF 5 million. Distributions of CHF 16 million were offset by capital calls of CHF 20 million.
The portfolio of public companies shows a total decrease in valuation of CHF 164 million. Significant profit contributions resulted from the four acquisitions of Turning Point Therapeutics (CHF 41 million), ChemoCentryx (CHF 21 million), Biohaven Pharmaceuticals (CHF 20 million) and Sierra Oncology (CHF 16 million). The main impairments were in Cathay Biotech (CHF 98 million), Y-mAbs Therapeutics (CHF 24 million), Harmony Biosciences (CHF 16 million), Pacira Biosciences (CHF 15 million) and Monte Rosa Therapeutics (CHF 10 million). The remaining public companies closed net CHF 99 million lower.
Other assets, which includes dividend income and profit contributions from foreign currency hedges, increased the result by CHF 20 million.
The management fee, which depends on the Company’s average net assets and market capitalisation, as well as administration cost decreased to CHF 30 million compared to the previous year. The financial result was positive at CHF 1 million due to the interest income received.
Selective additions to the portfolio
HBM Healthcare Investments made a new investment of USD 12 million in the private company ArriVent Biopharma in the final quarter of the reporting year. The US-based company is testing the compound furmonertinib in a pivotal phase III trial for the treatment of patients with EGFRmutated (Epidermal Growth Factor Receptor) non-small cell lung cancer. The compound is already approved as a cancer therapy in China. A further CHF 69 million were invested as follow-on financing to nineteen existing private companies.
In the portfolio of public companies, the proceeds from the four acquisitions were used to build up and expand various new and existing holdings.
Overall, the portfolio remains well balanced. Of the total assets of just under CHF 2 billion, 35 percent are invested in private companies. 43 percent are in public companies (thereof 26 percent formerly private companies), 9 percent in funds and 1 percent in other assets. The share of cash and cash equivalents stands at 12 percent. The latter will serve, among other things, the repayment of the CHF 50 million bond due in July and the proposed par value repayment.
Attractive distribution yield of 3.5 percent
Its strong financial position allows HBM Healthcare Investments to continue its distribution policy. The Board of Directors proposes to the Shareholders’ Meeting a par value repayment of CHF 7.50 per share, free of withholding tax. The dividend yield thus remains at the previous year’s level of 3.5 percent.
Outlook
Various private portfolio companies are developing very well operationally and hold the potential for higher valuations, which are likely to materialise in future financing rounds, IPOs or takeovers. Value adjustments were made for the less performing companies. Overall, HBM’s portfolio of private companies should continue to make a positive value contribution in the coming years.
If, as expected, the cycle of rising interest rates comes to an end in the foreseeable future, this would ease the pressure on valuations of public companies, and investors would once again increasingly focus on the companies’ successes in clinical development and their operating results. HBM Healthcare will use the current favourable valuation level to selectively expand its portfolio of public companies.
Avid takeover activity in recent months at handsome premiums confirms the attractiveness of the biotechnology sector as an investment universe. High medical need, scientific and technological advances, and demographic change remain strong drivers of long-term growth in the healthcare sector. This is not likely to change in the immediate future, and HBM Healthcare's portfolio is well positioned to benefit from this.
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 26 May 2023 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.
HBM Healthcare Investments closed the fourth quarter of the 2022/2023 financial year ended on 31 March with a small increase in value. The net asset value per share (NAV) increased by 0.5 percent to CHF 254.80. The share price rose by 6.5 percent to CHF 214.00.
High level of cash and cash equivalents allows continuation of cash distribution policy
For the 2022/2023 financial year, the NAV decreased by 7.4 per cent. The private companies (incl. funds) recorded a positive development overall and increased the NAV by 1.6 percent. The listed companies and the other components of the portfolio (incl. costs) reduced the net asset value by 7.7 and 1.3 percent respectively.
Based on the reported NAV as at 31 March, HBM Healthcare Investments expects a net loss of CHF 146 million for the financial year 2022/2023.
The balanced portfolio and the high level of cash and cash equivalents of CHF 232 million allow for the repayment of the CHF 50 million bond due in July from cash on hand as well as the continuation of the company's investment activities and distribution policy.
The figures presented are the preliminary and unaudited results based on the current status of the closing process. The final annual result will be published on Friday, 12 May 2023.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments refers to its media release dated 30 January 2023. Dr Andreas Wicki has recovered from his health matters and will fully resume his duties as Chief Executive Officer of HBM Healthcare Investments and with the investment adviser HBM Partners as of Monday 3rd April. The Boards of Directors and the employees of HBM Healthcare Investments and HBM Partners would like to thank Chairman Hans Peter Hasler for his increased commitment over the past weeks and are delighted to welcome Andreas Wicki back.
HBM Healthcare Investments also announces the closing of a new investment of USD 12 million in the private US-based company ArriVent Biopharma. The investment is part of ArriVent’s USD 155 million oversubscribed Series B financing. The proceeds of the financing will be used to support pivotal Phase 3 and additional studies with ArriVent’s lead product candidate furmonertinib as well as the continued expansion of its pipeline.
Furmonertinib, a highly brain-penetrating, mutation-specific EGFR kinase inhibitor, is approved in China as a cancer therapy for patients with EGFR-mutated non-small cell lung cancer. Furmonertinib is being developed in China by Allist Pharmaceuticals and in the rest of the world by ArriVent Biopharma.
Contact
For further information, please contact Erwin Troxler on +41 41 710 75 77, or at erwin.troxler@hbmhealthcare.com.
Mineralys Therapeutics (Nasdaq: MLYS), a previously private company in the portfolio of HBM Healthcare Investments, successfully completed its IPO last Friday. The company placed 12 million new shares at a price of USD 16.00 per share, raising USD 192 million in new capital. On the first day of trading, the share price rose to USD 18.44 (+15.25%).
HBM Healthcare Investments has invested a total of USD 19 million in the company in two private financing rounds since February 2021. The investment was previously valued at USD 27 million. In addition, HBM Healthcare Investments also participated in the IPO. Based on Friday's closing share price, the investment is valued at USD 57 million. This results in an increase of the net asset value per HBM-share (NAV) of CHF 3.60.
Mineralys Therapeutics is a clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by abnormally elevated aldosterone. The company's lead product candidate, lorundrostat, is a orally administered, highly selective aldosterone synthase inhibitor (ASI) that is initially developed for the treatment of patients with hypertension.
Contact
For further information, please contact Erwin Troxler on +41 41 710 75 77, or at erwin.troxler@hbmhealthcare.com.
Dr Andreas Wicki, Chief Executive Officer of HBM Healthcare Investments, will be taking a brief leave of absence to adress a treatable health matter. Dr Wicki will remain involved to the extent practicable.
In the interim, Hans Peter Hasler, Chairman of the Board of Directors, will be responsible for the management of HBM Healthcare Investments as Executive Chairman, together with CFO Erwin Troxler. They will be actively supported by Dr Matthias Fehr and Dr Ivo Staijen, who have been leading the investment teams for private equity and public equity at the investment advisor HBM Partners for several years.
The Board of Directors and the employees of HBM Healthcare Investments and HBM Partners wish Andreas Wicki a speedy recovery.
Contact
For further information, please contact Erwin Troxler on +41 41 710 75 77, or at erwin.troxler@hbmhealthcare.com.
- Quarter closes with loss of CHF 120 million, mainly due to currency developments. Hedging partially compensates for decline
- 9-month period closes with loss of CHF 155 million, mainly due to lower stock market valuation of the largest portfolio position
- Portfolio remains well balanced and the value creation potential intact
- High levels of cash and cash equivalents create financial latitude in volatile markets
Quarter under review marked by currency developments
HBM Healthcare Investments closed the third quarter of the 2022/2023 financial year as at the end of December 2022 with a loss of CHF 120 million. The net asset value per share (NAV) declined by 6.4 percent to CHF 253.59 during this period, and the share price fell by 9.3 percent to CHF 201.00.
Currency developments accounted for over two-thirds of this decrease in value: The US dollar depreciated by 6.3 percent against the Swiss franc in the 3-month period, the Chinese yuan by 3.4 percent. The currency hedge, which was slightly increased in October 2022, partially compensated for this decline. After the US dollar had dropped in mid-November, the hedge was closed. Overall, currency developments burdened the result in the quarter under review by around CHF 84 million.
9-month period influenced by market sentiment
A loss of CHF 155 million resulted for the first nine months of the 2022/2023 financial year. The NAV declined by 7.8 percent and the share price fell disproportionately by 23.7 percent.
In this 9-month period, the impact of foreign currencies of CHF 25 million on the result has been much less accentuated. Rather, the result for this period is mainly owed to the market-driven decline in the market capitalisation of the largest investment, Cathay Biotech (share price -21 percent).
Most relevant market indices in the health sector also declined during this period. The broad-based MSCI World Health Care Index recorded a minus of 1.9 percent. In the biotech segment, large and mid-cap companies outperformed small caps: the Nasdaq Biotechnology Index (NBI) rose by 1.7 percent, while the SPDR S&P Biotech (XBI) declined by 7.7 percent.
Developments in the portfolio of private companies
The value of the portfolio of private companies decreased by a total of CHF 41 million in the quarter under review, of which CHF 28 million was due to currency developments.
The following events stood out:
- Swixx Biopharma: With 2022 sales expected to jump to over EUR 700 million, the company returned part of its surplus liquidity to shareholders as a capital repayment. HBM Healthcare Investments recognised dividend income of CHF 10 million in its income statement.
- Fangzhou, operator of the Chinese healthcare platform Jianke.com, is planning an IPO on the Hong Kong Stock Exchange and filed its prospectus in November. HBM Healthcare still values its investment in Fangzhou at cost, in line with its prudent valuation principles. A revaluation of the investment is being reviewed for the annual financial statements as at the end of March, as financing rounds have been concluded at higher valuations due to the company’s good operating performance.
- Acrivon Therapeutics, a US company active in personalised oncology, raised around USD 100 million in new capital via an IPO. At year end, the share closed around 8 percent below the issue price.
- Value adjustments totalling CHF 15 million were made for various investments.
No new investments were made in private companies during the quarter under review. CHF 20 million went to existing portfolio companies as follow-on financing.
Developments in the portfolio of public companies
Public companies burdened the quarterly result with CHF 51 million, CHF 39 million of which was due to currency developments.
- Y-mAbs Therapeutics suffered an unexpected setback. The US Food and Drug Administration (FDA) denied the company approval for omburtamab, an antibody therapy for the treatment of rare childhood cancers. The company's market value declined sharply as a result. Y-mAbs owns an approved drug, DANYELZA®, and is also developing other cancer therapies.
- The strong share price performance of Harmony Biosciences largely compensated for the decline in Y-mAbs.
- New investments were made or existing investments increased in Cytokinetics, Prometheus Biosciences, Cogent Biosciences, Natera, Travere Therapeutics, Vicore Pharma and Insmed.
Developments in the fund portfolio
The fund portfolio burdened the result in the quarter under review by CHF 20 million, CHF 11 million of which was due to currency developments.
In the quarter under review, investment commitments of CHF 6 million were called and CHF 2 million were repaid from realisations.
Asset allocation
The portfolio remains well balanced with a 43 percent share of public companies (of which 28 percent were formerly private companies), 32 percent private companies, 8 percent funds and 2 percent other assets.
Cash and cash equivalents increased by around CHF 122 million to CHF 282 million in the quarter under review due to the completion of the Biohaven and ChemoCentryx acquisitions as well as profit taking at Harmony Biosciences and sales of other public investments. Cash and cash equivalents now correspond to 15 percent of the portfolio.
Outlook
The biotech sector started the year strongly with the announcement of two billion-dollar acquisitions at prices well above those previously traded (Albireo Pharma and CinCor Pharma). HBM Healthcare is not invested in either company, but has comparably positioned, operationally successful private companies in its portfolio. Many of these portfolio companies have potential for an increase in value that is likely to materialise when the general market environment improves. In addition, there is potential for a countermovement in various public companies following the sometimes steep, mostly market-driven price losses.
Uncertainties remain regarding the impact on global economic growth of the rise in interest rates, higher energy prices and the geopolitical situation. HBM Healthcare continues to anticipate a volatile market environment. Nevertheless, HBM Healthcare Investments remains confident in its chosen investment strategy and considers the value potential of its portfolio to be intact for the coming years.
High levels of cash and cash equivalents continue to allow HBM Healthcare Investments to selectively increase existing positions and initiate new exposures.
The Quarterly Report December 2022 is available 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.
HBM Healthcare Investments suffered a negative performance for the calendar year 2022 in a declining market. The net asset value per share (NAV) declined by 21.7 percent to CHF 253.59. The share price fell by a much greater 37.8 percent to CHF 201.00.
The relevant market indices in the healthcare sector showed a negative performance across the board. The broad-based MSCI World Health Care Index recorded a minus of 3.9 percent. The biotech segment, as measured by the Nasdaq Biotechnology Index (NBI) and the SPDR S&P Biotech (XBI), declined significantly more, by 9.1 per cent and 25.0 per cent respectively.
Performance for the 9 months of the financial year 2022/2023
For the first nine months of the 2022/2023 financial year ending on 31 March, the NAV decreased by 7.8 per cent. Therefore, a net loss of around CHF 155 million is expected for this period.
Notwithstanding the market-driven decline in value, the HBM Healthcare Investments portfolio remains well positioned for the market environment, which continues to be fraught with uncertainty, thanks to the balanced mix of promising private and listed companies and a high level of cash and cash equivalents of CHF 282 million.
These figures are the preliminary results based on the current status of the closing process. The December 2022 quarterly report will be published on 20 January 2023.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
2022
HBM Healthcare Investments recorded a decrease in value of CHF 86 million in the second quarter of the 2022/2023 financial year ended 30 September. The net asset value per share (NAV) declined by 4.2 percent. For the first half of the financial year, the loss thus amounts to CHF 34 million, with a decline in NAV of 1.7 percent. The share price fell more sharply, by 16.2 percent, due to the negative market sentiment, and is currently trading at a significant discount to the net asset value. In comparison, the Nasdaq Biotech Index traded 3.1 percent lower and the MSCI World Health Care Index was down 7.7 percent.
In a declining market, the portfolio heavyweight Cathay Biotech in particular, posted a negative share price development. Four acquisitions and a strong US dollar supported the result. From an operational perspective, the portfolio’s large holdings continued to be very successful. Moreover, the healthcare sector’s fundamental factors also remained positive. Due to continuing market uncertainties, HBM Healthcare nevertheless acted cautiously and limited its investment activities to follow-on financing of private companies as well as selective profit-taking or additions in the portfolio of public companies. The hedging of one fifth of the US dollar currency risk remained in place. Thanks to a high level of cash and cash equivalents and a well-balanced portfolio, HBM Healthcare is well positioned for the current market environment.
Acquisitions support results, decline in Cathay Biotech share price weighs on results
The half-year result was significantly influenced by the holding in Cathay Biotech. The company’s market capitalisation on the Shanghai Stock Exchange fell by slightly more than one fifth in line with the market trend. Due to the substantial weight of the investment in the portfolio, this burdened the result by CHF 91 million. However, the company, which is a leader in the growth market of synthetic biology, is debt-free, operates profitably and shows continuously increasing sales and profits. The investment in Cathay Biotech is subject to a lock-up period until mid-August 2023.
The other assets in the portfolio showed positive value growth of CHF 74 million in total. This was partly favoured by the strength of the US dollar against the Swiss franc, but also thanks to four acquisitions from the portfolio of public companies: Sierra Oncology, Biohaven Pharmaceuticals, Turning Point Therapeutics, and most recently ChemoCentryx.
ChemoCentryx received a USD 3.7 billion takeover offer from Amgen in August 2022. HBM Healthcare Investments had invested a total of CHF 28 million in ChemoCentryx since November 2019, generating a profit of CHF 26 million. CHF 21 million of this is attributable to the current financial year.
The other changes in value in the private companies’ portfolio were roughly balanced in the first six months of the financial year. Mineralys Therapeutics closed a financing round at a higher valuation based on positive phase II trial results, which led to an appreciation of the investment of CHF 9 million. Value adjustments totalling CHF 11 million were necessary for various smaller investments.
High level of cash and cash equivalents
HBM Healthcare Investments made no new investments in private companies during the quarter under review. CHF 16 million was provided as follow-on financing to existing portfolio companies. Including the acquisition of Biohaven, which was completed after the balance sheet date at the beginning of October, HBM Healthcare Investments has cash and cash equivalents of CHF 227 million. The closing of the ChemoCentryx acquisition, also expected in the fourth calendar quarter, will increase cash and cash equivalents by a further CHF 38 million. HBM Healthcare Investments is thus well positioned for the current market environment.
In the portfolio of public companies, there were selective additions or profit-taking respectively on individual investments.
The portfolio remains well balanced. Half of the assets are invested in public companies, of which 30 percent come from the private companies’ portfolio. Due to the completion of the Biohaven and ChemoCentryx acquisitions in the current quarter, the share of public companies will be reduced somewhat in favour of cash and cash equivalents. Private companies account for 32 percent, funds for 8 percent, cash and cash equivalents for 8 percent and other assets for 2 percent. A good fifth of the US dollar currency risk is hedged. An increase in currency hedging is being considered.
Outlook
The general global market environment continues to be strongly influenced by macroeconomic developments (inflation, rising interest rates, economic downturn) and the tense geopolitical situation, and accordingly remains volatile and fraught with uncertainty. HBM Healthcare Investments is prepared for this not to change in the short term and is acting with corresponding caution.
Regarding private companies, the focus remains mainly on financing existing portfolio companies. With regard to the public companies’ portfolio, opportunities are exploited selectively to build up new positions or expand existing ones.
The fundamental factors favouring the healthcare sector and the Company’s investment strategy have not changed. Various acquisitions this year confirm that small and medium-sized biotech companies with already approved drugs or innovative development programmes continue to be sought-after takeover targets for large pharmaceutical companies. Also, companies with promising trial data continue to see high investor demand at capital increases. These trends are likely to continue and contribute to improve the sector’s market sentiment.
Many of the large holdings in the private companies’ portfolio are developing very successfully operationally, which will translate into higher valuations over time. The largest position Swixx BioPharma is posting strong revenue and profit growth. This trend is likely to continue. Neurelis, the second largest position, is also seeing rising sales of its VALTOCO® nasal spray and should reach break-even soon. The digital healthcare platforms (ConnectRN, Tata 1mg, Fangzhou/Jianke) are growing strongly, though not yet profitably. In addition, Mineralys Therapeutics and other portfolio companies are making good progress in their clinical development programmes.
Several public companies have significant events coming up in the next six months. The most important approval decision concerns Y-mAbs Therapeutics: The US Food and Drug Administration (FDA) will decide in the fourth quarter whether to approve OMBLASTYS® (omburtamab) for the treatment of childhood cancer. Significant trial results are expected from Harmony Biosciences (phase II data for Prader-Willi syndrome) and Arcutis Biotherapeutics (phase III data for dermatitis).
Irrespective of external circumstances, HBM Healthcare Investments is confident about the operational development of its portfolio companies and expects to realise significant added value from its existing investments.
The Half-Year Report September 2022 is available 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.
The net asset value per share (NAV) as at 30 September 2022 amounts to CHF 270.92 and is thus 1.7 percent lower than at the beginning of the current financial year 2022/23. In comparison, the MSCI World Health Care Sector Index declined by 7.7 percent and the Nasdaq Biotechnology Index by 3.1 percent.
Based on the reported NAV, HBM Healthcare Investments expects a loss of CHF 34 million for the first half of the year. The result was significantly influenced by the listed investment in Cathay Biotech. The company's market capitalisation on the Shanghai Stock Exchange fell by slightly more than one fifth. Cathay Biotech, a leader in the growth market of synthetic biology, is debt-free, profitable and shows continuously increasing sales and profits. The remaining private and listed investments in the portfolio developed positively in value overall. This is also thanks to the four acquisitions of Sierra Oncology, Biohaven, Turning Point Therapeutics and most recently ChemoCentryx from the portfolio of listed companies.
The figures presented here are the preliminary result based on the current status of the closing process. The definitive result will be published with the half-year report on 21 October 2022.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments achieved a net profit of CHF 52 million in the first quarter of the 2022/2023 financial year in an overall declining market environment. The net asset value per share rose by 2.6 percent, while the share price fell by 4 percent. The positive quarterly result is largely owed to three acquisitions from the portfolio of public companies. With an operationally successful portfolio and a high level of cash and cash equivalents, HBM Healthcare Investments is well positioned in an environment that continues to be characterised by volatility and uncertainty. The Company hedged one fifth of the US dollar Swiss franc currency risk.
HBM Healthcare Investments closed the first quarter of the 2022/2023 financial year as at 30 June 2022 with a net profit of CHF 52 million. The net asset value per share (NAV) increased by 2.6 percent, while the share price declined by 4 percent. Overall, the equity markets in the healthcare sector recorded declining valuations (MSCI World Health Care Index – 3.9 percent, Nasdaq Biotechnology Index – 6.6 percent, SPDR S&P Biotech – 14.6 percent).
Three acquisitions of portfolio companies led to quarterly profit
Three acquisitions from the portfolio of public companies dominated the reporting quarter and contributed a total of CHF 70 million to quarterly profits. All companies were acquired at significant premiums of between 40 and 120 percent over the prices traded on the stock exchange.
- In mid-April, GlaxoSmithKline announced the acquisition of Sierra Oncology for USD 1.9 billion. HBM Healthcare Investments began building a small stake in Sierra in February 2021 and increased this investment to around CHF 17 million in the first quarter of 2022 following the publication of phase III trial results for momelotinib for the treatment of myelofibrosis patients. In total, the investment resulted in a gain of CHF 21 million. CHF 16 million of this is attributable to the current financial year.
- In May, Pfizer announced the acquisition of Biohaven Pharmaceuticals for USD 11.6 billion. This followed a strategic partnership between the two companies at the end of 2021 for the marketing of Biohaven’s migraine drug Nurtec® ODT by Pfizer outside the United States. In the wake of this partnership, Biohaven acquired all the shares not already held in its subsidiary Bioshin, which is developing Nurtec® ODT for the Chinese market. HBM Healthcare invested around CHF 34 million in Biohaven since 2019 and also took a CHF 7 million stake in Bioshin in 2020. The acquisitions of Biohaven and Bioshin resulted in a profit of around CHF 63 million for HBM Healthcare Investments. Thereof, CHF 14 million was generated in the quarter just ended.
- Lastly, at the beginning of June, Bristol-Myers Squibb signed an agreement to acquire Turning Point Therapeutics for USD 4.1 billion. HBM Healthcare Investments has held a stake in Turning Point since 2018, still a private company at the time, and invested around CHF 15 million before and at the time of the IPO. The position was actively managed after flotation. Overall, HBM Healthcare Investments generated a profit of CHF 65 million from the investment, of which CHF 40 million was generated in the current financial year.
The other assets were CHF 10 million lower in value overall.
High level of cash and cash equivalents
As of the balance sheet date at the end of June 2022, the company reported cash and cash equivalents of CHF 167 million. This does not include the proceeds of approximately CHF 125 million from the acquisitions of Turning Point Therapeutics and Biohaven Pharmaceuticals, which are expected to close in the third quarter of 2022 and early 2023, respectively.
No new investments were made in private companies during the quarter under review. CHF 18 million went to existing private companies as follow-on financing. Mineralys Therapeutics accounted for just under half of this. The company closed a USD 118 million financing round at a higher company valuation. The funds will be used for further clinical development of MLS-101, a novel treatment approach for patients with hypertension.
In the public companies’ segment, new positions were selectively added to the portfolio and existing holdings were increased.
Overall, the composition of the portfolio changed little compared to the previous quarter. Due to the strong rise of the US dollar against the Swiss franc, about one fifth of the US dollar currency risk was hedged.
Outlook
The market environment is likely to remain volatile over the summer months. However, thanks to its high level of cash and cash equivalents, HBM Healthcare Investments is well positioned for this.
For the second half of 2022, a number of relevant approval decisions are pending in the portfolio of public companies. For example, Arcutis Biotherapeutics expects to receive approval for the drug roflumilast, a PDE-4 inhibitor, for the topical treatment of psoriasis, in the third quarter. At the same time, Arcutis is conducting further phase III trials with the same compound for the treatment of other skin diseases.
At Y-mAbs Therapeutics, the US Food and Drug Administration (FDA) will decide in the fourth quarter whether to approve OMBLASTYS® (omburtamab) for the treatment of childhood cancer. With DANYELZA®, Y-mAbs already has a drug approved in the US for the treatment of neuroblastoma. The drug is currently also undergoing the approval process in China. In addition, Y-mAbs is conducting numerous other clinical trials for the treatment of various cancers.
Several other public companies are also due to report important study results, which, if successful, should have a positive impact on the value of these companies.
The portfolio remains well positioned. Operationally, many of the companies are developing successfully and – as demonstrated by the recent acquisitions – are attractive for strategic buyers.
The Quarterly Report June 2022 is available 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.
Yesterday, HBM Healthcare Investments Ltd concluded the 2019 share buyback programme that started in June 2019. Under the buyback programme, no registered shares were repurchased via the second trading line on the SIX Swiss Exchange.
The Board of Directors would like to maintain the possibility of repurchasing own shares in the future through a new buyback programme, depending on the development of the business, the free liquidity and the markets. Based on the resolution of the Annual General Meeting of 10 June 2022, the Company will launch a new share buyback programme for a maximum of 696’000 registered shares (10% of the registered shares entered in the commercial register) for the purpose of cancellation by capital reduction. The buyback programme will be executed via a separate trading line on the SIX Swiss Exchange. It will start on 29 June 2022 and last until 27 June 2025 at the latest.
Further information on the new share buyback programme 2022 can be found on the website 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 Shareholders’ Meeting of HBM Healthcare Investments Ltd the shareholders approved all proposals submitted by the Board of Directors. Based on the Federal Council's COVID 19 Ordinance 3, the meeting was held without the personal participation of shareholders. The independent proxy holder represented 34.45% of the outstanding shares.
The Chairman of the Board of Directors Hans Peter Hasler and the existing board members Dr Rudolf Lanz, Mario G. Giuliani, Dr Stella X. Xu and Dr Elaine V. Jones were re-elected for a further one year term. The existing members of the Compensaiton Committee Mario G. Giuliani, Dr Stella X. Xu and Dr Elaine E. Jones were also re-elected for a further one year term. Furthermore, the shareholders approved the proposed compensation to the Board of Directors and to the Management.
Further, the Shareholders’ Meeting approved a par value repayment of CHF 9.70 per share. The cash payment will be made on 1 September 2022. The registered shares with entitlement to the distribution will be traded for the last time on 29 August 2022 (from 30 August 2022 without, ex-date).
The Shareholders also 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.
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 announces that its portfolio company Turning Point Therapeutics (NASDAQ: TPTX) will be acquired by Bristol Myers Squibb (NYSE: BMY) in an all-cash transaction that values the company at USD 4.1 billion. The acquisition price of USD 76.-- per share represents a premium of approximately 122 percent to the closing share price on 2 June 2022. The transaction is expected to close during the third quarter 2022.
HBM Healthcare Investments is a shareholder of Turning Point Therapeutics since 2018, when the company was still privately held. As of today, HBM Healthcare Investments holds around 0.871 million shares in Turning Point Therapeutis with a total value of USD 66 million based on the acquisition price. The takeover of Turning Point Therapeutics follows the successful M&A transactions of Biohaven Pharmaceuticals (acquired by Pfizer in May), Sierra Oncology (acquired by GSK in April) and Zogenix (acquired by UCB in January) from the portfolio of HBM Healthcare Investments this year.
Turning Point Therapeutics is a clinical-stage precision oncology company with a pipeline of investigational drugs designed to address key limitations of existing cancer therapies. The company’s lead drug candidate, repotrectinib, is a next-generation kinase inhibitor targeting the ROS1 and TRK oncogenic 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 invitation to the 21st Ordinary Shareholders’ Meeting on 10 June 2022 has been sent to the shareholders of HBM Healthcare Investments today.
In accordance with the Ordinance on Measures to Combat the Coronavirus, issued by the Swiss Federal Council, the shareholders are not permitted to participate in person. All shareholders are kindly asked to exercise their rights exclusively through the independent proxy by way of written or electronic instruction and power of attorney.
The detailed invitation with all motions of the Board of Directors is displayed on the Company’s website www.hbmhealthcare.com/en/investors/shareholders-meeting.
Agenda for the 21st Ordinary Shareholders’ Meeting on 10 June 2022
- Statutory financial statements and group financial statements 2021/2022; reports of the auditors
- Discharge from liability of the members of the Board of Directors and Management
- Appropriation of results
- Appropriation of disposable profit of CHF 327'937'326.
- Elections regarding the Board of Directors
- Re-elections of the Chairman and of the Members of the Board of Directors
- Re-elections of the Members of the Compensation Committee
- Compensation to the Board of Directors and to the Management
- Appointment of auditors
- Appointment of independent proxy-holder
- Reduction of share capital: partial payback of nominal value
- Cash distribution to shareholders of CHF 9.70 per share through nominal value repayment
- Approval of a new share buy-back programme and capital reduction in principle
- Miscellaneous
HBM Healthcare Investments also published today its Annual Report 2021/2022 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.
HBM Healthcare Investments today announces that its portfolio company Biohaven Pharmaceuticals (NYSE: BHVN) will be acquired by Pfizer (NYSE: PFE) for USD 11.6 billion in cash. The acquisition price of USD 148.50 per Biohaven share represents a premium of approximately 78 percent to the closing share price on 9 May 2022. Biohaven shareholders will also receive shares in "New Biohaven", a new publicly traded company that will retain Biohaven's non-CGRP pipeline compounds in development.
HBM Healthcare Investments holds around 0.45 million shares in Biohaven with a total value of USD 67 million based on the acquisition price. Following the acquisition of Sierra Oncology by GlaxoSmithKline in April and of Zogenix by UCB in January, this is the third acquisition from HBM Healthcare Investments' portfolio of listed companies in the current calendar year 2022.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments reports a loss of CHF 78 million for the 2021/2022 financial year, for the first time in ten years and after a cumulative increase in value of 550 percent. The net asset value per share (NAV) fell by 3.6 percent and the share price by 13.2 percent due to globally declining market valuations of public companies, especially in the first quarter of 2022, triggered by rising inflation, interest rate hikes and increasing geopolitical uncertainty. The increase in value of the private companies’ portfolio totalling CHF 129 million was unable to entirely compensate for this.
However, the healthcare market continues to offer an attractive investment universe
and the prospects for HBM Healthcare’s carefully constructed portfolio remain intact. The Company’s solid financial position allows to continue its proven investment strategy and distribution policy.
The Board of Directors proposes to the Shareholders’ Meeting a slight increase in the cash distribution of 20 cents to CHF 9.70 per share in the form of a par value repayment free of withholding tax.
Annual loss of CHF 78 million due to declining market valuations
HBM Healthcare Investments reports an annual loss of CHF 78 million for the 2021/2022 financial year. This is the first negative result in ten years, following the previous year’s record profit.
In an increasingly challenging market environment, HBM Healthcare Investments initially performed very well. In January 2022, the Company reported a strong profit of CHF 275 million for the first nine months. Increases in the value of private companies and the rise in the share price of its largest investment – Cathay Biotech in China – offset the market-driven decline in the share prices of the other public investments. However, valuations of growth companies on the stock market came under increasing pressure against the backdrop of rising inflation and a first interest rate hike in the United States. The geopolitical events in Ukraine and the renewed flare-up of the Covid-19 pandemic in China further accentuated the price decline in public holdings in the final quarter of the financial year while the share price of Cathay Biotech also gave back some of its previous gains, which ultimately pushed our result into negative territory.
The individual components of the portfolio contributed as follows to the annual loss:
The value of the portfolio of private companies increased by a total of CHF 129 million. Financing rounds with external investors enabled an increase in the valuations of the investments in Swixx Biopharma by CHF 75 million and ConnectRN by CHF 38 million. Both companies are operationally successful and experience strong sales growth. Furthermore, the acquisition of Bioshin by Biohaven resulted in a profit contribution of CHF 12 million. The value of the other investments combined increased by a total of CHF 4 million, net of higher valuations due to financing rounds as well as some value adjustments.
The fund portfolio decreased by CHF 35 million, mainly due to lower market prices of public companies held by these funds. Of this, CHF 12 million was attributable to HBM Genomics, CHF 10 million to WuXi Healthcare Ventures, and CHF 13 million to the other funds. Repayments totalling CHF 36 million were offset by capital calls of CHF 31 million. In total, CHF 5 million in liquidity flowed back from the funds. No new investment commitments were made to funds in the reporting year.
Public companies originating from the portfolio of private companies recorded market-related losses of CHF 82 million. Positive performers were Cathay Biotech (CHF 128 million, including dividend income of CHF 3 million and net of an increase in the provision for deferred tax on capital gain of CHF 14 million) and Harmony Biosciences (CHF 58 million). Both companies are profitable and report growing sales. The result was negatively impacted primarily by oncology companies with clinical development candidates, some of which had appreciated strongly in earlier years: BioAtla (CHF 62 million), ALX Oncology (CHF 32 million), Y-mAbs Therapeutics (CHF 28 million), Turning Point Therapeutics (CHF 27 million), Ambrx (CHF 20 million), Longboard Pharmaceuticals (CHF 20 million), Instil Bio (CHF 18 million), Connect Biopharma (CHF 13 million), IO Biotech (CHF 10 million) and other companies (CHF 38 million net). HBM Healthcare Investments had already realised substantial profits from most of these investments in the financial year just ended or in previous financial years. Clinical development is proceeding according to plan at most of these companies.
The portfolio of other public companies impaired the result by CHF 65 million. The investment in Biohaven developed positively, increasing by CHF 25 million. The result was burdened by the share price developments of Zymeworks (CHF 24 million), Esperion Therapeutics (CHF 12 million), Rocket Pharmaceuticals (CHF 11 million), ChemoCentryx (CHF 10 million) and various smaller investments (CHF 33 million net).
The hedging positions for currency and market risks resulted in a profit contribution of CHF 29 million. Other financial assets and financial instruments reduced the result by CHF 13 million, mainly due to currency effects.
Management fees, which depend on average net assets and market capitalisation, amounted to CHF 35 million. As the NAV did not exceed the high water mark at the end of the financial year, no performance-related compensation was due to the investment advisor or the Board of Directors. Other administrative costs and financial expenses were stable at less than CHF 6 million.
Attractive portfolio with private and public companies
Taking into account the reported loss for the year and the par value repayment to shareholders last September, net assets decreased by CHF 0.17 billion to just under CHF 2 billion in the reporting year. As of 31 March 2022, total invested assets of CHF 2.2 billion were grouped as follows: private companies 28 percent, public companies 52 percent (public companies originating from the private companies’ portfolio 37 percent), funds 8 percent, other assets 1 percent and cash and cash equivalents 11 percent. At less than 7 percent, the level of financial liabilities remains low.
On the balance sheet date, there were no hedges for currency or market risks.
CHF 162 million invested in private companies
HBM Healthcare Investments invested CHF 93 million in eleven new private companies during the year under review. Of this amount, CHF 67 million has been paid in and CHF 26 million has been recognised as investment commitments. A further CHF 69 million was transferred to existing private companies as follow-on financings.
New investments made during the year are mentioned in the respective quarterly reports. No new investments were made in the reporting year’s final quarter ended 31 March 2022. The three largest new investments in the 2021/2022 financial year are:
- The US company Upstream Bio received an investment commitment of USD 20 million (USD 11 million paid in). Upstream is developing an antibody to treat severe asthma.
- CHF 17 million went to the Swiss company Numab Therapeutics. Numab develops novel cancer immunotherapies based on its multispecific antibody discovery technology platform and has several partnerships with international pharmaceutical companies.
- USD 10 million was invested in Odyssey Therapeutics. The US-based company develops novel antibodies (V-bodies) for the treatment of cancer and for autoimmune therapies.
In addition to new investments in private companies, selective buying opportunities were also taken in new or existing public companies. For example, the sharp decline in the share price of Y-mAbs Therapeutics at the beginning of 2022 was used to double the position back to the original ownership stake. The investment in Sierra Oncology was significantly increased following positive phase III trial results for Momelotinib for the treatment of myelofibrosis patients. This decision was rewarded shortly after the balance sheet date, when GlaxoSmithKline announced the acquisition of Sierra Oncology for a total of USD 1.9 billion in mid-April.
Increase of cash distribution to CHF 9.70 per share
HBM Healthcare’s large increase in value in recent years, the positive outlook for its portfolio, and its solid financial position allow the Company to continue its distribution policy unchanged. Accordingly, over the long term, a portion of the increase in value achieved is to be returned to shareholders with a target yield ranging from 3 to 5 percent on the closing share price.
The Board of Directors proposes to the Shareholders’ Meeting a slight increase in the cash distribution of 20 cents to CHF 9.70 per share in the form of a par value repayment free of withholding tax. Based on the share price of 31 March 2022, this corresponds to a yield of 3.5 percent.
Furthermore, the Board of Directors intends to propose a new share buy-back programme to the Shareholders’ Meeting.
Outlook
With inflation, rising interest rates and geopolitical uncertainty, the macroeconomic market environment has become more challenging in recent months. Nevertheless, HBM Healthcare Investments continues to rate the growth prospects for the healthcare sector and the factors central to its investment strategy as good.
The carefully compiled portfolio remains attractive in its composition and was supplemented with some interesting new investments in the reporting year. Many private companies are operationally successful and hold considerable added value potential. After the significant share price decline of the past twelve months, the segment of small and mid cap public companies is valued reasonably and will benefit from a market recovery. In addition, the progress of clinical development at these companies in the form of positive study results or market approvals should once again attract investor attention. Finally, Cathay Biotech, our largest holding, maintains its excellent position as one of the leading companies in the promising growth area of synthetic biology.
The current market environment offers increasingly interesting investment opportunities in the area of public companies, which we intend to exploit selectively. In addition, it can be assumed that strategic buyers will also follow this market development closely and – as demonstrated by GSK’s recent acquisition of Sierra Oncology – this will again lead to an increase in acquisitions and strategic partnerships.
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 18 May 2022 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.
Following the previous year's record result, HBM Healthcare Investments experienced a slight decline in value in the 2021/22 financial year ended on 31 March 2022. The net asset value (NAV) per share fell by 3.6 percent to CHF 285.53. The share price declined disproportionately by 13.2 percent to CHF 276.00.
The healthcare sector showed a mixed picture in terms of performance in the reporting year. While the MSCI World Health Care Index, which mainly tracks the large-cap companies from the pharmaceutical and medical technology sectors, rose by 13%, the market capitalisations of the biotech companies (Nasdaq Biotechnology Index -13% and SPDR S&P Biotech ETF -35%) fell, in some cases significantly.
Based on the NAV as at 31 March 2022, HBM Healthcare Investments expects an annual loss of around CHF 80 million (previous year: annual profit of CHF 756 million). For an investment company, the net result reflects the changes in value of the investments held.
With a well-balanced mix of private and listed companies and cash and cash equivalents of more than CHF 220 million, the portfolio remains attractively positioned for long-term value growth.
The present result is preliminary and unaudited based on the current status of the closing process. The final annual result will be published on Friday, 6 May 2022.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments generated a net profit of CHF 4 million in the reporting quarter ended 31 December 2021. For the first nine months of the 2021/2022 financial year, the net profit amounts to CHF 275 million. Although the biotech stock market in general declined, several portfolio companies announced operational successes, which resulted in higher valuations. With cash and cash equivalents of CHF 226 million, HBM Healthcare is well positioned for a market downturn and may benefit from buying opportunities at low valuations. Eight new investments in private companies complement the portfolio.
HBM Healthcare Investments closed the third quarter of the 2021/2022 financial year with a small net profit of CHF 4 million amid a bearish market environment, at least in the biotech sector. The net asset value per share (NAV) increased by 0.2 percent during the same period, while the share price declined by 0.3 percent.
This results in a profit of CHF 275 million for the first nine months of the financial year and an increase in the NAV of 12.8 percent.
Operational success as a basis for high valuations
The two private companies Swixx BioPharma and ConnectRN concluded financing rounds with new investors. Against the backdrop of the companies’ very successful operational development, these led to an increase in the valuation of the two investments totalling CHF 72 million.
Swixx BioPharma announced the signing of an agreement for the exclusive distribution of Sanofi's prescription drugs in Eastern Europe. The company expects this to double its 2022 sales to over EUR 600 million and plans to expand its team to around 900 employees.
ConnectRN, the digital placement platform for nursing staff in the United States, increased its 2021 revenue organically by more than 240 percent and expects further growth in the current year.
Furthermore, BioShin, a Chinese subsidiary of listed Biohaven Pharmaceuticals, will be fully acquired by Biohaven as part of Biohaven’s announced strategic partnership with Pfizer. Upon completion of the transaction, HBM Healthcare Investments will receive Biohaven shares equivalent to approximately USD 23 million in exchange for its USD 8 million investment in BioShin.
Valo Health announced that the merger agreement signed in June with Khosla Ventures Acquisition Co. has been terminated by mutual consent. Accordingly, the value of the investment was reduced back to the original cost value.
Cathay Biotech defies declining stock market
Among the public companies originating from the private companies’ portfolio, the pleasing share price performance of the Chinese company Cathay Biotech stood out in particular. The market capitalisation of this leader in synthetic biology rose by almost a fifth to over CHF 11 billion in the quarter under review, thereby compensating for the considerable market-related decline in the share prices of the other public holdings originating from the portfolio of private companies.
A detailed analyst report highlighted the potential of Cathay Biotech’s technology to use straw instead of corn starch as the renewable resource to manufacture its products in the future. Thereby, Cathay wants to avoid bottlenecks in the procurement of raw materials which are expected for the growing biomass industry. According to OECD estimates, at least 20 percent of the world’s chemical products will be replaced by biomass products by 2030. This corresponds to a market volume of USD 800 billion, and synthetic biology is said to play a central role in this replacement process.
With a share of 27 percent, Cathay Biotech is by far the largest holding in HBM Healthcare’s portfolio. As Cathay’s shares will remain subject to a lock-up period for the next 20 months, they are valued at a discount of 9.75 percent to the current market price, in the amount of CHF 76 million. The percentage of the lock-up discount will be reduced on a straight-line basis over the remaining term of the lock-up period.
Among the other public companies, Argenx and ChemoCentryx each benefitted from an FDA market approval. Argenx was granted approval for VYVGARTTM for the treatment of the chronic neuromuscular autoimmune disease myasthenia gravis, characterised by weakness and rapid fatigability of the skeletal muscles, and ChemoCentryx for TAVNEOSTM for the treatment of ANCA-associated vasculitis, an inflammatory disease of the blood vessels. Furthermore, additional value was added by the acquisition of Dicerna by Novo Nordisk.
Eight new investments in private companies
During the quarter under review, new investments totalling CHF 52 million were made in eight private companies. A further CHF 18 million was invested in current portfolio companies.
Among the new investments, the US company Upstream Bio received an investment commitment of USD 20 million, of which a first tranche of USD 11 million was paid in. Upstream Bio is developing an antibody therapy for the treatment of severe asthma.
In addition, US company Acrivon Therapeutics received USD 8 million for the development of personalised oncology treatments; Mahzi Therapeutics, United States, USD 8 million, of which USD 4 million paid in, for the development of a gene therapy for the treatment of rare diseases; Ignis Therapeutics, China, USD 7 million, of which USD 4.2 million paid in, for the development of licensed therapies for the treatment of diseases of the central nervous system in China. Japanese company Aculys Pharma received USD 5 million for the development of Pitolisant for the treatment of narcolepsy for the Japanese market, and the Italian online pharmacy 1000Farmacie, Italy, EUR 4 million. Finally, the two US companies Freenome Holdings (blood test for the early detection of cancer) and Antiva Biosciences (topical therapies for the treatment of precancerous lesions caused by HPV) each received USD 3 million, of which in the case of Antiva USD 1.5 million paid in.
Outlook
The equity markets in the biotech sector continued to trend sharply downwards on the first trading days of the new year. The acquisition of the portfolio company Zogenix by UCB, announced this week, provides some confidence in addition to a cash inflow. With substantial cash and cash equivalents totalling CHF 226 million, HBM Healthcare Investments is well positioned for this market phase. As most portfolio companies are performing well operationally, as expected, there is no need to reduce exposure at unattractive prices.
Due to the large percentage share of Cathay Biotech in the portfolio, its share price performance will continue to have significant impact on the results of HBM Healthcare Investments. Cathay is profitable, operationally very successful and unswerving in implementing its long-term growth plans.
In the private companies’ portfolio, various companies are about to close financing rounds, which should have a positive impact on the book value of the corresponding investments.
The portfolio thus remains attractive and well balanced in its composition with private and public companies.
The Quarterly Report December 2021 is available 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.
HBM Healthcare Investments closes the 2021 calendar year with another strong performance. The net asset value per share (NAV) rose by 19 percent to CHF 336.27 as at 31 December 2021, while the share price increased by 15.2 percent to close at CHF 339.00 at a small premium to NAV.
The healthcare sector showed a mixed picture in terms of performance. While the large-cap pharmaceutical companies (MSCI World Healthcare Index +23.9 percent, measured in Swiss francs) rose strongly in value, biotech companies (Nasdaq Biotechnology Index +3.0% and SPDR S&P Biotech ETF -18.1%) took a breather after their good run in recent years.
HBM Healthcare Investments, which is mainly invested in the segment of small and medium sized biotech companies, was able to more than compensate for the significant share price declines in this segment thanks to the strong share price performance of its largest listed investment, the Chinese Cathay Biotech (share price +118%), value contributions from the portfolio of private companies (financing rounds and IPOs), and partial profit realisations in the portfolio of listed companies.
Expected net profit of around CHF 275 million for the first 9 months of the financial year 2021/2022
Also for the first 9 months of the financial year 2021/2022 ending on 31 March, there was an increase in value of 12.8 percent in the NAV and of 5.7 percent in the share price (MSCI World Health Care Index +15.4%, NBI -2.7%, XBI -20.2%). Based on the reported NAV as at 31 December 2021, HBM Healthcare Investments expects a net profit of approximately CHF 275 million for this period (previous year net profit of CHF 644.6 million). In the case of an investment company, the net result reflects the changes in the value of the investments held.
The present figures are preliminary based on the current status of the financial closing process. The final result will be published with the December 2021 quarterly report on 21 January 2022.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
2021
IO Biotech (Nasdaq: IOBT), a so far privately held company in the HBM Healthcare Investments portfolio, issued 7.15 million new shares at a price of USD 14.00 per share in last Friday's IPO on the US Nasdaq, raising USD 100 million in new capital. On the first day of trading, the shares closed at USD 15.65 (+11.8%).
HBM Healthcare Investments has invested USD 23.2 million in IO Biotech since January 2021 and holds 2.37 million shares with a total value of USD 37.0 million after the IPO.
IO Biotech, based in Copenhagen, Denmark, is developing novel immune-modulating cancer therapies based on its T-win® technology platform. The T-win® platform is a novel approach to cancer immunotherapy designed to activate naturally occurring T cells to target immunosuppressive mechanisms. The company's lead candidate, IO102-IO103, received Breakthrough Therapy Designation from the FDA for the treatment of unresectable/metastatic melanoma and is about to start a phase 3 trial in combination with pembrolizumab.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments generated for the first half of the financial year from 1 April to 30 September 2021, a profit of CHF 271 million while NAV increased by 12.6 percent to CHF 335.64. The share price rose 6.0 percent to CHF 340.00.
The main drivers were positive changes in the value of private companies and of public companies originating from the portfolio of private companies, respectively. The investment in Cathay Biotech, which is subject to a lock-up period, increased to approximately 23 percent of total assets. Two new investments in private companies complement the portfolio. After profit-taking in public companies, cash and cash equivalents amount to around 10 percent of assets, thus offering scope for new investments and buying opportunities.
Cathay Biotech achieved a particularly pleasing performance. The share price has doubled since the end of March, bringing the shareholding to around 23 percent of total assets. The company published convincing half-year figures and in mid-year announced the start of production of 1,5-diaminopentane and polyamides at its new plant in Wusu based on the biotechnological manufacturing process developed by Cathay using renewable resources. In addition, the company was included in the index of the fifty most important companies on the STAR Market of the Shanghai Stock Exchange. HBM Healthcare’s investment in Cathay will remain subject to a lock-up period for a further two years, which is why the shareholding is valued at a discount of 11.3 percent to the market price. This lock-up discount will be reduced on a straight-line basis over the remaining term of the lock-up period.
Fund investments increased in value by CHF 17 million and also resulted in a net cash inflow of CHF 12 million: Repayments reached CHF 27 million while capital calls amounted to CHF 15 million.
Investments in various public companies resulted in a small profit of CHF 4 million amid a mixed market environment where the large biotech companies clearly outperformed the small- and mid-cap companies (NASDAQ Biotechnology Index + 7.1 percent vs. SPDR S&P Biotech ETF – 8.3 percent).
Hedging transactions contributed a total profit of over CHF 27 million (CHF 21 million from foreign currency transactions and CHF 6 million from general market hedging). Other assets reduced the result by CHF 5 million. The forward contracts that had expired during the last reporting quarter were only partially renewed, further reducing the level of currency hedging of the US dollar against the Swiss franc to just under 25 percent of the USD exposure.
Two new investments in private companies
The acquisitions of Alydia Health by Organon and of a majority stake in 1mg by Tata Digital, for which the agreements had already been signed in March 2021, were completed in the past quarter. This resulted in a cash inflow of CHF 20 million. These proceeds were invested in two new private companies:
- An investment commitment of USD 10 million (first tranche of USD 5 million paid in) was made to the US company Odyssey Therapeutics. Odyssey is developing a platform of novel antibodies (V-bodies) for the treatment of cancer and autoimmune diseases.
- A further USD 10 million (first tranche of USD 2 million paid in) was awarded to the Chinese company C Ray Therapeutics. The company, which was founded last year, is aiming for a leading position in the Chinese healthcare market in the field of nuclear medicine.
In addition, around CHF 11 million were invested in existing portfolio companies as follow-on financing.
Balanced portfolio
The past quarter was used for further profit-taking in public companies. As a result, cash and cash equivalents increased by CHF 51 million to CHF 245 million or around 10 percent of total assets at the end of September. This takes into account the par value repayment of CHF 87 million at the beginning of September. The closing of the acquisition of Trillium by Pfizer, expected in the coming weeks, should increase cash and cash equivalents by a further CHF 30 million.
HBM Healthcare Investments thus has sufficient scope to make further new investments in private companies and to seize opportunities to buy public companies in the event of a correction in valuations on the financial markets.
Of total assets, 61 percent are invested in public companies (of which Cathay Biotech accounts for more than one third), 19 percent in private companies, 9 percent in funds and 1 percent in other assets.
Positive outlook
Various private portfolio companies are operationally very successful and hold considerable value potential. For example, Swixx BioPharma, the leading distribution partner for biotech and pharmaceutical companies in Central and Eastern Europe, expects continued strong revenue and profit growth in the coming years. ConnectRN, a digital placement platform for healthcare personnel in the United States, is benefiting from the prevailing shortage of skilled workers, expanding rapidly and posting high growth rates. Fangzhou, operator of the Chinese healthcare service platform Jianke.com, is also a winner of the digital transformation.
In the portfolio of public companies, important approval decisions by the US Food and Drug Administration (FDA) are due in the coming months for Argenx and Hutchmed China. In addition, a number of other companies are awaiting relevant trial results for various oncology programs, including the three formerly privately held companies BioAtla, ALX Oncology and SpringWorks. For companies such as Cathay Biotech, Harmony Biosciences, Biohaven and Pacira, however, investors are likely to focus primarily on further sales and profit developments.
The portfolio thus remains well balanced in all relevant dimensions (private and public companies, geographic regions, stages of development, areas of activity and therapy, sales vs. clinical development) and continues to be positioned for further value growth.
The Half-year Report September 2020 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 assets continued to grow in the first half of the 2021/2022 financial year, thanks to the excellent performance of the listed investment in Cathay Biotech in China and contributions from the private companies portfolio. The net asset value per share (NAV) increased by 12.6 percent to CHF 335.64 as at 30 September 2021, while the share price rose by 6 percent.
Based on these key figures, HBM Healthcare Investments expects a net profit of around CHF 270 million for the first half of the financial year. In the same period of the previous year, a net profit of CHF 441 million was reported.
These figures represent the preliminary result based on the current status of the closing process. The definitive result will be published with the half-year report on 22 October 2021.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments closed the first quarter of the 2021/2022 financial year with a profit of CHF 136 million. The increase in the net asset value per share (NAV) amounted to 6.3 percent. The share price rose by 6.9 percent. The investment approach with holdings in private and public companies around the globe proved itself once again.
The portfolio of private companies (including public companies originating from the private portfolio) resulted in an increase in value of CHF 90 million. A number of transactions contributed to this. Three companies successfully went public: Werewolf Therapeutics, Ambrx Biopharma and Monte Rosa Therapeutics. In addition, Valo Health signed a merger agreement with listed company Khosla Ventures Acquisition Co. Swixx BioPharma, NiKang Therapeutics and ConnectRN completed financing rounds with external investors at higher valuations, and Tata Digital acquired a majority stake in leading Indian healthcare platform 1mg. The public companies originating from the private portfolio also increased in value in aggregate. The share price of Cathay Biotech in China rose by around 30 percent, offsetting the decline in the majority of the other holdings.
The value of fund investments decreased by CHF 9 million in the quarter under review. This was mainly due to the decline in the share price of Seer Inc., the largest investment in the HBM Genomics Fund.
The portfolio of other public companies contributed CHF 45 million to profit. This came mainly from the investments in the fast-growing Indian biopharmaceutical company Laurus Labs, the US company Biohaven Pharmaceuticals and the new investment in Hutchmed China. In addition to its listing on Nasdaq, Hutchmed China completed an IPO on the Hong Kong Stock Exchange during the quarter under review, with HBM Healthcare Investments participating as a cornerstone investor with USD 20 million.
The market and currency hedges resulted in profit contributions of CHF 7 million and CHF 24 million, respectively. The market hedge was fully unwound in the quarter under review and the USD currency hedge was reduced to around 35 percent of the exposure. Other assets reduced the investment result by CHF 10 million, mainly due to currency fluctuations.
Investments in private companies
During the quarter under review, HBM Healthcare invested CHF 25 million as follow-on financing in existing portfolio companies and made a new investment of CHF 17 million in the privately held Swiss company Numab Therapeutics. Numab is developing a new generation of cancer immunotherapies. The most advanced compound (NM21-1480) is currently being tested in a phase I/II clinical trial in patients with solid tumours. Numab is developing this therapy together with its Chinese partner CStone Pharmaceuticals.
Outlook
The portfolio continues to be well diversified and finely balanced in terms of composition (private and public companies, geographical regions, stages of development and areas of activity or therapy). This reduces dependence on the development of individual sectors or regions within the healthcare market, which has a stabilising effect and should continue to have a positive impact on performance.
Essentially, nothing has changed compared to the outlook outlined in the annual report. The fundamental factors continue to speak for a successful development of the sector as a whole and for the portfolio companies individually. In this respect, the Company expects further value-enhancing events from its portfolio due to IPOs, financing rounds, company takeovers or clinical trial results.
The Quarterly Report June 2020 is available 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.
Monte Rosa Therapeutics (Nasdaq: GLUE), a private company in the portfolio of HBM Healthcare Investments, reached an important milestone in the company's development with yesterday's successful IPO on Nasdaq. By issuing 11.7 million shares at a price of USD 19.00 each, the company raised USD 222 million in new capital. On yesterday's first trading day, the share price rose to USD 21.18 (+11.5%).
HBM Healthcare Investments has invested USD 14 million in Monte Rosa in two financing rounds since September 2020 (investment previously valued at USD 18.8 million) and increased its stake by a further USD 7.6 million in the IPO. Following the IPO, HBM Healthcare Investments holds 2.2 million shares with a total value of USD 46.6 million.
Monte Rosa Therapeutics is developing a portfolio of novel small molecule precision medicines that employ the body’s natural mechanisms to selectively degrade therapeutically relevant proteins. The company has developed a proprietary protein degradation platform, called QuEEN™, that enables it to rapidly identify protein targets and molecular glue degrader (MGD) product candidates that are designed to eliminate therapeutically relevant proteins in a highly selective manner. The company’s drug discovery platform combines diverse and proprietary chemical libraries of small molecule protein degraders with in-house proteomics, structural biology, machine learning-based target selection and computational chemistry capabilities to predict and obtain protein degradation profiles. Monte Rosa is headquartered in Boston, USA, with research operations in both Boston and Basel, Switzerland.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for securities. This news release does not constitute a prospectus within the meaning of Art. 35ff FinSA, or securities prospectus in the sense of the German securities prospectus law. This news release and the information contained therein is not intended for distribution to the United States of America (USA) or within the USA and may not be distributed or forwarded to US persons (including legal persons) or to publications with a general distribution in the USA. This news release is not an offer or solicitation to buy securities in the United States. HBM Healthcare Investments AG's securities were not issued in accordance with the U.S. U.S. securities laws, and may not be sold, offered for sale, or delivered in the U.S. or to U.S. individuals without prior registration or without a registration exemption. Some information quoted was obtained from external sources HBM considers to be reliable. HBM cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions.
Ambrx Biopharma (NYSE: AMAM), a private company in the portfolio of HBM Healthcare Investments, completed its initial public offering on the New York Stock Exchange last Friday. The company raised USD 126 million in new capital through the issuance of 7 million American Depository Shares (ADS) at a price of USD 18.00 per ADS. On the first trading day, the shares closed slightly lower at USD 17.05 (-5.3%).
HBM Healthcare Investments invested USD 20 million in Ambrx in November 2020 and increased its stake by a further USD 14.4 million in the IPO. After the IPO, HBM Healthcare Investments holds 2.54 million ADS with a total value of USD 43.25 million.
Ambrx Biopharma is developing a novel class of engineered precision biologics using a proprietary genetic code technology platform that allows it to incorporate, in a site-specific manner, synthetic amino acids into proteins within living cells, which the company believes could offer safety and efficacy benefits over conventional conjugation approaches which use natural amino acids. The company's lead candidate, ARX788, is an antibody-drug conjugate currently being studied in breast, gastric and other solid tumors. The most advanced trial of ARX788 is being conducted by Ambrx Biopharma's partner, NovoCodex Biopharmaceuticals, in China in patients with HER2-positive metastatic breast cancer. In addition, the company has clinical collaborations with Bristol Myers Squibb, Astellas, BeiGene, Sino Biopharma, Elanco and NovoCodex, for drug candidates generated using Ambrx technology.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for securities. This news release does not constitute a prospectus within the meaning of Art. 35ff FinSA, or securities prospectus in the sense of the German securities prospectus law. This news release and the information contained therein is not intended for distribution to the United States of America (USA) or within the USA and may not be distributed or forwarded to US persons (including legal persons) or to publications with a general distribution in the USA. This news release is not an offer or solicitation to buy securities in the United States. HBM Healthcare Investments AG's securities were not issued in accordance with the U.S. U.S. securities laws, and may not be sold, offered for sale, or delivered in the U.S. or to U.S. individuals without prior registration or without a registration exemption. Some information quoted was obtained from external sources HBM considers to be reliable. HBM cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions.
At today’s ordinary Shareholders’ Meeting of HBM Healthcare Investments Ltd the shareholders approved all proposals submitted by the Board of Directors. Based on the Federal Council's COVID 19 Ordinance 3, the meeting was held without the personal participation of shareholders. The independent proxy holder represented 38.50% of the outstanding shares.
The Chairman of the Board of Directors Hans Peter Hasler and the existing board members Mario G. Giuliani, Dr. Rudolf Lanz and Dr. Stella X. Xu were re-elected for a further one year term. The shareholders also confirmed the election of Dr. Elaine V. Jones as new member of the Board of Directors to the close of the 2022 Ordinary Shareholders' Meeting. In addition to the existing member Mario G. Giuliani, Dr. E. Jones and Dr. S. Xu were elected to the Compensation Committee. The shareholders also approved the proposed compensation to the Board of Directors and to the Management.
Further, the Shareholders’ Meeting voted for a partial payback of nominal value of CHF 12.50 per share. The cash payment will be made on 9 September 2021. Registered shares entitled to receive the cash distribution will be traded for the last time on 6 September 2021 (as of 7 September 2021 trading will occur without the cash distribution entitlement, ex-date).
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for securities. This news release does not constitute a prospectus within the meaning of Art. 35ff FinSA, or securities prospectus in the sense of the German securities prospectus law. This news release and the information contained therein is not intended for distribution to the United States of America (USA) or within the USA and may not be distributed or forwarded to US persons (including legal persons) or to publications with a general distribution in the USA. This news release is not an offer or solicitation to buy securities in the United States. HBM Healthcare Investments AG's securities were not issued in accordance with the U.S. U.S. securities laws, and may not be sold, offered for sale, or delivered in the U.S. or to U.S. individuals without prior registration or without a registration exemption. Some information quoted was obtained from external sources HBM considers to be reliable. HBM cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions.
HBM Healthcare Investments AG successfully completed the placement of the bond early, with Helvetische Bank AG and Raiffeisen Schweiz Cooperative acting as Joint-Lead Managers. Due to the strong demand, the coupon was fixed at the lower end of the indicated coupon range at 1⅛% and HBM Healthcare Investments AG increased the issue amount and exercised the option of reopening to the maximum of CHF 100 million. The subscription period ended prematurely today at 4.00pm.
„We are delighted with the extremely positive response to our bond on the capital market“, says Erwin Troxler, CFO of HBM Healthcare Investments AG.
The provisional admission to trading on SIX Swiss Exchange is expected to take place on 9 July 2021 and the settlement on 12 July 2021.
Contact
For further information, please contact Erwin Troxler, tel.: +41 41 710 75 77,
erwin.troxler@hbmhealthcare.com.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for bonds or any other securities of HBM Healthcare Investments Ltd. This news release does not constitute a prospectus within the meaning of the Swiss Financial Services Act («FinSA») and implementing provisions under the Swiss Financial Services Ordinance («FinSO») nor a listing prospectus in the sense of the Listing Rules of SIX Swiss Exchange Ltd or a prospectus pursuant to any other legislation or regulation. A decision to purchase or subscribe for bonds must be made solely on the basis of the relevant prospectus. The preliminary prospectus and final prospectus both issued in German relating to the bonds (which are expected to be available on 15 June 2021 and 18 June 2021, respectively) may be ordered free of charge by e-mail from Helvetische Bank AG at prospectus@helvetischebank.ch or by calling +41 (0)44 204 56 19.
This news release does not constitute a prospectus or a supplementary prospectus pursuant to the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the «EU Prospectus Regulation») or the EU Prospectus Regulation as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the «UK Prospectus Regulation»). This news release is only addressed to, and is only directed at, qualified investors in any member state of the European Economic Area within the meaning of the EU Prospectus Regulation. The bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area.
This news release is directed only at persons who are qualified investors within the meaning of the UK Prospectus Regulation and who (i) have professional experience in matters relating to investments falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) or (ii) are persons falling within Article 49 (2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) or to whom it may otherwise lawfully be communicated (all such persons together being referred to as relevant persons). The bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom. This news release is only directed at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.
NEITHER THIS DOCUMENT NOR ANY PART OR COPY OF IT NOR THE INFORMATION CONTAINED IN IT AND ANY RELATED MATERIALS MAY BE TAKEN OR TRANSMITTED INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR TO ANY RETAIL INVESTOR IN THE EEA OR THE UNITED KINGDOM OR DISTRIBUTED OR REDISTRIBUTED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, TO ANY RETAIL INVESTOR IN THE EEA OR THE UNITED KINGDOM OR TO ANY RESIDENT THEREOF.This news release is not for distribution in, nor does it constitute an offer of securities in the United States. Neither this news release nor any copy of it may be taken or transmitted into the United States, its territories or possessions, or distributed, directly or indirectly, in the United States, its territories or possessions or to any US person as defined in Regulation S («Regulation S») under the US Securities Act 1933, as amended (the «Securities Act»). Any failure to comply with this restriction may constitute a violation of United States securities law. Accordingly, each person viewing this document will be deemed to have represented that it is not a US person within the meaning of Regulation S of the Securities Act. Securities may not be offered or sold in the United States absent registration or an exemption from registration. HBM Healthcare Investments Ltd has not registered and does not intend to register any securities that may be described herein in the United States or to conduct a public offering of any securities in the United States.
This document is not an offer of securities for sale or purchase in the United States. The securities to which this document relates have not been and will not be registered under the Securities Act, and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. There will not be a public offering of securities in the United States.
This document has been prepared by HBM Healthcare Investments Ltd and may not be copied, amended, offered, sold or otherwise given to third parties by the recipient without the consent of HBM Healthcare Investments Ltd. The German version of the document is applicable and binding in any event. Versions of the document in other languages are for information purposes only. Due care has been taken to ensure that the facts set out herein are accurate and that all opinions expressed herein are fair and reasonable. Some information quoted was obtained from external sources HBM Healthcare Investments Ltd considers to be reliable.HBM Healthcare Investments Ltd cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions. The facts and information set out in this document are as current as possible but may change in the future. Both HBM Healthcare Investments Ltd as such and its directors, officers, employees and advisors or any other person disclaim any express or implied liability or warranty as to the accuracy or completeness of the information contained in this document.
This document may contain projections or other forward-looking statements relating to HBM Healthcare Investments Ltd that involve inherent risks and uncertainties, both general and specific, and there is a risk that the projections, forecasts, plans and other explicit or implicit contents of forward-looking statements may prove to be inaccurate. All forward-looking statements are based on information available to HBM Healthcare Investments Ltd on the date of their publication; HBM Healthcare Investments Ltd is only obliged to update these statements if required to do so by applicable laws.
HBM Healthcare Investments Ltd announces the issue of a bond with a 6-year term and a nominal amount of CHF 60 million with the possibility to increase the issue amount up to a maximum of CHF 75 million. The proceeds will be used to refinance the bond maturing 10 July 2021 in the amount of CHF 50 million and for general funding purposes.
Helvetische Bank AG and Raiffeisen Switzerland Cooperative as Joint Lead Managers and Reichmuth & Co as Co-Lead Manager have firmly underwritten the bond. The terms are as follows:
| Issuer | HBM Healthcare Investments Ltd, Zug, Switzerland |
| Issue amount | CHF 60‘000‘000 with the possibility to increase the amount up to a maximum of CHF 75'000'000 |
| Coupon | [1⅛-1⅝]% p.a. |
| Term | 6 years |
| Issue price | 100% |
| Redemption | 100% |
| Issue date | 12 July 2021 |
| Trading / Listing | Provisional admission to trading on the SIX Swiss Exchange expected as per 9 July 2021; thereafter definitve listing and admission to trading will be applied for. |
The final terms (issue amount and coupon) will be fixed and communicated based on demand in the book building and on general market conditions no later than 18 June 2021 after close of trading. The book building can be terminated by the Joint Lead Managers at any time.
HBM Healthcare Investments and its Investment Advisor HBM Partners have agreed, that no management fee shall be due on the financial debt raised through the issue of this bond.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for bonds or any other securities of HBM Healthcare Investments Ltd. This news release does not constitute a prospectus within the meaning of the Swiss Financial Services Act («FinSA») and implementing provisions under the Swiss Financial Services Ordinance («FinSO») nor a listing prospectus in the sense of the Listing Rules of SIX Swiss Exchange Ltd or a prospectus pursuant to any other legislation or regulation. A decision to purchase or subscribe for bonds must be made solely on the basis of the relevant prospectus. The preliminary prospectus and final prospectus both issued in German relating to the bonds (which are expected to be available on 15 June 2021 and 18 June 2021, respectively) may be ordered free of charge by e-mail from Helvetische Bank AG at prospectus@helvetischebank.ch or by calling +41 (0)44 204 56 19.
This news release does not constitute a prospectus or a supplementary prospectus pursuant to the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the «EU Prospectus Regulation») or the EU Prospectus Regulation as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the «UK Prospectus Regulation»). This news release is only addressed to, and is only directed at, qualified investors in any member state of the European Economic Area within the meaning of the EU Prospectus Regulation. The bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area.
This news release is directed only at persons who are qualified investors within the meaning of the UK Prospectus Regulation and who (i) have professional experience in matters relating to investments falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) or (ii) are persons falling within Article 49 (2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) or to whom it may otherwise lawfully be communicated (all such persons together being referred to as relevant persons). The bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom. This news release is only directed at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.
NEITHER THIS DOCUMENT NOR ANY PART OR COPY OF IT NOR THE INFORMATION CONTAINED IN IT AND ANY RELATED MATERIALS MAY BE TAKEN OR TRANSMITTED INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR TO ANY RETAIL INVESTOR IN THE EEA OR THE UNITED KINGDOM OR DISTRIBUTED OR REDISTRIBUTED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, TO ANY RETAIL INVESTOR IN THE EEA OR THE UNITED KINGDOM OR TO ANY RESIDENT THEREOF.This news release is not for distribution in, nor does it constitute an offer of securities in the United States. Neither this news release nor any copy of it may be taken or transmitted into the United States, its territories or possessions, or distributed, directly or indirectly, in the United States, its territories or possessions or to any US person as defined in Regulation S («Regulation S») under the US Securities Act 1933, as amended (the «Securities Act»). Any failure to comply with this restriction may constitute a violation of United States securities law. Accordingly, each person viewing this document will be deemed to have represented that it is not a US person within the meaning of Regulation S of the Securities Act. Securities may not be offered or sold in the United States absent registration or an exemption from registration. HBM Healthcare Investments Ltd has not registered and does not intend to register any securities that may be described herein in the United States or to conduct a public offering of any securities in the United States.
This document is not an offer of securities for sale or purchase in the United States. The securities to which this document relates have not been and will not be registered under the Securities Act, and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. There will not be a public offering of securities in the United States.
This document has been prepared by HBM Healthcare Investments Ltd and may not be copied, amended, offered, sold or otherwise given to third parties by the recipient without the consent of HBM Healthcare Investments Ltd. The German version of the document is applicable and binding in any event. Versions of the document in other languages are for information purposes only. Due care has been taken to ensure that the facts set out herein are accurate and that all opinions expressed herein are fair and reasonable. Some information quoted was obtained from external sources HBM Healthcare Investments Ltd considers to be reliable.HBM Healthcare Investments Ltd cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions. The facts and information set out in this document are as current as possible but may change in the future. Both HBM Healthcare Investments Ltd as such and its directors, officers, employees and advisors or any other person disclaim any express or implied liability or warranty as to the accuracy or completeness of the information contained in this document.
This document may contain projections or other forward-looking statements relating to HBM Healthcare Investments Ltd that involve inherent risks and uncertainties, both general and specific, and there is a risk that the projections, forecasts, plans and other explicit or implicit contents of forward-looking statements may prove to be inaccurate. All forward-looking statements are based on information available to HBM Healthcare Investments Ltd on the date of their publication; HBM Healthcare Investments Ltd is only obliged to update these statements if required to do so by applicable laws.
HBM Healthcare Investments announced today, that Tata Digital, a fully-owned subsidiary of Tata Sons Private Limited, to acquire a majority stake of its privately held portfolio company 1mg.
HBM Healthcare Investment was one of the early backers of 1mg and invested in various financing rounds a total of CHF 17 million since May 2016. As part of the transaction with Tata Digital, which comprises a purchase of primary and secondary shares by Tata Digital, HBM Healthcare Investments to sell about one quarter of its shareholding and will continue to own a stake of about four percent in 1mg.
Founded in 2015, 1mg is a leading player in the eHealth space and enables easy & affordable access to a wide range of products like medicines, health & wellness products, diagnostics services & tele-consultation to customers. The company operates three state of the art diagnostics labs, has a supply chain covering over 20,000 pincodes across the country and through its subsidiaries is also engaged in the business of B2B distribution of medicines & other healthcare products.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for securities. This news release does not constitute a prospectus within the meaning of Art. 35ff FinSA, or securities prospectus in the sense of the German securities prospectus law. This news release and the information contained therein is not intended for distribution to the United States of America (USA) or within the USA and may not be distributed or forwarded to US persons (including legal persons) or to publications with a general distribution in the USA. This news release is not an offer or solicitation to buy securities in the United States. HBM Healthcare Investments AG's securities were not issued in accordance with the U.S. U.S. securities laws, and may not be sold, offered for sale, or delivered in the U.S. or to U.S. individuals without prior registration or without a registration exemption. Some information quoted was obtained from external sources HBM considers to be reliable. HBM cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions.
HBM Healthcare Investments announced today that its portfolio company Valo Health (“Valo”), a technology company using human-centric data and artificial intelligence (AI) powered computation to transform the drug discovery and development process, and Khosla Ventures Acquisition Co. (“KVAC”, Nasdaq: KVSA), a special purpose acquisition company founded by affiliates of Khosla Ventures, have entered into a definitive merger agreement.
The transaction values the combined company at a pro forma market value of approximately USD 2.8 billion. The combined company is anticipated to have a pro forma cash balance of approximately USD 750 million before deducting anticipated transaction expenses, including existing Valo cash of approximately USD 250 million as of the date hereof, approximately USD 333 million of net cash held in KVAC’s trust, after deducting deferred underwriting commissions and assuming no redemptions, and a USD 168.5 million private investment in public equity (“PIPE”) priced at $10.00 per share., to which HBM Healthcare Investments committed USD 7 million.
HBM Healthcare Investment will revalue its existing investment of USD 15 million in Valo Health to reflect the agreed merger valuation. Trading of the KVAC shares may serve as additional valuation parameter. As a result, the net asset value per HBM-share is expected to increase by approximately 0.6 percent.
Closing of the transaction is anticipated to occur in the third quarter of 2021 and is subject to the approval of KVAC’s stockholders and the satisfaction or waiver of certain other customary closing conditions.
Valo is building a fully integrated, end-to-end approach to developing drugs from target discovery through approval using its Opal Computational Platform™. Built on large scale, highquality longitudinal and omics data, Valo’s Opal platform is designed to accelerate the rate of drug discovery compared to that of traditional operators, by allowing information and data to be shared in parallel at every stage of the drug discovery and development process, reducing the dependency on surrogates, and enabling insights across preclinical and clinical to drive towards therapeutic success. Valo has built an internal pipeline with two clinical-stage assets and 15 prioritized pre-clinical assets across cardiovascular, metabolic renal, neurodegeneration and oncology fields, as well as a deep pipeline of additional candidates. This transaction positions Valo to use the full power of technology to accelerate multiple programs through clinical trials.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for securities. This news release does not constitute a prospectus within the meaning of Art. 35ff FinSA, or securities prospectus in the sense of the German securities prospectus law. This news release and the information contained therein is not intended for distribution to the United States of America (USA) or within the USA and may not be distributed or forwarded to US persons (including legal persons) or to publications with a general distribution in the USA. This news release is not an offer or solicitation to buy securities in the United States. HBM Healthcare Investments AG's securities were not issued in accordance with the U.S. U.S. securities laws, and may not be sold, offered for sale, or delivered in the U.S. or to U.S. individuals without prior registration or without a registration exemption. Some information quoted was obtained from external sources HBM considers to be reliable. HBM cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions.
Swixx BioPharma, a privately held company in the portfolio of HBM Healthcare Investments, today announced the signing of an investment agreement with Mérieux Equity Partners and its existing shareholders. Under the terms of the agreement, Mérieux Equity Partners will invest EUR 40 million for a minority stake in Swixx. HBM Healthcare Investments, who is an investor in Swixx since 2017, participates with EUR 5 million in the capital increase. The financing is subject to routine regulatory approvals and is expected to close in the next few months. The new capital will be used to leverage the steady growth that Swixx has enjoyed over the past few years. Mérieux Equity Partners and HBM Healthcare Investments have arrangements in place to further increase their investment in Swixx based upon the realisation of certain milestones.
In accordance with its valuation principles, HBM Healthcare Investments will revalue its investment in Swixx to reflect the equity valuation underlying to this capital increase. As a result, the net asset value per HBM-share increases by approximately 2 per cent.
Founded in Switzerland in 2014 by Petr Němec and Stuart Swanson, Swixx BioPharma is a specialized distributor of rare diseases, Rx and OTC medicinal products in Central & Eastern Europe, and acts as a true commercialization partner for pharma and biotech companies in this area. It aims to fully replace its partners capabilities in countries that multinationals choose not to enter, or to exit. With 550+ employees, Swixx BioPharma is the largest agent for ethical pharmaceuticals serving research-based biopharma in CEE and has experienced exceptional growth over the last few years, from less than EUR 50 million in revenues in 2017 to EUR 230 million in net sales in 2020. Its clients include international pharma and biotech companies such as Bristol-Myers Squibb, Amgen, Seattle Genetics, Y-mabs, Alexion, Jazz Pharmaceuticals, UPSA, Vifor Pharma, HRA Pharma and others.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for securities. This news release does not constitute a prospectus within the meaning of Art. 35ff FinSA, or securities prospectus in the sense of the German securities prospectus law. This news release and the information contained therein is not intended for distribution to the United States of America (USA) or within the USA and may not be distributed or forwarded to US persons (including legal persons) or to publications with a general distribution in the USA. This news release is not an offer or solicitation to buy securities in the United States. HBM Healthcare Investments AG's securities were not issued in accordance with the U.S. U.S. securities laws, and may not be sold, offered for sale, or delivered in the U.S. or to U.S. individuals without prior registration or without a registration exemption. Some information quoted was obtained from external sources HBM considers to be reliable. HBM cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions.
The invitation to the 20th Ordinary Shareholders’ Meeting on 18 June 2021 has been sent to the shareholders of HBM Healthcare Investments today.
In accordance with the Ordinance 3 on Measures to Combat the Coronavirus (COVID-19), issued by the Swiss Federal Council, this year's Ordinary Shareholders Meeting is not held in the usual form, i.e. the shareholders are not permitted to participate in person. The Board of Directors has resolved in accordance with Art. 27 of the said Ordinance, that the shareholders may exercise their rights exclusively through the independent proxy by way of written or electronic instruction and power of attorney.
The detailed invitation with all motions of the Board of Directors is enclosed and displayed on the Company’s website www.hbmhealthcare.com/en/news.
Agenda for the 20th Ordinary Shareholders’ Meeting on 18 June 2021
1. Statutory financial statements and group financial statements 2020/2021; 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 283'034'893.
4. Elections regarding the Board of Directors
- Re-elections of the Chairman and of the Members of the Board of Directors
- Election of Dr. Eilaine V. Jones as a member of the Board of Directors
- 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 12.50 per share through nominal value
repayment
9. Miscellaneous
HBM Healthcare Investments also published today its Annual Report 2020/2021 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.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for securities. This news release does not constitute a prospectus within the meaning of Art. 35ff FinSA, or securities prospectus in the sense of the German securities prospectus law. This news release and the information contained therein is not intended for distribution to the United States of America (USA) or within the USA and may not be distributed or forwarded to US persons (including legal persons) or to publications with a general distribution in the USA. This news release is not an offer or solicitation to buy securities in the United States. HBM Healthcare Investments AG's securities were not issued in accordance with the U.S. U.S. securities laws, and may not be sold, offered for sale, or delivered in the U.S. or to U.S. individuals without prior registration or without a registration exemption. Some information quoted was obtained from external sources HBM considers to be reliable. HBM cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions.
Friday, 18 June 2021, 4.45 pm at the Company's registered office in Zug
In accordance with the Ordinance 3 on Measures to Combat the Coronavirus (COVID-19), issued by the Swiss Federal Council, this year's Ordinary Shareholders Meeting is not held in the usual form, i.e. the shareholders are not permitted to participate in person. The Board of Directors has resolved in accordance with Art. 27 of the said Ordinance, that the sharehold-ers may exercise their rights exclusively through the independent proxy by way of written or electronic instruction and power of attorney.
The Board of Directors regrets the continuing extraordinary restrictions and looks forward to your participation in person in the 2022 Ordinary Shareholders' Meeting.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for securities. This news release does not constitute a prospectus within the meaning of Art. 35ff FinSA, or securities prospectus in the sense of the German securities prospectus law. This news release and the information contained therein is not intended for distribution to the United States of America (USA) or within the USA and may not be distributed or forwarded to US persons (including legal persons) or to publications with a general distribution in the USA. This news release is not an offer or solicitation to buy securities in the United States. HBM Healthcare Investments AG's securities were not issued in accordance with the U.S. U.S. securities laws, and may not be sold, offered for sale, or delivered in the U.S. or to U.S. individuals without prior registration or without a registration exemption. Some information quoted was obtained from external sources HBM considers to be reliable. HBM cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions.
Board of Directors of HBM Healthcare Investments Ltd proposes Dr Elaine V. Jones, an experienced and well connected executive, to be elected to the Board of Directors at the Shareholders' Meeting on 18 June 2021. In this regard, the Company refers to its announcement of 2 November 2020.
Dr Jones has more than 20 years of investment experience in venture capital financing, focusing on biosciences. For more than ten years, she was vice-president at Pfizer Ventures with responsibility for managing investments in biotechnology and healthcare companies. Prior to that, Dr Jones worked at EuclidSR Partners and at SR One, the former venture capital fund of GlaxoSmithKline.
The three long-standing members of the Board of Directors, Prof. Dr Heinz Riesenhuber (Vice Chairman), Dr Eduard E. Holdener and Robert A. Ingram, are retiring and therefore not standing for re-election at the forthcoming Shareholders' Meeting .
'Over the last two decades, Heinz, Ed and Bob have been instrumental in establishing and building up our company. On behalf of the Board of Directors and the Mangement I thank them for their valuable services and enormous commitment over the years and wish them all the best for their personal future. At the same time, we are looking forward to working with Elaine Jones and the other existing directors Ruedi Lanz, Germano Giuliani and Stella Xu.' comments Chairman Hans Peter Hasler.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
In the 2020/2021 financial year, HBM Healthcare Investments recorded a profit of CHF 756 million, the highest since it was founded 20 years ago. The net asset value (NAV) rose by more than half (+52 percent) in the reporting year and the HBMN shares advanced 79 percent including distribution.
The profit can mainly be attributed to IPOs and takeovers from the portfolio of private companies and is clear evidence of the success of HBM Healthcare’s investment strategy. Over the past 20 years, HBM Healthcare Investments has channelled some CHF 2 billion in more than 160 private companies and supported the development of numerous medical innovations as a result.
Based on the excellent financial results, the Board of Directors is proposing a considerably higher cash distribution of CHF 12.50 per share. Of this, CHF 9.50 is for the ordinary payout (previously CHF 7.70) and CHF 3.00 for a one-off anniversary payment.
Record profit of CHF 756 million
In the 2020/2021 financial year, HBM Healthcare Investments achieved a profit of CHF 756 million, the largest since the Company was founded. In the reporting year, net asset value (NAV) rose by 52 percent. Including distributions, Shareholders achieved an impressive return of 79 percent.
The private companies portfolio (including the public companies originating from the portfolio of private companies) increased by a total of CHF 662 million. The increase in value was largely the result of 12 IPOs (BioAtla CHF 94 million, Harmony Biosciences CHF 79 million, Cathay Biotech CHF 76 million, ALX Oncology CHF 49 million, Instil Bio CHF 36 million, others CHF 76 million) and seven acquisitions in the reporting year (Viela Bio, Forbius and Corvidia CHF 22 million each and others CHF 18 million). The total gains from the other revaluations came to CHF 168 million. Of this, CHF 123 million was from changes in market prices of public companies (SpringWorks CHF 49 million, Pacira BioSciences CHF 30 million and others CHF 44 million) and CHF 45 million from write-ups in relation to private companies in line with valuation rules. This figure includes write-downs of CHF 16 million relating to a few smaller investments owing to unsatisfactory trial results.
The increase in the value of fund investments amounted to CHF 49 million. This was primarily attributable to two funds: HBM Genomics (CHF 23 million, primarily driven by the IPO of Seer) and 6 Dimensions Capital (CHF 19 million, various IPOs and takeover of Viela Bio).
The portfolio of public companies grew by CHF 276 million. The largest contribution of CHF 68 million came from the takeover of Immunomedics by Gilead. Gains were also made by Argenx (CHF 38 million), Rocket Pharmaceuticals and Biohaven Pharmaceuticals (CHF 21 million each).
The hedging positions for market and foreign currency risks burdened the result with CHF 57 million and CHF 12 million respectively, while the other assets lowered the result by CHF 1 million net.
The management fees of CHF 26 million reflected the increase in net assets and market capitalisation. The large increase in value above the high water mark achieved during the reporting year triggers performance fees of CHF 121 million to the investment advisor and CHF 8 million variable compensation to the Board of Directors. Other operating and financial expenses were stable and came in below CHF 6 million.
Net assets exceed CHF 2 billion
Net assets increased by CHF 0.7 billion to CHF 2.15 billion in the reporting year. Of the overall assets of CHF 2.4 billion1), 18 percent were allocated to private companies, 9 percent to funds, 58 percent to public companies and 1 percent to other assets. Around two-thirds of the public companies originate from the private companies portfolio. The proportion of cash and cash equivalents1) amounted to 14 percent of net assets.
Market hedging was reduced in the first calendar quarter and, as at the end of March, represented around 7 percent of the portfolio of listed companies. The extent of currency hedging of the US dollar against the Swiss Franc was around 53 percent.
CHF 270 million invested in private companies
In the reporting year, HBM Healthcare Investments invested a total of CHF 211 million in 24 new private companies. CHF 176 million of this total was paid in and CHF 35 million booked as investment commitment. An additional CHF 59 million was invested in existing private companies as follow-on financings.
Six new investments were made in private companies in the first calendar quarter of 2021.
- IO Biotech based in Copenhagen, Denmark, received an investment commitment of EUR 20 million (EUR 8 million paid in). The company has a pipeline of immunotherapies for the treatment of cancer.
- Mineralys Therapeutics in Philadelphia, USA, received an investment commitment of USD 10 million (USD 6.7 million paid in). Mineralys is testing a molecule to treat high blood pressure in phase II of clinical development.
Further investments of between USD 5 and 7.5 million each were made in Visen Pharmaceuticals (development and marketing of endocrinology treatments for rare diseases for Ascendis Pharma in China), eGenesis Bio (gene editing technology used in xeno transplantation), Pyxis Oncology (portfolio of potent biologics for difficult-to-treat cancers) and FogPharma (development platform based on cell-penetrating mini proteins (CPMPs) for innovative cancer treatments).
Details on the new investments made in previous quarters can be found in the respective quarterly reports.
In addition to direct investments, new investment commitments were made to two funds which are primarily active in China. USD 25 million is allocated to 120 Capital (formerly 6 Dimensions Capital) and USD 15 million to C-Bridge Healthcare Fund V.
Substantial increase in cash distribution to CHF 12.50 per share
Thanks to excellent business results and a positive outlook, the cash distribution can be significantly increased. The Board of Directors is proposing to the Shareholders’ Meeting to raise the ordinary distribution from the previous CHF 7.70 per share to CHF 9.50 per share.
In addition, shareholders are to benefit from a one-off anniversary payment of CHF 3.00. The proposed payout therefore amounts to a total of CHF 12.50 per share in the form of a withholding tax-exempt par value repayment.
Outlook
The HBM Healthcare Investments’ portfolio has been carefully assembled and is very well balanced. The major investments are in quality companies with excellent market positions in their fields. These companies are therefore interesting candidates for takeovers, but can also remain independently and create substantial added value on their own.
The Company also holds smaller investments in promising companies in earlier development phases which therefore have high value-creation potential. These investments are carefully monitored and will be increased over time if their potential continues to be considered intact.
In the reporting year, a range of promising new investments was added to the portfolio.
The fundamental outlook for the healthcare sector remains positive. The innovation developed by the companies and the still untapped demand for medical treatments offer numerous attractive investment opportunities. We still rate the environment for finance, public offerings and company takeovers as good. All this favours the Company’s investment strategy, which should continue to generate considerable added value in the years to come.
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 27 May 2021 and will be available on the Company's website from that date onwards.
1) After deduction of the liability from market hedging amounting to CHF 0.1 billion.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
About HBM Healthcare Investments
HBM Healthcare Investments invests in the healthcare sector. The Company holds and manages an international portfolio of promising companies in the human medicine, biotechnology, medical technology and diagnostics sectors and related areas. Many of these companies have their lead products already available on the market or at an advanced stage of development. The portfolio companies are closely tracked and actively guided in their strategic direction. This is what makes HBM Healthcare Investments an interesting alternative to investments in big pharma and biotechnology companies. HBM Healthcare Investments has an international shareholder base and is listed on SIX Swiss Exchange (ticker: HBMN).
Disclaimer
The publication is for information purposes only and does not constitute an offer to sell or a solicitation to buy or subscribe for securities. This news release does not constitute a prospectus within the meaning of Art. 35ff FinSA, or securities prospectus in the sense of the German securities prospectus law. This news release and the information contained therein is not intended for distribution to the United States of America (USA) or within the USA and may not be distributed or forwarded to US persons (including legal persons) or to publications with a general distribution in the USA. This news release is not an offer or solicitation to buy securities in the United States. HBM Healthcare Investments AG's securities were not issued in accordance with the U.S. U.S. securities laws, and may not be sold, offered for sale, or delivered in the U.S. or to U.S. individuals without prior registration or without a registration exemption. Some information quoted was obtained from external sources HBM considers to be reliable. HBM cannot guarantee the adequacy, accuracy, timeliness or completeness of or be held responsible or liable for errors of fact regarding such data and information obtained from third parties, and this data may change with market conditions.
HBM Healthcare Investments will close its 20th financial year, ending on 31 March 2021, with a record result. The net asset value per share (NAV) rose by 52 percent to CHF 309.25. The share price climbed disproportionately by 79 percent to CHF 332.50. Based on these key figures, HBM Healthcare Investments expects to report a net profit of more than CHF 750 million for the financial year (previous year: net profit of CHF 182.7 million).
Thanks to 20 years of investment experience as a global investor, with a broad network of excellent contacts, HBM Healthcare Investments was able to successfully expand and develop its portfolio even in the difficult Corona year. The record profit is based on an above-average number of twelve IPOs and eight trade sales from the portfolio of private companies and a broad recovery of the financial markets during the financial year. With investments of around CHF 270 million in existing and more than twenty new private companies, the foundation for future growth was also laid. In this respect, the outlook remains confident.
The aforementioned figures are preliminary and unaudited based on the current status of the closing process. The final annual result will be published on Friday, 7 May 2021.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
With Instil Bio (Nasdaq: TIL) and Connect Biopharma (Nasdaq: CNTB), two more private companies from the HBM Healthcare Investments portfolio successfully went public last Friday.
Instil Bio raised USD 320 million in new capital by issuing 16 million shares at a price of USD 20.00 per share. On the first day of trading, the share price rose to USD 26.44 (+32.2%).
HBM Healthcare Investments has invested a total of USD 12.5 million in Instil Bio since June 2020. The investment was previously valued at USD 20.3 million based on the last financing round. A further USD 6 million was invested in the IPO. Following the IPO, HBM Healthcare Investments thus holds 2.2 million shares with a total value of USD 59.1 million.
Instil Bio is developing a cell therapy pipeline with autologous tumour-infiltrating lymphocytes (TIL) for the treatment of cancer. The lead TIL candidate, ITIL-168, is being developed for the treatment of advanced melanoma.
Connect Biopharma raised USD 191.3 million through the IPO by issuing 11.25 million American Depositary Shares (ADS) at a price of USD 17.00 per ADS. The shares closed at USD 18.49 (+8.8%) on the first day of trading.
HBM Healthcare Investments invested USD 10 million in Connect Biopharma in August 2020 and increased its stake by a further USD 5.1 million at the IPO. Following the IPO, HBM Healthcare Investments holds 1.2 million ADS worth USD 22.4 million.
Connect Biopharma develops therapies for the treatment of T-cell related inflammatory diseases. The company has a pipeline of four drug candidates. The two most advanced clinical-stage programmes, CBP-201 and CBP-307, are potentially differentiated product candidates against validated targets for the treatment of atopic dermatitis and ulcerative colitis and Crohn's disease.
Longboard Pharmaceuticals (Nasdaq: LBPH), a private company in the portfolio of HBM Healthcare Investments, completed its IPO last Friday. The company raised USD 80 million in new capital by issuing 5 million shares at a price of USD 16.00 each. On the first day of trading, the share price closed at USD 16.65 (+4.1%).
HBM Healthcare Investments invested USD 10 million in Longboard Pharmaceuticals in October 2020 and increased its stake by a further USD 8 million in the IPO. Following the IPO, HBM Healthcare Investments holds 1.88 million shares with a total value of USD 31.3 million.
Longboard Pharmaceuticals focuses on the development of novel, transformative drugs for neurological diseases. The most advanced compound, LP352, an oral, centrally acting 5-HT2c superagonist, is being tested for the potential treatment of developmental and epileptic encephalopathies such as Dravet syndrome, Lennox-Gastaut syndrome and other epileptic disorders.
Horizon Therapeutics (Nasdaq: HZNP) and Viela Bio (Nasdaq: VIE) today announced that the companies have entered into a definitive agreement under which Horizon will acquire all of the issued and outstanding shares of Viela Bio for USD 53.00 per share in cash, which represents a fully diluted equity value of approximately USD 3.05 billion. The deal is expected to close by the end of the first quarter 2021.
HBM Healthcare Investments invested a total of USD 29.5 million in Viela since July 2019, when the company was still privately held. As of today, HBM Healthcare Investments holds 1.75 million Viela shares worth USD 92.75 million, based on the takeover price of USD 53.00 per share, which represents a 53 percent premium over Viela's closing share price of USD 34.68 of last Friday.
HBM Healthcare Investments continued its impressive growth in net assets in the third quarter of the 2020/2021 financial year. Thanks to a quarterly profit of CHF 203 million with contributions from all portfolio categories, the result for the first nine months rose to CHF 645 million. The highlights included five IPOs and one sale from the portfolio of private companies. Six new investments were made to compensate for these disposals and more are planned. A total of CHF 95 million was invested in private companies and the portfolio allocation therefore remained stable. HBM Healthcare continued to hedge market risk and increased the hedging of US dollar currency risk. The fundamental outlook for the healthcare sector remains favourable and HBM Healthcare has sufficient liquidity to seize new opportunities.
HBM Healthcare Investments closed the third quarter of the 2020/2021 financial year with a net profit of CHF 203 million. Net asset value (NAV) rose by 11 percent and the share price gained 13 percent. Over the first nine months of the financial year, profit totalled CHF 645 million and NAV grew by 44.5 percent.
All portfolio categories (private companies, public companies and funds) increased in value during the quarter. In the portfolio of private companies, the sale of Westmed in addition to five IPOs - C4 Therapeutics, Everest Medicines, Galecto, Seer and BioAtla - made a substantial contribution to the quarterly profit. Public companies, including those originating from the portfolio of private companies, also saw an overall increase in value. The declining share price of Cathay Biotech was more than made up for by increases in the value of companies such as ALX Oncology, SpringWorks Therapeutics and Y-mAbs Therapeutics.
In the fund portfolio, HBM Genomics' early-stage investment approach was validated for the first time with the IPO of Seer. HBM Genomics is an investment vehicle of HBM Healthcare for investments in emerging companies with new technologies. The California-based company Seer is engaged in proteome research and raised USD 175 million in new capital at its IPO in early December 2020. HBM Genomics was one of the early investors in Seer and has participated in several of the company's financing rounds since December 2017 with a total of USD 2.3 million (at an average price of USD 4.21 per share). In addition, HBM Healthcare Investments directly invested another USD 2.75 million (USD 8.03 per share) in May 2020. By the end of December, the price of Seer shares on the Nasdaq had risen to more than USD 56. As a result, a small investment ended up making a substantial contribution of CHF 34 million to the quarterly profit.
Hedging positions made a positive contribution to profit in the reporting period. While general market hedging had a negative impact on the result, currency hedging, which had been increased by a further USD 200 million to USD 1.2 billion in the reporting period, paid off: a significant portion of the decline in the US dollar against the Swiss franc was absorbed in this way.
New investments in six private companies
In the period, HBM Healthcare Investments invested a total of CHF 66 million in six new private companies. An additional CHF 29 million were invested in existing private portfolio companies as part of follow-on financing arrangements.
- A new investment of USD 20 million was made in Ambrx, which is based in San Diego, USA. Ambrx is developing a pipeline of oncology therapies and also has development partnerships with a number of pharmaceutical companies. Its most advanced development programme, ARX788 for the treatment of HER2-positive metastatic breast cancer, recently received the FDA's Fast Track designation, which opens the door for accelerated approval.
- A USD 15 million investment was made in Valo Health in Boston. Valo has an integrated platform for drug development that combines human and machine intelligence in order to make the discovery and development of new therapies more efficient.
- Further new investments were made in Longboard Pharmaceuticals (USD 10 million, spin-off of Arena Pharmaceuticals with a development pipeline for neurological diseases), River Renal (USD 16 million, thereof USD 10 million already paid in, two development programmes to treat severe chronic kidney diseases), Neuron23 (USD 7 million, pre-clinical development platform for the targeted treatment of neurological diseases) and Werewolf Therapeutics (USD 5 million, immuno-oncology, protein engineering technology to improve activity, stability and tumour selectivity within a single molecule).
Portfolio composition remains stable
The composition of the portfolio remained stable compared to the previous quarter. Disposals from the portfolio of private companies due to IPOs and company sales were replaced by new investments. The share of private companies and funds in the portfolio therefore remained unchanged at 15 percent and 7 percent of assets, respectively. The ratio of private companies continues to be low and is to be increased through additional new investments.
The quota of public stocks fell by 4 percentage points to 60 percent (or 52 percent net of market hedge) due to profit taking in the fourth quarter of calendar 2020. Around two-thirds of the public positions originate from the portfolio of private companies.
The amount of cash and cash equivalents increased by 2 percentage points to 15 percent (or 7 percent after deduction of the repurchase obligation from market hedging).
The partial hedging of market risk of currently around one-eighth of the public portfolio and the exchange rate risk against the Swiss franc of around 70 percent of the USD position will remain in place for the time being.
Outlook
The fundamental outlook for the sector continues to be very good. Medical needs and companies' innovative capacities are high, as events in connection with the pandemic have clearly demonstrated in recent months. The financing environment continues to be favourable and provides portfolio companies access to sufficient capital to advance their clinical developments. Acquisition activity in the healthcare sector is also likely to remain high. All of these factors benefit the investment strategy of HBM Healthcare Investments.
With regard to the general market environment, the strong performance in recent months is likely to give way to intermittent periods of weakening. With its share of private companies and funds and a partial hedging of market risk, HBM Healthcare Investments is prepared well for such a scenario while a well-stocked level of cash and cash equivalents allows to seize opportunities as they arise.
HBM Healthcare Investments expects further IPOs from the portfolio of private companies. Some of the most recent new and follow-on investments were made by means of crossover financings with a view to the intended IPO of these companies. Moreover, a number of portfolio companies are waiting on clinical study results that could have a positive impact on the overall value of the Company's holdings.
The Quarterly Report December 2020 is available on the Company's website https://www.hbmhealthcare.com/en/investors/financial-reports.
HBM Healthcare Investments closed the volatile 2020 calendar year, marked by the uncertainties surrounding the Covid-19 pandemic, with an outstanding result. Net asset value per share (NAV) rose by a high 36.7 percent to CHF 293.21 as at 31 December 2020, while the share price increased by 40.5 percent to close at CHF 305.00 with a small premium to NAV.
The healthcare sector was pleasingly robust, particularly in the segment of research-oriented, small and mid-sized companies. HBM Healthcare Investments benefited from the value appreciation resulting from a record number of ten IPOs and six company acquisitions from the portfolio.
Expected net profit of around CHF 645 million for the first 9 months of the financial year 2020/2021
For the 9 months of the 2020/2021 financial year ending 31 March, the NAV per share increased by 44.5 percent and the share price rose by 64.6 percent. Based on the reported NAV as at 31 December 2020, HBM Healthcare Investments expects a net profit of approximately CHF 645 million for this period. In the same period of the previous year, net profit amounted to CHF 265.7 million.
The aforementioned figures are preliminary based on the current status of the closing process. The final result will be published with the December 2020 quarterly report on 22 January 2021.
2020
With Bioatla (Nasdaq: BCAB), another private company from the HBM Healthcare Investments portfolio successfully went public yesterday. The company placed 10.5 million new shares at USD 18.00, raising USD 189 million. On yesterday's first trading day, the share price rose to USD 31.02 (+72.3%).
HBM Healthcare Investments first invested USD 11.5 million in Bioatla in June 2020 and increased its stake by a further USD 17.6 million in the IPO. Following the IPO, HBM Healthcare Investments holds 2.69 million Bioatla shares with a total value of USD 83.5 million. The IPO increases the net value per HBM-share (NAV) by CHF 5.89 (+2.0%, was not yet included in NAV as of 15 December 2020).
BioAtla is developing a novel class of highly specific and selective antibody-based therapeutics for the treatment of solid tumor cancer.
Earlier this month, Seer Inc. (Nasdaq: SEER) completed its initial public offering on the Nasdaq Stock Exchange. HBM Healthcare Investments was among Seer's early investors and has participated indirectly through HBM Genomics and later also directly in various rounds of the company's financing since December 2017. HBM Genomics is an investment vehicle for early stage investments in emerging companies with new technologies and is owned by HBM Healthcare Investments. The revaluation of the investment based on Seer's share price as at mid-December resulted in a gain of CHF 5.43 per HBM-share and was already reflected in the NAV as of 15 December 2020 published yesterday.
The Board of Directors of HBM Healthcare Investments AG is nominating Dr Elaine Jones for the election to the Board of Directors at the Annual General Meeting on 18 June 2021. Dr Jones is an experienced biopharmaceutical executive with more than 20 years of investment experience as a life science-focused venture capitalist.
Dr Jones was Vice President at Pfizer Ventures, the corporate venture capital arm of Pfizer from 2008 to 2019, where she was responsible for managing biotechnology and healthcare investments. Prior to Pfizer, Dr Jones was a General Partner with EuclidSR Partners, a venture fund focused on the life sciences and technology sectors, as well as in areas where those industries converge to enhance drug discovery and development. She began her investing career in 1999 at S.R. One, the corporate investment fund of GlaxoSmithKline. During her career, she served on the boards of more than 20 early to mid-stage biotechnology, therapeutic and pharmaceutical companies. Previously, she was the Director of Scientific Licensing at SmithKline Beecham and a research scientist in the research and development division of SmithKline Beecham Pharmaceuticals.
Dr Jones received a B.S. in Biology from Juniata College and a Ph.D. in Microbiology from the University of Pittsburgh and conducted post-doctoral research at the National Institutes of Health in the National Institute of Allergy and Infectious Disease. She currently serves on the boards of the three public companies Gritstone (as Chair) CytomX and NextCure, is the Chair of Mironid (UK) and a member of the Advisory Board of Novartis Venture Fund.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
Galecto (Nasdaq: GLTO), a privately held company in the portfolio of HBM Healthcare Investments, completed its intended IPO. The company placed 5.67 million new shares at a price of USD 15.00 per share, raising USD 85 million in new capital. The shares closed unchanged at USD 15.00 on yesterday's first trading day.
HBM Healthcare Investments has invested USD 11.8 million in Galecto since 2018 and increased its stake in the IPO by a further USD 5 million. After the IPO, HBM Healthcare Investments holds 1.5 million shares with a total value of USD 22.4 million. As a result of the IPO, the net asset value per HBM share (NAV) increased slightly by CHF 0.59 (+0.2%).
Galecto is a clinical stage biotechnology company with advanced programs in fibrosis and cancer centered on galectin-3 and LOXL2. The Company's pipeline includes an inhaled galectin-3 modulator currently in Phase 2b for the potential treatment of idiopathic pulmonary fibrosis, as well as two assets about to move into Phase 2 targeting NASH and myelofibrosis. The Company is incorporated in the U.S. and has its operating headquarters in Copenhagen, Denmark.
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 announces that the shareholders of Westmed Holding Company («Westmed»), a privately held portfolio company based in Colorado, USA, have approved a merger of Westmed with a subsidiary of Sunmed Group Holdings LLC. Westmed's shareholders will not participate in the merged company and received a cash payment instead.
HBM Healthcare Investments has held a stake in Westmed since 2003 and owned about 25 percent of the company for a total investment of USD 7 million. The investment was previously valued at USD 12.4 million. The pro rata transaction proceeds of USD 20.3 million correspond to 2.9 times the invested capital and leads to a slight increase of the net asset value per HBM share (NAV) by CHF 0.87 (+0.3%).
Westmed is a global market leader in the development, manufacturing and distribution of specialized disposable and reusable anesthesia and respiratory care products.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments maintained its strong performance in the second quarter of the 2020/2021 financial year, with four IPOs and three takeovers making a substantial contribution to its quarterly profit of CHF 215 million. This took the profit for the first six months to CHF 441 million, while net asset value increased by 30.5 percent and the HBMN share price climbed by 46.2 percent.
The healthcare sector continues to provide an attractive investment universe. HBM Healthcare invested CHF 80 million in private companies, including eight new investments in Switzerland, the United States, Israel and China. The market environment for IPOs and takeovers remains favourable, as indicated by first transactions after the reporting date. HBM Healthcare is confident about the outlook for the second half of the financial year.
Four IPOs and three company sales
The four IPOs of Cathay Biotech, Harmony Biosciences, ALX Oncology and iTeos Therapeutics unlocked added value from the portfolio of private companies and contributed CHF 229 million overall to the quarterly result. This equates to average growth of around 80 percent on the carrying values of these investments reported prior to going public.
The added value generated received an additional CHF 56 million boost in the reporting period from the sale of the three portfolio companies Forbius, Immunomedics and Shriji Polymers.
In August, Bristol Myers Squibb acquired the private portfolio company Forbius for an upfront payment and performance-based milestone payments. The upfront payment equated to a two-fold return on the capital invested by HBM Healthcare of CHF 8.5 million. In the event of a successful outcome, the milestone payments could additionally correspond to several times the invested capital.
The public portfolio company Immunomedics received a takeover offer of USD 21 billion from Gilead Sciences in September. Immunomedics was founded back in 1982, making it one of the oldest biotechnology companies around. In spring 2020, after almost forty years of research and development and numerous setbacks, the company was granted first-time authorization for one of its in-house developed medications, TrodelvyTM, which is used to treat patients with triple negative breast cancer. HBM Healthcare Investments acquired its first stake in Immunomedics in May 2017 and has generated around CHF 80 million from the investment over the years.
The shareholding in India-based company Shriji Polymers was sold to a group of investors in India for around twice the amount invested. The investment in Shriji was made in 2017 as a co-investment with Tata Capital HBM Healthcare Fund. The latter has sold its holding in Shriji too.
The USD 5 million investment in Complexa was written off in full due to unsatisfactory data from phase II studies. The company is in liquidation.
Eight new investments in private companies
The portfolio of private companies was bolstered by CHF 66 million in the past quarter with eight promising new investments. An additional CHF 14 million were invested in existing private portfolio companies as part of follow-up financings.
- Two new investments with a Swiss connection were made in Polyneuron Pharmaceuticals (CHF 10 million) and Monte Rosa Therapeutics (USD 10 million, USD 5 million paid in). Polyneuron was founded in 2014 as a spin-off of the University of Basel and is developing a cutting-edge therapy to treat antibody-mediated autoimmune diseases of the nervous system.
Monte Rosa was founded by Ridgeline, a research platform of Versant Ventures headquartered at the Technologiepark Basel. The company conducts research into medications aimed at the targeted degradation of pathogenic proteins.
- A total of USD 19 million has been allocated to two companies active in cancer research that are based in California, USA. BioAtla (USD 11.5 million) in San Diego develops novel monoclonal antibody and cell-based therapeutics. The two programmes run by BioAtla are in phase I/II clinical development to treat lung and skin cancer as well as soft tissue and bone tumours.
Dren Bio (USD 7.5 million, USD 3.7 million paid in) in Forster City is conducting pre-clinical studies into antibody-based therapies for LGL leukaemia and other cancers.
The Israeli company NovellusDx (USD 9 million, USD 3.3 million paid in) is also involved in developing targeted cancer therapies. The company has created an automated high-throughput platform for the functional analysis of hundreds of observed mutations in cancer genes, and to investigate their driver status and their response to drug candidates. On this basis, NovellusDx is testing the non-V600 BRAF inhibitor PLX8394 in a phase I/II clinical trial. This candidate potentially inhibits the growth of mutant cancer cells.
Three investments were made in Chinese companies: Connect Biopharma (USD 10 million), BioShin (USD 8 million) and NiKang Therapeutics (USD 5 million). Connect Biopharma develops next-generation immune modulators for the treatment of autoimmune diseases and inflammation. The most advanced global clinical studies to treat atopic dermatitis (a chronic inflammatory skin disorder) and ulcerative colitis (a chronic inflammatory bowel disease) are in phase II clinical development.
BioShin was founded in 2018 as a subsidiary of the Nasdaq-listed HBM portfolio company Biohaven (ticker: BHVN) for the purpose of developing and marketing in China its portfolio of therapies to treat disorders of the central nervous system (migraine and Alzheimer's Disease).
The holding in NiKang Therapeutics was acquired as a co-investment with C-Bridge Capital, the HBM portfolio fund that had founded NiKang. The company is conducting pre-clinical studies into an HIF2 inhibitor as a potential treatment for renal cancer.
Outlook
The power of innovation and the long-term growth prospects of the healthcare sector remain intact. This offers HBM Healthcare an attractive universe with very promising investment opportunities, while also favouring the market environment for takeovers and IPOs of innovative companies. The carefully compiled portfolio of private and public companies is ideally positioned to take advantage of this positive market climate.
For instance, at the beginning of October, just after the balance sheet date, two other private portfolio companies successfully went public: C4 Therapeutics in the United States and Everest Medicines in Hong Kong. Other companies are planning to follow suit. We also anticipate value-adding transactions from the portfolio of private companies through financing rounds and takeovers.
In the portfolio of public companies, Harmony Biosciences received approval from the US Food and Drug Administration (FDA) in mid-October for expanded use of WakixTM for the indication of cataplexy. Y-mAbs Therapeutics is likewise facing an important regulatory milestone with approval for DanyelzaTM for the treatment of neuroblastoma. Moreover, a number of other companies are waiting on important study results that could have a positive impact on our net asset value overall.
With that in mind, HBM Healthcare Investments enters the second half of the financial year with confidence, but remains cautiously positioned by hedging about ten percent of the market risk and around 70 percent of the USD currency risk due to geopolitical uncertainties (pandemic, US elections, Brexit, etc.).
The Half-year Report September 2020 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.
Everest Medicines (symbol: 1952 HK), a privately held company in the portfolio of HBM Healthcare Investments, today completed its announced initial public offering on the Hong Kong Stock Exchange. The company raised HKD 3.5 billion (CHF 413 million) of new capital through the issuance of 63.5 million shares at a price of HKD 55.00 per share. The share closed today at HKD 72.75 (+32.3%) on the first day of trading.
HBM Healthcare Investments has been invested in Everest Medicines since June 2018 and holds 1.1 million shares worth HKD 81 million (CHF 9.6 million). The investment was previously valued at cost of HKD 31 million (CHF 3.7 million).
In addition, HBM Healthcare Investments has an indirect participation in Everest Medicines of slightly more than CHF 4 million through the C-Bridge Capital IV Fund.
About Everest Medicines
Everest Medicines Limited is a biopharmaceutical company focused on developing and commercializing transformative pharmaceutical products that address critical unmet medical needs for patients in Greater China and other Asian markets. The company has built a portfolio of eight potentially global first-in-class or best-in-class molecules, many of which are in late stage clinical development. These include TrodelvyTM, a breast cancer drug developed by Immunomedics (Nasdaq: IMMU), which was approved by the FDA in the US this year. The Company's therapeutic areas of interest include oncology, autoimmune disorders, cardio-renal diseases and infectious diseases.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
C4 Therapeutics (Nasdaq: CCCC), a private company in the portfolio of HBM Healthcare Investments, completed its planned IPO last Friday. The company raised USD 182 million in new capital by issuing 9.6 million shares at a price of USD 19.00 per share. On the first day of trading the share price closed at USD 25.49 (+34.2%).
HBM Healthcare Investments has invested a total of USD 4.0 million in C4 Therapeutics since May 2020 and increased its stake at the IPO by a further USD 5.7 million. After the IPO, HBM Healthcare Investments holds 0.752 million shares with a total value of USD 19.2 million. The IPO increases the net asset value per HBM share (NAV) by CHF 1.06 (+0.4%).
About C4 Therapeutics
C4 Therapeutics is developing small-molecule drugs that selectively destroy disease-causing proteins via degradation, instead of just blocking them, as is common with other therapies, by using the innate machinery of the cell. This targeted protein degradation approach offers a number of potential advantages over traditional drugs, including the potential to treat a wider range of diseases, reduce drug resistance, achieve higher potency, and decrease side effects through greater selectivity.
C4 Therapeutics has strategic partnerships with Roche, Calico and Biogen and is headquartered in Watertown, MA, USA.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
The net asset value per HBM share (NAV) increased by 30.5 percent to CHF 263.98 in the first six months of the financial year 2020/2021 ending on 31 March. The share price rose by 46.2 percent to CHF 270.00. The four IPO's of Cathay Biotech, Harmony Biosciences, ALX Oncology and iTeos Therapeutics as well as the five trade sales of Immunomedics, Corvidia Therapeutics, Forbius, Shriji Polymers and Vitaeris contributed significantly to this result.
Based on the above key figures, HBM Healthcare Investments expects a significantly higher net profit of around CHF 441 million for the first half year. In the same period last year, net profit was CHF 102.5 million.
These figures are a preliminary result based on the current status of the closing process. The final result will be published with the Half-Year Report September 2020
on 23 October 2020.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
Gilead Sciences (Nasdaq: GILD) and Immunomedics (Nasdaq: IMMU), a listed portfolio company of HBM Healthcare Investments, announced yesterday that the companies have entered into a definitive agreement pursuant to which Gilead will acquire Immunomedics for USD 88.00 per share in cash. The transaction, which values Immunomedics at approximately USD 21 billion, was unanimously approved by both the Gilead and Immunomedics Boards of Directors and is anticipated to close during the fourth quarter of 2020.
HBM Healthcare Investments holds 738'813 shares of Immunomedics worth USD 31.2 million, based on last Fridays' closing share price of USD 42.25. The USD 88.00 per share acquisition price represents a 108 percent premium to Immunomedics' closing price on 11 September 2020.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
Bristol Myers Squibb (NYSE: BMY) and Forbius, a privately held company in the portfolio of HBM Healthcare Investments, today announced that they have entered into a definitive agreement under which Bristol Myers Squibb will acquire Forbius. Forbius has developed a portfolio of highly selective and potent inhibitors of TGF-beta 1 & 3, which are key mediators of immunosuppression and fibrosis.
Under the terms of the agreement Bristol Myers Squibb will acquire all outstanding shares of Forbius for an upfront payment and future success-based milestone payments. Prior to closing, Forbius' non-TGF-beta assets will be transferred to a newly formed private company, which will be retained by Forbius' existing shareholders. The companies anticipate completing the transaction in the fourth quarter of 2020, subject to the satisfaction of customary closing conditions.
HBM Healthcare Investments owns about 11 per cent of Forbius for a total investment of CAD 11.5 million since May 2017. The sum of the upfront amount plus the discounted value of the contingent milestones increases the net asset value per HBM-share (NAV) by CHF 2.70 (+1.0%).
Forbius is a clinical-stage protein engineering company that develops biotherapeutics to treat fibrosis and cancer. Forbius' team of experts designed a proprietary platform of TGF-beta inhibitors with best-in-class potency and selectivity against the principal disease-driving isoforms 1 & 3. Forbius' lead TGF-beta 1 & 3 inhibitor, AVID200, has completed Phase 1a clinical trials in one fibrotic indication as well as in solid tumors.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
The announced IPO of Harmony Biosciences Holdings (Nasdaq: HRMY), a so far privately held company in the portfolio of HBM Healthcare Investments, was successfully completed. The company placed 5.35 million new shares at a price of USD 24.00 per share, raising a total of USD 128 million. On yesterday's first trading day, the share price rose to USD 37.01 (+54.2%).
HBM Healthcare Investments was one of the initial investors in Harmony Biosciences and has invested a total of USD 36.4 million in the company since October 2017. The investment was most recently valued at USD 65.2 million. The stake was increased by a further USD 3.9 million when the company went public. Following the IPO, HBM Healthcare Investments holds 5.43 million shares valued at USD 201 million, corresponding to an ownership of 8.5% in the company. Based on the closing price of the first trading day, the net asset value per HBM-share (NAV) increases by CHF 14.74 (+5.5%).
About Harmony Biosciences
Harmony Biosciences is based in Plymouth Meeting, Pennsylvania, USA and was founded in October 2017 with a vision to provide novel treatments for people with rare neurological disorders, with a focus on patients with narcolepsy.
Harmony's product, WAKIX® (pitolisant), is a first-in-class molecule with a novel mechanism of action specifically designed to increase histamine signalling in the brain by binding to H3 receptors. In August 2019, WAKIX® was approved by the U.S. Food and Drug Administration (FDA), for the treatment of excessive daytime sleepiness (EDS) in adult patients with narcolepsy, and its U.S. commercial launch was initiated in November 2019. WAKIX® is the first-and-only approved product for patients with narcolepsy that is not scheduled as a controlled substance.
About Narcolepsy
Narcolepsy is a rare, chronic and debilitating neurologic disorder of sleep-wake state instability that is estimated to affect approximately 165,000 Americans, with fewer than 50% diagnosed. Narcolepsy is characterized by excessive daytime sleepiness (EDS), which is present in all patients with narcolepsy and is the primary reason why patients seek treatment. EDS is the inability to stay awake or alert throughout the day, including an irrepressible need for sleep, with lapses into drowsiness or sleep, which has a significant impact on a patient's ability to function. Additional symptoms of narcolepsy may include cataplexy (which is characterized by sudden and transient episodes of muscle weakness accompanied by full conscious awareness), hallucinations, sleep paralysis and disrupted nighttime sleep. In most patients, narcolepsy is caused by the loss of hypocretin, a neuropeptide in the brain that, along with histamine, works to support sleep-wake state stability.
The U.S. narcolepsy market had an approximate net sales value of $1.8 billion in 2019, which is expected to grow due to the addition of newly approved therapies, increased physician education and patient awareness, and increased diagnosis rates, among other factors.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
The initial public offering of Cathay Biotech (Chinese name: 上海凯赛生物技术股份有限公司) (SSE STAR Market: 688065), a so far privately held company in the portfolio of HBM Healthcare Investments, on the Chinese technology exchange in Shanghai ("SSE STAR Market") was very successful.
The Company issued 41.66 million new shares to investors at a price of CNY 133.45 per share, raising a total of CNY 5.56 billion (CHF 733 million) of new capital. On today's first day of trading, the shares gained 17.6 percent and closed at CNY 157.00.
HBM Healthcare Investments holds 29.6 million shares of Cathay, representing a 7.1% ownership in the company. Based on today's closing price, the value of the investment is CNY 4.65 billion (CHF 613 million). Since 2006, HBM Healthcare Investments has invested CNY 282 million (CHF 37 million) in Cathay. The investment was previously valued at CNY 1.593 billion (CHF 210 million / CNY 53.80 per share).
Due to the lock-up period of 36 months, HBM Healthcare Investments will value the investment at a discount to the share price of initially 18 percent. This will be reduced linearly over the term (0.5 percent per month). In addition, the capital gains tax and other taxes which may be owned in China upon the sale of the investment are accrued separately. On this valuation basis, the net asset value per HBM-share (NAV) increases by CHF 32.20 (+13.7%). The lock-up discount taken into account corresponds to a value of CHF 12.15 per share.
The revaluation of Cathay increases the net assets of HBM Healthcare Investments to about CHF 1.9 billion. Of this amount, just under 24 percent is attributable to the net book value of the Cathay investment (after lock-up discount and tax provision). Future price and currency fluctuations on the Cathay investment will therefore have a corresponding impact on the NAV of HBM Healthcare Investments.
About Cathay Biotech
Cathay is a high-tech company focused on synthetic biology and other fields, engaged in the research, development, production and sale of new materials based on biological manufacturing processes. The company's currently marketed products mainly focus on the polyamide industry's value chain, i.e. biobased polyamide and raw materials that can be used for the production of biobased polyamide, including DC12 (lauric acid), DC13 (brassylic acid) and biobased 1,5-pentanediamine. Cathay is one of the world's leading companies using bioproduction of new materials on an industrial scale.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
Harmony Biosciences Holdings, a private company in the portfolio of HBM Healthcare Investments, today announced the details of its planned IPO on the Nasdaq stock exchange. The company intends to issue 4.65 million new shares at a price of USD 20 to 23 per share.
HBM Healthcare Investments has invested USD 36.4 million in Harmony since October 2017 and currently holds 5.27 million shares valued at USD 65.2 million.
Harmony Biosciences is a private pharmaceutical company headquartered in Plymouth Meeting, PA, USA. The company was established in October 2017 with a vision to provide novel treatment options for people living with rare, neurological diseases, with a focus on people living with narcolepsy.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
Cathay Biotech (Chinese name: 上海凯赛生物技术股份有限公司) (SSE STAR Market: 688065), a so far privately held company in the portfolio of HBM Healthcare Investments, today announced details of its initial public offering on the Chinese technology exchange in Shanghai ("SSE STAR Market").
The Company issues 41.66 million new shares to investors at an issue price of CNY 133.45 per share, raising a total of CNY 5.56 billion (CHF 721 million) of new capital. The first trading day of Cathay's shares is set for 12 August 2020.
HBM Healthcare Investments has been a shareholder of Cathay since 2006 and invested a total of CNY 282 million (CHF 37 million) in the company. To date, the investment has been valued at CNY 1.593 billion (CHF 207 million / CNY 53.80 per share). At the time of the IPO and based on the issue price of the new shares, HBM Healthcare Investments holds 29.6 million shares of Cathay with a total value of CNY 3.95 billion (CHF 512 million), which corresponds to an ownership interest of 7.1%.
Application of a "lock-up discount" for the valuation
The Cathay shares held by HBM Healthcare Investments are subject to a sales restriction of 36 months ("lock-up period"). HBM Healthcare Investments will therefore value the investment in Cathay for financial reporting and periodic NAV publications at a discount to the market price. The discount was calculated using an option model and initially amounts to 18 percent. The percentage discount will be applied on the respective stock market price and is reduced on a linear basis over 36 months (0.5 percent per month), so that there is no longer a discount at the end of the lock-up period.
The capital gains tax of ten percent on the difference between the tax base and the reported market value, which may be owed in China upon the sale of the investment, as well as any other taxes, will continue to be accrued separately and taken into account in the NAV publications.
HBM Healthcare Investments expects the IPO of Cathay to have a positive effect on the net asset value per HBM share (NAV). Based on the issue price, after deduction of the lock-up discount and the tax provision, the NAV would increase by CHF 23.50 (+9.7%). The factored in lock-up discount corresponds to a value of CHF 10.15 per share. Cathay's share price may be subject to greater price fluctuations after the start of trading, which may have a corresponding impact on the NAV given the size of this investment in the portfolio of HBM Healthcare Investments.
Synthetic biology - a growth market with great potential for the future
Cathay is a high-tech company focused on synthetic biology and other fields, engaged in the research, development, production and sale of new materials based on biological manufacturing processes. The company's currently marketed products mainly focus on the polyamide industry's value chain, i.e. biobased polyamide and raw materials that can be used for the production of biobased polyamide, including DC12 (lauric acid), DC13 (brassylic acid) and biobased 1,5-pentanediamine. Cathay is one of the world's leading companies using bioproduction of new materials on an industrial scale.
By polymerizing dibasic acid and diamine, polyamide can be produced, which can also be used as a synthetic raw material for perfume, hot melt adhesive, lubricating oil, paint, etc. Currently, Cathay's products are used in various fields such as automotives, electronic devices, textiles, medicines, perfumes, etc. Cathay's customers include DuPont, Ems Chemie, Evonik, Novo Nordisk and other internationally renowned companies.
The long-chain dibasic acids produced by Cathay have a dominant position on the world market. The company's biobased 1,5-pentanediamine (currently produced mainly for internal use; some are supplied to customers for the development of downstream applications) and polyamide products have completed pilot trials, and the commercial production line of the Wusu plant is currently being commissioned. It is expected that the commercial production of these products will solve the bottleneck problem of the domestic dual monomer polyamide industry, whose core raw materials depend on imports, and provide the market and customers with new materials from renewable biomass raw materials.
As a revolutionary production method, bio-production uses biomass as a raw material or biological methods for processing and converting materials and provides industrial goods for sustainable development. The production process is environmentally friendly, mild and economical. The future scope for development is very broad to effectively address the excessive dependence of humans on traditional petrochemical and chemical products and the associated environmental pollution and safety risks.
Since the company's founding and after almost two decades of investment in research and development, Cathay has become a leading manufacturing platform for theoretical and technical methods of bioproduction and industrialization. The company has a research and development team in synthetic biology, cell technology, bioprocess engineering, polymer materials and engineering and holds more than hundred patents. With technological progress and continuous research into downstream applications, the innovation and further development of the company's products will lead to a continuous expansion of product application fields in the future. The company has a broad scope for growth.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com
iTeos Therapeutics (Nasdaq: ITOS), a private company in the portfolio of HBM Healthcare Investments, completed its planned IPO last Friday. The company raised USD 201 million in new capital by issuing 10.6 million shares at a price of USD 19.00 per share. On the first day of trading the share price closed virtually unchanged at USD 19.05 (+0.3%).
HBM Healthcare Investments has invested a total of USD 7.9 million (previously valued at USD 8.9 million) in iTeos since May 2018 and increased its stake in the IPO by a further USD 10 million. After the IPO, HBM Healthcare Investments holds 1.54 million shares with a total value of USD 29.3 million. The IPO increases the net asset value per HBM share (NAV) by CHF 1.16 (+0.5%).
About iTeos Therapeutics
iTeos Therapeutics is developing a new generation of highly differentiated immuno-oncology therapeutics. The development pipeline comprises two programs in the clinical phase. The most advanced product candidate, EOS-850, is a highly selective small molecule antagonist targeting the adenosine signaling pathway (A2A receptor antagonist), which plays a key role in immunosuppression in the microenvironment of tumors across a broad range of tumors. EOS-850 is being investigated in an open label Phase 1/2a clinical trial in adult patients with advanced solid tumours.
The lead antibody product candidate, EOS-448, is an antagonist of TIGIT (T-cell immune receptor with Ig- and ITIM domains), a checkpoint involved in both the inhibitory and stimulatory pathways in the immune system. EOS-448 is also designed to activate the Fc-gamma receptor to promote antibody-dependent cellular cytotoxicity (ADCC activity), including the elimination of tumour-infiltrating regulatory T cells (Tregs). EOS-448 is also being tested in an open label Phase 1/2a clinical trial in adult patients with advanced solid tumours.
iTeos Therapeutics is headquartered in Cambridge, MA, USA, and has a research centre in Gosselies, Belgium.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments looks back on a successful first quarter of the 2020/2021 financial year. The significant market recovery, positive corporate news and two acquisitions resulted in a net profit of CHF 226 million for the first three months up to the end of June 2020, three times the amount achieved in the same period of the previous year. Net asset value (NAV) increased by 15.6 percent to CHF 240.72 during this period; the share price (HBMN) increased by 30.0 percent to CHF 247.00.
In the first quarter of the new financial year, HBM Healthcare Investments benefited from a rise in the share price of public companies as well as from two acquisitions of companies from the private portfolio. Of the total portfolio profit of CHF 268 million, CHF 23 million was attributable to private companies, CHF -10 million to funds, CHF 247 million to public companies and market hedging, and CHF 1 million to other assets. The negative currency developments were partially compensated by a profit contribution of CHF 7 million from currency hedging.
Two acquisitions in the portfolio of private companies
With Corvidia Therapeutics and Vitaeris, two companies from the private portfolio were acquired in June, both developing an anti-interleukin-6 monoclonal antibody (anti IL-6 mAb). Corvidia is developing Ziltivekimab for the treatment of cardiovascular diseases in patients with chronic kidney disease; Vitaeris is testing Clazakizumab for the treatment of antibody-mediated rejection in kidney transplants.
Corvidia, based in Waltham, MA, USA, agreed to be acquired by Novo Nordisk. Novo Nordisk will pay USD 725 million upfront and committed to milestone payments of up to USD 1.4 billion. The transaction is expected to close in July. As for the Canadian Vitaeris, CSL Behring exercised its share purchase right received under a strategic partnership in 2017. Again, shareholders are entitled to upfront and milestone payments.
The overall upfront payments totalling CHF 25 million correspond to approximately 3.5 times the invested capital. The payments due upon achievement of regulatory and commercial milestones are in the books with the probability-weighted and discounted value of CHF 10 million, which brings the two acquisitions' net income contribution for the quarter to CHF 27 million.
Public companies benefited from market recovery and positive news
The portfolio of public companies recovered from the market correction in February and March 2020 and increased by a total of CHF 266 million. The increase was held back by the partial market hedging, which was re-initiated in April and May, and impacted the quarterly result by CHF 19 million.
Some of the public companies also benefited from market approvals and positive study results. Immunomedics was granted approval by the US Food and Drug Administration (FDA) for Trodelvy™ for the treatment of metastatic triple-negative breast cancer, while Viela Bio received approval from the FDA for Uplizna™ (neuromyelitis-optica spectrum disease), and Zogenix for Fintepla® (Dravet syndrome).
Argenx published positive data from the pivotal phase III study for the antibody Efgartigimod for the treatment of patients with myasthenia gravis, a chronic neuromuscular disease characterized by weakness and rapid fatigue of the skeletal muscle. Biohaven published positive phase III data from an additional study on migraine prevention for Nurtec™. The drug has been approved in the United States for the treatment of acute migraine in adult patients since the end of February already.
For Y-mAbs Therapeutics, the FDA accepted the submitted priority review application for Danyelza™ (Naxitamab) for the treatment of neuroblastoma. The approval decision is expected by the end of November 2020.
New investments
In the quarter under review, HBM Healthcare invested CHF 24 million in private companies. Of this, CHF 13 million went to existing private companies as follow-on financing. New investments of CHF 11 million have been made in the following three US companies:
> Instil Bio obtained USD 5 million. The company develops cell therapies based on tumour-infiltrating lymphocytes (TIL). The most advanced program for the treatment of metastatic melanoma is about to start pivotal trial.
> C4 Therapeutics received USD 4 million. C4 explores novel therapies based on the targeted elimination of disease-causing proteins. The aim is to treat cancer, neurological disorders and other diseases.
> Seer Biosciences secured USD 2.8 million. The HBM Genomics Fund has been invested in the company since 2017. Seer's technology enables information on the proteome – the totality of all proteins in an organism at a given point in time – with high accuracy and at an unprecedented level of detail and speed. This should enable research breakthroughs in serious medical problems, such as the early detection of diseases.
In addition, HBM Healthcare, as a core investor, made a commitment of SEK 80 million (around CHF 8 million) in the capital increase of BioInvent International, which is listed on the Stockholm Stock Exchange. The capital increase was completed in early July. BioInvent develops novel immune-modulating antibodies for the treatment of hematological cancer and solid tumours.
Outlook
Following the strong performance of the stock markets in recent weeks, HBM Healthcare Investments remains cautiously positioned with regard to the general market environment. Therefore, about one-sixth of the market risk posed by public companies continues to be hedged. In addition, around 60 percent of the USD currency risk against the Swiss franc were hedged at the end of June. The portfolio is thus well-balanced in terms of asset classes and currencies.
With regard to portfolio companies, the Company remains confident and expects a positive and eventful second half of 2020. ALX Oncology completed its initial public offering in mid-July and iTeos Therapeutics filed for an IPO on the Nasdaq. The Chinese Cathay Biotech is preparing an initial public offering on the STAR Market of the Shanghai Stock Exchange. In addition, added value from the portfolio of private companies through acquisitions, financing rounds and divestments of shareholdings is expected.
Alongside the expected market approval of Y-mAbs Therapeutics mentioned above, there are important results of ongoing clinical studies on the agenda for various other public companies, which could likewise have a positive impact on the net asset value.
The Quarterly Report June 2020 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.
ALX Oncology (Nasdaq: ALXO), a privately held company in the portfolio of HBM Healthcare Investments, successfully went public. The company placed 8.5million new shares at a price of USD 19.00 per share, raising a total of USD 161.5 million. On the first day of trading last Friday, the share price closed at USD 30.00 (+57.9%).
HBM Healthcare Investments participated with USD 5 million in a private financing round of ALX Oncology in February 2020 and invested a further USD 7.6 million at the IPO. After the IPO, HBM Healthcare Investments holds 0.93 million shares with a total value of USD 27.8 million. The IPO increases the net asset value per HBM-share (NAV) by CHF 1.74 (+0.7%).
ALX Oncology is developing therapies for the treatment of various forms of leukemia and solid tumors that block the CD47 control mechanism that is exploited by cancer cells to evade the immune system. The most advanced candidate, ALX148, is being developed for the treatment of myelodysplastic syndromes (MDS) and acute myeloid leukemia (AML). The Company intends to further develop ALX148 both as a monotherapy and in combination with other treatments for non-Hodgkin's lymphoma and other solid tumor diseases.
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 % |
30.06.2020 | MTD | FYTD | CYTD | |
NAV | CHF 240.72 | 1.8% | 15.6% | 9.3% |
Share Price / Aktienkurs | CHF 247.00 | 0.8% | 30.0% | 11.0% |
Total Net Assets (in million) / Total Nettovermögen (in Mio.) | 1'675 |
Auf Grundlage des ausgewiesenen NAV erwartet HBM Healthcare Investments für das erste Quartal des Geschäftsjahrs 2020/2021 einen Gewinn von rund CHF 226 Millionen. In der gleichen Periode des Vorjahrs resultierte ein Gewinn von CHF 75.2 Millionen.
Based on the reported NAV, HBM Healthcare Investments expects a profit of around CHF 226 million for the first quarter of the financial year 2020/2021. This compares to a profit of CHF 75.2 million for the same period of the previous year.
MTD | Month to Date / Monat bis Datum |
FYTD | Financial Year to Date (since 1.4.2020) / Geschäftsjahr bis Datum |
CYTD | Calendar Year to Date (since 1.1.2020) / Kalenderjahr bis Datum |
At today's ordinary Shareholders' Meeting of HBM Healthcare Investments Ltd the shareholders approved all proposals submitted by the Board of Directors. Based on the Federal Council's COVID 19 Ordinance 2, the meeting was held without the personal participation of shareholders. The independent proxy holder represented 38.76% of the outstanding shares.
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. In addition, the shareholders confirmed the election of Ms Dr Stella X. Xu as additional member of the Board of Directors to the close of the 2021 Ordinary Shareholders' Meeting. The shareholders also approved the proposed compensation to the Board of Directors and to the Management.
Further, the Shareholders' Meeting voted for a partial payback of nominal value of CHF 7.70 per share. The cash payment will be made on 10 September 2020. Registered shares entitled to receive the cash distribution will be traded for the last time on 7 September 2020 (as of 8 September 2020 trading will occur without the cash distribution entitlement, ex-date).
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
Novo Nordisk (NYSE: NVO) today announced that it has entered into a definitive agreement to acquire Corvidia Therapeutics, a privately held company in the portfolio of HBM Healthcare Investments.
Under the terms of the agreement, Novo Nordisk will acquire all outstanding shares of Corvidia for an upfront payment of USD 725 million in cash. Total payments to Corvidia shareholders could ultimately amount to USD 2.1 billion in cash upon the achievement of certain regulatory and sales milestones by Novo Nordisk.
HBM Healthcare invested USD 4.8 million in Corvidia since April 2018 and owns 3.2 per cent of the company. The sum of the estimated upfront amount of USD 23 million plus the discounted value of the contingent milestones increases the net asset value per HBM-share (NAV) by CHF 2.80 (+1.2%).
Corvidia is a clinical stage company focused on the research, development and commercialization of transformative therapies for cardio-renal diseases. The company's lead candidate, ziltivekimab, is an anti-Interleukin 6 monoclonal antibody, being developed to reduce the risk of major adverse cardiovascular events in chronic kidney disease patients with atherosclerotic cardiovascular disease (ASCVD) and inflammation.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
Monday, 22 June 2020, 4:45 pm at the Company's registered office in Zug
Due to the Ordinance on Measures to Combat the Coronavirus (COVID-19) issued by the Swiss Federal Council it is not permitted to hold this year's Ordinary Shareholders Meeting in the usual form, i.e. with the shareholders participating in person. That is why the Board of Directors has resolved in accordance with Art. 6b of the said Ordinance, that the shareholders may exercise their rights exclusively through the independent proxy by way of written or electronic instruction and power of attorney.
The Board of Directors regrets these extraordinary restrictions and looks forward to your par-ticipation in person in the Ordinary Shareholders' Meeting 2021.
The invitation to the 19th Ordinary Shareholders' Meeting on 22 June 2020 has been sent to the shareholders of HBM Healthcare Investments today.
Due to the Ordinance on Measures to Combat the Coronavirus (COVID-19) issued by the Swiss Federal Council it is not permitted to hold this year's Ordinary Shareholders Meeting in the usual form, i.e. with the shareholders participating in person. The Board of Directors has thus resolved in accordance with Art. 6b of the said Ordinance, that the shareholders may exercise their rights exclusively through the independent proxy by way of written or electronic instruction and power of attorney.
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 19th Ordinary Shareholders' Meeting on 22 June 2020
1. Statutory financial statements and group financial statements 2019/2020; 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 236'338'922
4. Elections regarding the Board of Directors
- Re-election of the Chairman and of the Members of the Board of Directors
- Election of Dr. Stella X. Xu as a member 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 7.70 per share through nominal value repayment
9. Miscellaneous
HBM Healthcare Investments also published today its Annual Report 2019/2020 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.
The Board of Directors of HBM Healthcare Investments AG proposes Dr Stella X. Xu for the election to the Board of Directors. Dr Xu is a proven expert in investing in innovative healthcare companies, with in-depth knowledge of the pharmaceutical sector in the key US and Chinese markets.
Since 2017, Dr Xu has been Managing Director of Quan Capital, a venture fund specialising in life sciences with offices in China and the USA. Prior to that, she worked for Roche for 15 years in various roles in the USA and China. Her last role there, as a core member of the global management team for research and early development in Immunology, Inflammation and Infectious Diseases, involved heading up Roche's Innovation Centre in Shanghai with around 200 scientists. Before joining Roche, Dr Xu spent four years at McKinsey & Company in the USA, where she was responsible for strategic projects in the healthcare sector.
Stella Xu received her PhD in Immunology from Northwestern University in Illinois, USA, and completed her undergraduate studies in Biophysics and Physiology at Peking University in Beijing. She is currently a board member of NextCure and a few private biotech companies.
All current board members are standing for re-election at the Annual General Meeting.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
In the financial year 2019/2020, HBM Healthcare Investments achieved consistently high value creation, with profit of CHF 183 million and a 14 percent increase in net asset value. The share price rose more strongly than this, climbing 17 percent.
Thanks to a well-balanced portfolio and strategic market hedging, the company survived the market turmoil after the onset of the COVID-19 pandemic almost unscathed. With a solid balance sheet, a highly selective portfolio and an experienced team, the company is also well positioned for the future.
The Board of Directors and the Investment Advisor are keeping a constant eye on the changed circumstances. From today's perspective, however, there is no fundamental need to rethink the business model or investment strategy. As a company that invests in innovations in the healthcare sector, HBM Healthcare is ideally positioned. According to current estimates, the majority of the portfolio companies are only selectively affected by the effects of the pandemic and in some cases may even benefit from it.
Private companies turned out to be the most important earning drivers in the year under review. To complement the portfolio, CHF 65 million was invested in six new private companies, and a further CHF 58 million in existing positions.
Various companies expect important study results and market approvals in the current financial year. Acquisitions and IPOs are likely to continue to play an important role in the healthcare sector and bring added value.
Profit of CHF 183 million despite negative market and currency trends
HBM Healthcare Investments achieved a profit of CHF 183 million and a 14 percent increase in net asset value (NAV) per share in the 2019/2020 financial year. This came despite negative market and currency trends. The investment currencies depreciated against the Swiss franc by between 3 and 12 percent, reducing performance by around 5 percent, while all relevant sector indices fell (MSCI World Health Care Index – 1.6 percent, Nasdaq Biotechnology Index – 5.8 percent, S&P Biotech ETF – 17.0 percent).
This strong result was mainly down to the increase in value in the portfolio of private companies and contributions from market and currency hedging transactions.
The portfolio of private companies and funds generated a net increase in value of CHF 203 million. The key contributors were the five IPOs in the year under review, namely: Viela Bio (profit contribution of CHF 35 million), Turning Point Therapeutics (CHF 34 million), Arcutis (CHF 26 million), SpringWorks Therapeutics (CHF 22 million) and Galera Therapeutics (CHF – 1 million). Other significant changes in value resulted from revaluations due to financing rounds with third parties at Cathay Biotech (CHF 64 million net, taking into account the CHF 17 million provision for deferred capital gains taxes), Harmony Biosciences (CHF 24 million) and ConnectRN (CHF – 6 million), and due to operational developments at Swixx Biopharma (CHF 15 million) and Vascular Dynamics (CHF – 8 million).
The portfolio of public companies and other assets contributed a net CHF 32 million to profit. Net losses in value of CHF 7 million for public companies and CHF 9 million for other assets were more than offset by gains of CHF 48 million from market and currency hedging transactions.
The management fees of CHF 21 million reflect the increase in net assets and the company's higher market capitalisation. Based on the increase in value achieved during the financial year, performance-related fees of CHF 24.7 million for the investment advisor and CHF 1.6 million for the Board of Directors also apply. Other administrative costs and financial expenses are unchanged versus previous years at around CHF 3 million and CHF 2 million respectively.
CHF 65 million for six new investments in private companies
In the year under review, HBM Healthcare Investments invested a total of CHF 65 million in six new private companies. CHF 55 million of this total has already been paid in; CHF 10 million is booked as an investment commitment. In addition, CHF 58 million was invested in existing private companies as follow-up investments.
HBM Healthcare made two new investments in the first calendar quarter of 2020.
- USD 15 million (USD 5 million paid up) is going to the diagnostics company Karius, based in Redwood City, California. Karius is marketing a blood test based on novel sequencing of cell-free DNA that can identify and quantify over 1,000 clinically relevant pathogens including bacteria, DNA viruses, fungi and parasites. Applications include complicated pneumonia, infections in immunocompromised patients and endocarditis.
- ALX Oncology in Burlingame, California received USD 5 million. This company is developing therapies that block the CD47 checkpoint mechanism, which is exploited by cancer cells to evade the immune system.
The other four new investments made during the year were in Viela Bio (USD 20 million, antibodies for the treatment of neuromyelitis optica spectrum disorder), Arcutis (USD 15 million, active ingredient for the treatment of psoriasis), Arrakis Therapeutics (USD 7 million, research platform for the discovery of small molecule RNA-binding drugs) and MicroOptx (USD 3 million, development of an implant for the treatment of patients with elevated intraocular pressure).
Cash distribution increased by CHF 0.20 to CHF 7.70 per share
The good business results, the solid balance sheet and the continued positive assessment of the portfolio enable the existing dividend policy to be continued. The Board of Directors is proposing a cash distribution of CHF 7.70 per share to the Annual General Meeting, an increase of CHF 0.20. The distribution will again take the form of a par value repayment that is exempt from withholding tax. Based on the share price at the end of the financial year, the distribution yield is 4.1 percent, which is in the middle of the defined range of 3 to 5 percent.
Outlook
HBM Healthcare Investments has a very solid balance sheet with low debt and a sizeable cash holding. The company is thus well positioned for the current market environment, which is fraught with uncertainties. Thanks to the experience gained in previous difficult periods for the markets, HBM Healthcare has the knowledge to navigate the pandemic situation and is exercising appropriate caution. For example, it is paying particular attention to guiding and supporting the private portfolio companies. At the same time, HBM Healthcare is looking to seize opportunities as well as surmounting all the challenges that arise.
The three portfolio categories – private companies, funds and public companies – remain well balanced. The partial market hedging of public companies was fully unwound in mid-March. Trends on the financial markets are closely monitored and continuously reassessed with a view to restoring partial hedging.
The currency profile is also very balanced, thanks to a currency hedge of USD 600 million against Swiss francs created through forward sales in March.
HBM Healthcare remains confident about the operational performance of its portfolio companies. Various companies expect important study results and market approvals in the current financial year. Acquisitions and IPOs are likely to continue to play an important role in the healthcare sector and bring added value.
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 26 May 2020 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.
HBM Healthcare Investments and HBM Partners are making a small but important contribution to the management of the COVID-19 pandemic in Switzerland. Through contacts with the leading Chinese online pharmacy Jianke Pharmaceutical (www.jianke.com), the two companies were able to procure protective suits and medical face masks for emergency hospitals in Switzerland. HBM Healthcare Investments has held a stake in Jianke since 2018. The material was transported from China to Switzerland with the support of the Swiss Government and the Swiss Army.
HBM Healthcare Investments and HBM Partners donate the equipment to the Swiss Government.
Arrakis Therapeutics, a privately held company in the portfolio of HBM Healthcare Investments, today announced a strategic collaboration and license agreement with Roche (SIX: RO, ROG; OTCQX: RHHBY) for the discovery of RNA-targeted small molecule (rSM) drugs against a broad set of targets across all of Roche's research and development areas.
Under the terms of the agreement, Arrakis will lead discovery and research activities for each target to a defined point, at which time Roche will have the right to exclusively pursue further preclinical and clinical development. Arrakis will receive an upfront payment of USD 190 million in cash and may also receive preclinical, clinical, commercial and sales milestone payments and royalties for any resulting products. The aggregate potential value of future payments to Arrakis exceeds several billion dollars, subject to regulatory approvals and other conditions being met.
HBM Healthcare Investments invested USD 7 million in Arrakis in 2019 and owns 4.8 percent of the company. The collaboration with Roche validates the company's discovery platform and secures its financing for the years to come. In accordance with our valuation principles, however, this transaction has no immediate impact on the valuation of our investment.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
HBM Healthcare Investments closes the 2019/2020 financial year with an excellent result despite the severe market turbulence in recent weeks. The net asset value per share (NAV) increased by 13.9 percent to CHF 208.25. The share price rose by 17 percent to CHF 190.00. Based on these key figures, HBM Healthcare Investments expects an annual net profit of more than CHF 180 million for the financial year (previous year: annual net profit of CHF 209 million).
These results are preliminary and unaudited based on the current status of the financial closing process. The final annual results will be published on Friday 8 May 2020.
Market hedging closed with profit; strong balance sheet with cash and cash equivalents of CHF 224 million; currency risk partially hedged
Thanks to gains from the market hedging position, which was continuously increased during the fourth quarter of 2019 and at the beginning of 2020, HBM Healthcare Investments has been able to limit the loss in value on the portfolio of listed companies in recent weeks. In addition, gains from existing investments were realized at an early stage. The market hedge was closed in mid-March with a profit contribution of more than CHF 40 million for the reporting year.
With cash and cash equivalents of CHF 224 million and a low gearing, HBM Healthcare Investments has a very solid balance sheet. The company is therefore well positioned for the market environment, which is currently fraught with many uncertainties. The net assets of CHF 1.45 billion at the end of March 2020 break down as follows: Private companies 37%, funds 11%, listed companies 43%, cash and other assets (after deduction of current liabilities) 16%; financial liabilities -7%.
Due to increased volatility in the financial markets and significantly lower hedging costs, HBM Healthcare Investments hedged USD 600 million of its US dollar exposure by selling forward over 6 and 12 months towards the end of March. As a result of this measure, the currency profile of the portfolio as of 31 March 2020, in relation to net assets is now significantly more balanced as follows: CHF 40%, USD 29%, CNY 14%, EUR 10% other currencies 7%.
Contact
For further information, please contact Dr Andreas Wicki on +41 41 710 75 77, or at andreas.wicki@hbmhealthcare.com.
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