Bellevue Asia Pacific Healthcare

After a bout of extreme volatility in early April that sent the VIX soaring above 50 amid very heavy selling, especially on Wall Street, markets regained their footing as the month went on and clawed back most of their losses. The 90-day suspension of reciprocal tariffs stopped the market decline. The Trump administration’s abrupt policy U-turns are making accurate projections very difficult and diverting attention away from fundamental corporate developments. Assessing the potential impact of trade tariffs on companies around the world is currently imperative. The healthcare sector in the APAC region is more diversified in terms of production and sales than many other sectors and Chinese healthcare firms in particular generate a considerable percentage of their sales in their home market. This largely explains the pleasing performance of healthcare stocks in the Asia-Pacific region during the month under review, which closed the month about 4.5% higher in USD.

Initial overall survival (OS) data was released for ivonescimab, Akeso/Summit’s bispecific antibody. Overall survival benefit is a crucial endpoint in cancer clinical trials. A so-called hazard ratio (HR) of <0.8 is considered to be statistically significant and corresponds to a 20% reduction in the mortality rate. The HR for ivonescimab in comparison with the current standard of care (Merck's Keytruda) was 0.777. This study was conducted exclusively in China. Data from an international study being conducted by Summit Therapeutics is expected to be released during the next few months. Whether patient response in the West is similar to the response seen in the Chinese study is therefore the key question. Due to the very high expectations riding on ivonescimab and the previously strong share price gains, some investors cashed out after the data was announced. We continue to hold both stocks in the fund's portfolio.

Eli Lilly released highly anticipated data from a Phase III trial of orforglipron in type 2 diabetes. Orforglipron, an oral GLP-1 agonist, was discovered by Chugai and licensed to Eli Lilly. The improvement in HbA1c (primary endpoint) was 1.4%, which is comparable to Ozempic, Novo Nordisk's injectable medication. More importantly, the group receiving the highest dose of 36 mg achieved a placeboâ€?corrected percentage reduction in weight of 6.3% compared to the baseline, which is likewise comparable to Ozempic. Orforglipron also showed a good safety profile. There are now reasonable grounds for hope that oral orforglipron will be as effective for weight loss and have a similar side effect profile as Novo Nordisk’s blockbuster drug Wegovy in a separate trial as a treatment for obesity. Data from this trial will be published in the second half of 2025. As a daily pill, orforglipron could revolutionize the obesity market: Broad access, lower costs, no supply bottlenecks. Chugai is entitled to receive sales royalties of 10%-12%.

Existing positions in Samsung Biologics, Hansoh, CSPC and Jiangsu Hengrui were increased last month. Positions in Summit, Hoya, Terumo and Wuxi Biologics were reduced.

Asia is the most dynamic growth region in the world and it accounts for more than half of the world's population. Asian emerging markets are forecast to account for more than 50% of global GDP by 2050. As household incomes rise, the economic growth model of Asian countries will shift from manufacturing to the services sector. A growing middle class fuels demand for modern medicine. Healthcare ranks increasingly high on their wish list. Billions are being invested in infrastructure, technology and research to modernize the healthcare systems in emerging market countries. This is giving a greater swath of the population access to better healthcare. Meanwhile rapid population aging is also stoking demand for healthcare. In 30 years’ time there will be 400 to 500 million people over 60 in China alone, and they will have a growing need for modern health services and medicines.

Japan, which has been referred to as “the world's demographic laboratory”, has championed cutting-edge innovation for decades.  The Land of the Rising Sun boasts technology leadership in numerous fields, ranging from therapeutic antibody technology, immunotherapy and robotics to digitalization, diagnostics and medical imaging systems.

The fund offers defensive access to Asian emerging markets as well as exciting investment opportunities in technology leaders throughout the entire region. It invests in the entire healthcare system value chain, from generic drug producers and biotechnology companies to medical device manufacturers and digital health specialists.