Bellevue Asia Pacific Healthcare

Asian stock markets posted strong gains in June, with the Nikkei 225 rising 6.5%, the Hang Seng up 4.0%, and the CSI 300 advancing 3.8%. Australia’s benchmark index, the ASX 200, also performed well with a 3.8% increase. As a result, the broader Asia-Pacific equity markets (MXAP Index) ended the month on a positive note, gaining 4.1%.

The Asia-Pacific healthcare market (+0.7%) underperformed the broader equity market. Negative rhetoric from the US government concerning its Most Favoured Nation (MFN) pricing model and impending tariffs on biopharma products weighed on pharmaceutical and biotech stocks, while medtech names provided little support. The Bellevue Asia Pacific Healthcare Fund (+2.1%) outperformed its benchmark.

Innovent (+26.4%), Legend (+22.6%), Sino Biopharm (+19.0%), Hansoh (+15.0%), and Akeso (+9.6%) were among the top contributors to the fund’s absolute performance. Innovent attracted a new wave of interest as the company presented encouraging data from its clinical asset – IBI363, a PD1/IL2alpha bispecific for solid cancers including lung cancer, colorectal cancer and melanoma. Strong efficacy and a manageable safety profile added to investor confidence for IBI363’s path to success. Legend regained momentum because new data suggests Carvykti’s differentiation and competitive advantage in multiple myeloma. FDA’s signal of openness to cell and gene therapy also helped. Sino Biopharm jumped on the rumour that its first landmark out-licensing deal was finalising. Although no further details released, we think there are 2-3 solid assets in its pipeline that hold high out-licensing potential. Hansoh has a solid innovative pipeline and rose on its potential for out-licensing. In addition, Hansoh’s aumolertinib, a third-generation EGFR (epidermal growth factor receptor) targeting drug for non-small cell lung cancer (NSCLC) got approval by the UK, adding to its sales potential. Akeso’s innovative pipeline, catalysts in second half of 2025 and sales from existing drugs support a positive outlook and further upside.

Daiichi (-12.6%), Olympus (-7.8%), Hengrui (-4.7%), Otsuka (-2.1%), and CSL (-0.8%) were the largest detractors from the fund’s absolute performance. Investors of Daiichi and Otsuka took profits after a good run last month, leading to some pullback in their stock prices. Olympus received FDA import alerts preventing future US imports of certain endoscope devices. This is a negative event for both profitability and sentiment as the company is trying to make changes on product quality. Hengrui also corrected as investor interest in China healthcare started to spill into smaller and less known biotech stocks. CSL continued to be punished by potential pricing cut due to MFN and US policies around vaccines. Although it is positive that influenza vaccine got a nod by US ACIP (Advisory Committee on Immunization Practices), they need to be thimerosal-free. CSL has 5 flu vaccines and 2 of these contain thimerosal.

All performance figures in USD, with fund performance based on the B share (USD). 

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.