BB Adamant Biotech (Lux)
Biotech sector with sustainable, strong sales and earnings growth thanks to high innovation level
Expiring patents of pharma companies lead to high M&A activity (patent cliff)
Valuations very attractive on historical average over the last 10 years
Please find a more detailed description of share classes here.
The Fund invests worldwide in companies active in the biotechnology sector. Experienced sector specialists focus on profitable mid- and large-cap companies with an established product portfolio. Stock selection is based on fundamental analysis. The selection of portfolio companies is entirely bottom-up, independent of benchmark weightings.
Indexed performance (as at: 26.10.2021)
NAV: GBP 533.90 (25.10.2021)
Rolling performance (25.10.2021)
|25.10.2020 - 25.10.2021||10.86%||10.33%|
|25.10.2019 - 25.10.2020||26.22%||27.64%|
|25.10.2018 - 25.10.2019||4.74%||1.32%|
|25.10.2017 - 25.10.2018||-5.41%||0.40%|
Annualized performance (25.10.2021)
|Since Inception p.a.||16.37%||17.09%|
Cumulative performance (25.10.2021)
Facts & Key figures
The Fund invests worldwide in companies active in the biotechnology sector. Experienced sector specialists focus on profitable mid- and large-cap companies with an established product portfolio. Stock selection is based on fundamental analysis, in particular of the medical indications addressed, the means of efficacy and the market potential. A global network of experts spanning scientific and industrial fields supports the Management Team in forming opinions and making investment decisions. The selection of portfolio companies is entirely bottom-up, independent of benchmark weightings.Show moreShow less
Investment suitability & Risk
|Investment Manager||Bellevue Asset Management AG|
|Custodian||RBC Investor Services, Luxembourg|
|Fund Administrator||RBC Investor Services, Luxembourg|
|Year end closing||30. Jun|
|NAV Calculation||Daily "Forward Pricing"|
|Cut of time||15:00 CET|
|Subscription Fee (max.)||5.00%|
|Total expense ratio (TER)||2.22% (30.09.2021)|
|Legal form||SICAV Luxembourg jurisdiction|
|SFDR category||Article 8|
Key data (30.09.2021, base currency USD)
|No. of positions||57|
Top 10 positions
Breakdown by sector
Opportunities & Risks
- New innovative drugs are powering sustainable momentum in the biotech sector.
- Attractively valued large-cap biotechs.
- Expiring pharmaceutical patents trigger a rise in M&A activity.
- Focus on US biotech companies with strong growth potential.
- Bellevue has been a Healthcare pioneer since 1993 and is one of the biggest independent investors in the sector in Europe today.
- Equities are subject to strong price fluctuations and so are also exposed to the risk of price losses.
- Market, industry or company factors can lead to strong short-term price fluctuations
- The fund invests in foreign currencies, which means a corresponding degree of currency risk against the reference currency.
- Investing in emerging markets entails the additional risk of political and social instability.
- The fund may invest in financial instruments that might have a rather low level of liquidity, which can in turn affect the fund’s liquidity.
Review / Outlook
Stock markets were weak in September. The S&P 500 retreated 4.8%, the Nasdaq Biotech Index -4.9% and the BB Adamant Biotech (Lux) Fund -5.8% (USD / B shares).
The ramp-up of economic activity in many industrialized countries marked a new phase of the economic recovery. Although the rising number of Delta cases continues to have negative repercussions, the new restrictions being imposed on unvaccinated people are pushing vaccination rates higher. In addition, the Center for Disease Control (CDC) recommended vaccine booster shots for a large section of the US population, which is broader than the recommendation issued by an FDA advisory panel. In COVID-19 vaccine news, Pfizer/BioNtech has filed for FDA approval of its vaccine for 5-11 year-olds. Regeneron/Roche’s antibody cocktail demonstrated good efficacy against all virus variants, prompting the companies to submit the data for emergency use authorization (EUA) as a treatment for non-hospitalized COVID-19 patients. Supply chain bottlenecks in the aftermath of the pandemic are pushing up costs, but central bankers believe this pressure will not last. Budget talks in Washington coupled with wrangling over an infrastructure deal and social spending package once again put a political spotlight on drug prices as a way of raising money for the spending bills. It is expected that the federal health insurance programs will be authorized to negotiate drug prices on their own. At the European oncology conference (ESMO), presentations on antibody drug conjugates (ADC) were particularly impressive. The M&A carousel kept going round and round too. Sanofi took over Kadamon for USD 1.3 bn, a premium of 83%, and Merck bid USD 10.4 bn for Accelleron, offering a premium of 24%.
The following stocks made the best contribution to the portfolio's performance in September: Arcus Biosciences rose on data that a competitor presented at ESMO that was based on the same mechanisms of action (CD73 antibodies, adenosine); Innovent gained thanks to the pipeline data it presented at ESMO (anti-PD1 antibodies) and its multiple kinase inhibitor taletrectinib; Harmony was marked up after pitolisant was included in the updated AASM guidelines as a treatment for insomnia (narcolepsy); and IntraCellular Therapeutics published new data from its trial of Lumateperone in bipolar depression.
Performance detractors in September were Apellis, after a Phase III trial of pegcetacoplan for geographic atrophy and dry macular degeneration did not meet all the primary endpoints; Mersana corrected after releasing updated interim data from a Phase I trial of upifitamab rilsodotin in ovarian cancer that indicated reduced efficacy; and ZaiLabs sold off despite reporting good progress in its pipeline.
Our stance towards the biotech sector remains positive in view of its strong fundamentals and very attractive valuations (average 2022 P/E of 13x and PEG of 1.1 for large caps). These are still very attractive multiples compared to the biotech sector's historical valuations and the current ratios for the pharma sector (P/E 15x, PEG 2.3) and the S&P Index (P/E 20x, PEG 2.0).
The companies in our portfolio are working on technologies or products for novel treatment solutions. We are also invested in selected specialty pharma companies that offer high growth rates and moderate valuations. The Bellevue Biotech (Lux) Fund is well-positioned to profit from the milestones that are expected to be reached in 2021 and 2022. The regulatory environment favors the innovation coming out of biotech labs and the coronavirus crisis has improved the image of drug developers. Large pharma companies have acquired a number of companies in the fund's portfolio – Loxo, Array, Medicines Company, Myokardia and Alexion – and we expect more M&A deals to be announced during the coming months.
Past performance is not a reliable indicator of future results and can be misleading. As the sub-fund is denominated in a currency that may differ than an investor’s base currency, changes in the rate of exchange may have an adverse effect on prices and incomes. Performance is shown net of fees and expenses for the relevant share class over the reference period. All performance figures reflect the reinvestment of dividends and do not take into account the commissions and costs incurred on the issue and redemption of shares, if any. Individual costs are not taken into account and would have a negative impact on the performance. With an investment amount of EUR 1,000 over an investment period of five years, the investment result in the first year would be reduced by the front-end load of up to EUR 50 (5%) as well as by additional individual custody charges. In subsequent years, the investment result would also be reduced by the individual custody account costs incurred. The reference benchmark of this class is used for performance comparison purposes only (dividend reinvested). No benchmark is directly identical to a sub-fund, thus the performance of a benchmark is not a reliable indicator of future performance of the sub-fund it is compared to. There can be no assurance that a return will be achieved or that a substantial loss of capital will not be incurred. All figures in base currency in %, calculated by the total return / BVI method.Show moreShow less