Bellevue Biotech (CH)

Global equities were positive in September on a CHF basis, with MSCI World Index up 2.1% (in CHF) on a net return basis. The S&P500 returned 2.86% (in CHF) in September, while the NASDAQ Composite returned 5.25% (in CHF).

Healthcare underperformed over the month, with the MSCI World Health Care Index up 1.48% (in CHF) on a net return basis. The biotechnology segment (NBI; -0.15% in USD, +3.18% in CHF) outperformed broader healthcare in September.

The Bellevue Biotech (CH) Fund (ADGLBII shares) returned 0.6% (in CHF) underperforming its benchmark by 260bp.

September was a tougher month for the sector after a strong summer. The Fed raised rates by 25 bp to 3.75-4.00% on 16 September.

The biggest clinical setback came on 4 September, when Novartis and Ionis reported that pelacarsen failed to reduce cardiovascular events in the Phase 3 Lp(a)HORIZON outcomes trial despite lowering Lp(a). The first dedicated Lp(a) outcomes failure casts doubt over the class, including Amgen's olpasiran and Lilly's lepodisiran. Novo Nordisk was the weakest large cap, down about 14%, after a capital markets day on 21 September that lacked a concrete turnaround plan.

Chinese pharma and CDMO names rallied after Beijing's 15th Five-Year Plan set ambitious targets for domestic drug innovation. Managed care sold off after CVS flagged persistently high medical costs.

On policy, the administration added nine companies to its most-favored-nation Medicaid pricing deals, bringing the total to 26, and on 30 September finalized the GLOBE model applying international reference pricing to Medicare Part B drugs from 1 January, with companies holding earlier White House deals expected to be exempt.

Top absolute performers in the fund included Illumina (+28.1%; ; positive analyst coverage and genomics sentiment, S&P 500 index inclusion), Summit Therapeutics (+24.2%; AstraZeneca USD 2bn equity investment and HARMONi-2 overall survival win versus Keytruda), and Veradermics (+23.2%; biotech sector rotation).

Top relative positive contributors included Illumina (overweight; +36 bp; positive analyst coverage and genomics sentiment, S&P 500 index inclusion), Regeneron (not invested; +27 bp; competitive pressure on Eylea after Kodiak's positive Phase 3 DAYBREAK wAMD data), and Arrowhead Pharmaceuticals (not invested; +16 bp; ARO-DIMER-PA Phase 1/2a data). Top relative negative contributors included Moderna (not invested; -137 bp; continued momentum after the August Phase 3 melanoma vaccine win), Alkermes (overweight; -49 bp; selloff ahead of ALKS 7290 Phase 1b ADHD data), and Alumis (overweight; -36 bp; Phase 2b LUMUS trial of envudeucitinib in SLE missed primary endpoint).

Biotechnology may be entering a more durable phase of growth after years of structural, regulatory, and capital-market headwinds. The sector is transitioning from a speculative, capital-intensive model toward sustainable, cash-generative growth, driven by premium pricing, leaner cost structures, and disciplined capital allocation. Fundamentals are stabilizing, and investor confidence is returning as the industry increasingly achieves sustainable profitability.

Long-term structural drivers remain compelling. Aging populations, expanding healthcare access in emerging markets, and accelerating innovation in AI-enabled drug discovery, precision medicine, and advanced biologics continue to broaden the opportunity set.

The fund maintains a selective, high-conviction strategy oriented toward late-stage, de-risked assets, proven pricing power, and scalable platforms capable of generating sustainable free cash flow.