News
2020
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